COUNTY DEFRAUDED OF $3 MILLION PROBE CENTERS ON PROGRAM FOR IMMIGRANTS.

Byline: Troy Anderson Staff Writer

A widening investigation into private agencies in the San Fernando Valley and Los Angeles that are paid to issue assistance checks to immigrant refugees joining the work force has uncovered more than $3 million in fraud, Los Angeles County officials said Tuesday.

The Board of Supervisors ordered Los Angeles County Counsel Lloyd Pellman to seek recovery of the misappropriated funds through the contractors' liability insurance coverage or through litigation.

The supervisors also adopted a policy that allows only authorized county employees to issue county checks and directed the welfare and senior services departments to monitor their accounting system for irregularities in disbursements.

Supervisor Gloria Molina raised questions as to whether officials in the Department of Community and Senior Services knew about the fraud and ignored it.

``I'm still trying to figure out how I'm going to hang the crooks inside the department,'' Molina said. ``Right now, this is about crooks outside the department.

``What I've seen is that more than $800,000 was stolen by one agency, $2.4 million was stolen by another agency and $38,000 was stolen by another agency. I understand that we have gotten the $2.4 million back, but I want to know how we are going to get the $800,000 back.''

Molina said she believes that county employees were not adequately monitoring the private contractors' use of taxpayer dollars.

Department Director Robert Ryans said contract monitors are supposed to be overseeing the private agencies, and that his agency was unaware of the fraud until the District Attorney's Office began an investigation.

``I see it as a countywide problem,'' Ryans said, adding that the computer system private contractors used to issue the checks is a countywide system. ``We are just the end user.''

Officials said several of the 11 private agencies involved in administering the Refugee Immigrant Training and Employment program are suspected of defrauding the county of more than $3 million.

A recent investigation by the Auditor-Controller's Office revealed that county funds were embezzled by a contractor with the authority to issue county checks.

Last July, two former employees of the International Community Employment Training Center, which has offices in Glendale and Los Angeles, were arrested on charges of misappropriating public funds. They were accused of using county computers to issue an estimated $500,000 in transportation reimbursement checks to dozens of people.

A North Hollywood man, who worked for a check-cashing business, was arrested on identical charges.

The RITE program has an annual budget of about $8 million and helps immigrants who speak neither English nor Spanish find jobs.

The Auditor-Controller's Office recently assumed the responsibility of monitoring RITE providers and developed new procedures to verify that services and training for refugees were actually provided.

``Agencies that misappropriated taxpayer funds should not be eligible to receive further taxpayer funding and appropriate consequences should result from any illegal or inappropriate activity,'' Molina said.

Liliana Chavez-Alcasio, a former community and senior services department employee who blew the whistle on the waste of taxpayer dollars, recommended the supervisors order an investigation of the entire department.

``I think the problem is just beginning to be revealed and we are now seeing how big this problem is,'' she said. ``My recommendation is that the entire department be investigated and the auditor come up with a task force to work together to solve these problems.''

Troy Anderson, [phone]

troy.anderson(at)dailynews.com