Police: Embezzlement from disabled went on for years

RANDI ROSSMANN
THE PRESS DEMOCRAT

For at least seven years, embezzlement suspect Larry Gene Sark forged signatures onto the backs of thousands of checks made out to developmentally disabled clients of the North Bay Regional Center. He then deposited them into his personal bank account, according to a Santa Rosa police investigation.

Months of poring through the man's credit card history and his JP Morgan Chase bank account showed a long-standing pattern of embezzlement totaling almost $400,000, Santa Rosa detective Sgt. Phil Brazis said.

The money was taken from 51 Sonoma County residents.

The amount of loss varied. For some it was a few hundred dollars and went up from there to more than $20,000 taken from each of at least two North Bay clients, said Brazis.

The money - taken mainly from clients' Social Security checks - appears to be gone.

Sark's credit card records show expensive purchases and trips, including a 2007 honeymoon to Egypt, according to the investigation.

"We're of the mindset he has spent it all," Brazis said. "He just used it as he embezzled it."

The case is one of the largest in a recent string of Sonoma County embezzlement arrests and prosecutions involving officials with the Healdsburg youth soccer league, a Santa Rosa Junior College police officer, a G&G Supermarkets clerk and a former bookkeeper for the Salvation Army in Santa Rosa.

Sark, 66, retired in December 2012 after at least 20 years working for the nonprofit North Bay Regional Center.

The Napa-based agency helps about 8,100 residents of Sonoma, Solano and Napa counties with money management, life assistance and other services aimed at keeping them living as independently as possible. The agency is funded by state and federal money.

More than half of the agency's clients have mental developmental disabilities and many others have autism, epilepsy and cerebral palsy, according to agency reports.

The agency's annual budget is about $140 million, with operating expenses of about $17 million and the remaining $123 million going to client services.

One of the main services offered is financial management.

Sark worked as a client program coordinator with a role of helping people with their money.

"He was a caretaker for these folks and administered the funds to them. He was their advocate, the person who makes sure their day-to-day activities, paying bills, were taken care of," Brazis said. "His clients were basically going without those funds."

News of the arrest and allegations rocked branches of the service community that aids people with disabilities.

"It's horrible," said Adam Brown, an attorney and longtime executive director of the local nonprofit Disability Center & Legal Services agency.

"I can think of few worse crimes because the people who are being stolen from really have no means to stand up for themselves," Brown said. "We're talking about a class of individuals, that unfortunately even if they were to suspect something was wrong ... few people would believe them."

It was unclear how many of the alleged victims had been notified, either by North Bay or authorities.

Typically, a person with disabilities receives monthly income, primarily Social Security payments, Brown said.

But because of the clients' disabilities, the money needs to go to a third party to handle for the client and that's where nonprofit agencies such as North Bay step in, Brown said.

Brazis said it appeared North Bay had policies and procedures in place to thwart such activity, but the procedures apparently weren't followed, he said.

"What it appears happened is checks and balances were not looked at," Brazis said. "Knowing the system and finding a flaw in the system, he (Sark) was able to exploit it."

Brazis said he believed North Bay since has taken steps to change some procedures.

North Bay Regional Center Acting Director Thomas Maseda declined to answer questions regarding what happened, how the agency is dealing with the allegations and whether officials had made any subsequent policy changes.

Maseda said the current investigation precluded him from talking about the case.

Instead, he issued a brief statement. "We were very pleased with the Santa Rosa Police Department and District Attorney in their diligence in pursuing justice for (North Bay) clients."

Sark, arrested Monday, remained in the Sonoma County Jail on Saturday in lieu of $500,000 bail.

On Wednesday, the Sonoma County District Attorney's Office charged him with stealing money from 35 people.

More charges could be added, as police suspect there were at least 51 victims, with ages ranging from 20 to 70.

Sark's attorney, Izaak Schwaiger of Santa Rosa, said he couldn't comment on the case until he'd made a thorough review of the allegations.

"The discovery in the case is voluminous," Schwaiger said Thursday, referring to the police investigation. Sark is due in court in two weeks to enter a plea, and the defense attorney said he'll take the time to get through the huge file.

Detectives offered a 4-inch-thick binder outlining details of the deposited checks and credit card statements.

"We followed the money," Brazis said.

The investigation documented losses totaling about $385,000.

Initially, detectives looked at paperwork going back to 2006 - covering the period through which records were available.

Detectives found evidence of checks being deposited at a steady pace, Brazis said. It's likely the suspect started prior to that and that more money could have been taken, he said.

According to the investigation, the stolen checks had been issued to clients by the North Bay Regional Center. Sark picked some of them up, forged the client's name, countersigned his name on the back and deposited them into his Chase bank account.

Detectives said with the magnitude of checks involved, the suspect could have been depositing at least a dozen checks a week made out to other people.

"Somewhere along the line, we would hope red flags would be sent up, perhaps some regulations in the banking industry that would obligate them to contact authorities. I don't know whether that exists," Brazis said.

JP Morgan Chase spokeswoman Suzanne Ryan said Friday she couldn't comment on the case, citing the criminal investigation.

Chase policy allows a person to deposit a check written to someone else if the check is endorsed on the back and then countersigned by the person making the deposit.

The investigation into Sark started with an allegation of an inappropriate relationship with a client. While police found no criminal activity involved in the relationship, it prompted further scrutiny of the employee by North Bay. Officials reported to police they'd found client checks that appeared to have been cashed by Sark.

In September, detectives began looking into possible financial improprieties.

The investigation included looking at whether Sark's wife, Valerie, was involved in the embezzlement. Brazis said detectives have found no evidence she was aware of her husband's actions.

Sark was arrested at the couple's Neotomas Avenue home in Bennett Valley.

A woman who answered the door this week at the two-story residence declined to comment and would only say that Sark's wife wasn't home.

You can reach Staff Writer Randi Rossmann at 521-5412 or randi.rossmann@pressdemocrat.com.

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