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Satterberg said Phan was able to open up a Bank of America account under his own name and "The City of Sea." More than 70 checks made payable to the City of Seattle or to Seattle Public Utilities were deposited into the account totaling $1,090,762.16. (AP Photo/File)

Man steals $1M from Seattle, Bank of America sits idly by

BY Brandi Kruse  on March 6, 2012 @ 1:49 pm (Updated: 9:44 pm - 3/6/12 )

Prosecutors have charged a former city employee with 70 counts of theft in what they have called the "largest embezzlement of public funds in modern King County history."

Joseph Phan, 44, faces 67 counts of first degree theft and three counts of theft in the second degree. He is accused of stealing $1.1 million from Seattle Public Utilities between 2008 and 2010. Prosecutors allege he diverted customer checks for water main extension projects into a personal bank account.

"This defendant both presented the bill to customers and collected the payment. That's a recipe for embezzlement," said King County Prosecutor Dan Satterberg. "It was a lot easier than one would expect to steal a million dollars from the city."

Satterberg said Phan was able to open up a Bank of America account under his own name and "The City of Sea." More than 70 checks made payable to the City of Seattle or to Seattle Public Utilities were deposited into the account totaling $1,090,762.16.

"It is surprising that Bank of America would open up an account for him and accept checks made out to the City of Seattle when they are not the bank the city does business with," Satterberg told KIRO-FM. He indicated that the city may have grounds for civil action against the bank.

City Attorney Peter Holmes released a statement Tuesday saying his office plans to "pursue, swiftly and aggressively, all available legal remedies to recover stolen public assets."

To date, investigators have seized $220,000 from a BofA account in Phan's name, and are looking into the possibility that he transferred stolen money to additional accounts.

"We are working closely with police and prosecutors to make sure that Mr. Phan retains none of his ill-gotten gains," Holmes said.

Holmes' office would not speak to the legal remedies with which they plan to recover those assets, and would not confirm if they plan to seek a lawsuit against BofA.

A Bank of America spokesperson would not comment on this story except to say that they are cooperating with investigators.

Meanwhile, the city has launched a formal, independent review of SPU's financial practices in an effort to identify accounts subject to "high risk transactions."

"We need to move forward now to immediately fix this problem," said Councilwoman Jean Godden. "Ratepayers demand and deserve financial accountability from the utility. And they will get it."

Phan is being held at the King County Jail on $750,000. He faces a statutory maximum of 10 years in prison.

Brandi Kruse, KIRO Radio Reporter
Brandi Kruse is a reporter for KIRO Radio who is as spontaneous and adventurous in her free time as she is on the job. Brandi arrived at KIRO Radio in March 2011 and has already collected three regional Edward R. Murrow awards for her reporting.
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Comments (26)


  • Add A Comment

  • fartforce1 wrote...
    I guess its just the Liberals letting utility workers do illegal things.
    March 6, 2012 3:15 pm
    Run for your lives! Liberals, yahhahaahahaha!
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • fartforce1 wrote...
    Mynorthwest.com moved the above comment from one story and put it here.
    March 6, 2012 4:45 pm
    Very funny mynorhtwest.com, check the time stamps for yourselves.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • CH wrote...
    BOA would take money from __________- you fill in the blank . . . .
    March 6, 2012 4:21 pm
    .
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Cameron wrote...
    Will Mr. Satterberg
    March 6, 2012 4:28 pm
    Insist that the BOA start requiring positive identification and proof of citizenship in order to open any accounts?
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Snout wrote...
    The PB was happy to get a tick mark on their sales report.
    March 6, 2012 4:42 pm
    Or they were in on it. Or they were just plain incompetent. The latter is my guess.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Basso wrote...
    LOL
    March 6, 2012 4:55 pm
    Ignore our incompetence and blame the bank! Love it.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • soo purletiv wrote...
    Minus the politicians, right.....
    March 6, 2012 5:36 pm
    ".....Prosecutors have charged a former city employee with 70 counts of theft in what they have called the "largest embezzlement of public funds in modern King County history." ..... ;-)
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • BikeNazi wrote...
    I'm shocked. SHOCKED!
    March 6, 2012 5:51 pm
    Do you think BofA would turn away a customer that deposits a MILLION DOLLARS into their organization? No way. Guys like me with considerable less than a million bucks are a real pain in the arse for BofA to deal with and they rather would not have to manage my tiny funds. A million dollar customer has a lot of capital BofA can leverage in more crappy mortgages and whatever other financial instruments they have.

    Bank of America, Wells Fargo and Chase Manhattan are three of the worst corporations in the country. This SPU guy is a very tiny problem compared to the douchebaggery in megacorporate banking.

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • edmondschris wrote...
    those of you
    March 6, 2012 6:04 pm
    who hate on BofA ask any boeing employee where the fund their paychecks comes from is actually held because guess what. its not BECU. BECU doenst have the ability to manage the amount of funds that go in and out of boeing.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • adiru wrote...
    By chance
    March 6, 2012 6:24 pm
    were there any increases in utility prices to the customers because of this revenue shortfall? If the city is able to get restitution, will the customers be credited and the rates be readjusted? Doubt it.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • John wrote...
    Don't blame Bank of America for SPU ineptness
    March 6, 2012 7:31 pm
    Yeah, yeah, yeah.... it's that darn big bank's fault. That nasty big bank.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • T-Bird49 wrote...
    Yes John it is the bank's fault
    March 7, 2012 11:20 am
    How could a person open a checking account under his name and "The City of SEA" without thorough documentation that the person represented that entity. How could $1M of checks made out to the City of Seattle be deposited into this account without someone taking notice.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Sean wrote...
    No, it's not their FAULT...
    March 7, 2012 12:25 pm
    But they sure as he11 should have seen what was going on and NOT LET IT HAPPEN. They're a BANK.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • { "Thumbs Up":"1","Thumbs Down":"-1" }