Man pleads ‘not guilty’ in $1M theft from Seattle

A former Seattle city employee accused of embezzling more than a million dollars in public funds pleaded not guilty Monday, according to the King County Prosecutor’s Office.

Joseph Phan, 44, faces 70 counts of criminal theft in what prosecutors have called the “largest embezzlement of public funds in modern King County history.”

Phan 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 as a project engineer for the utility.

“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.”

Meanwhile, the city of Seattle has filed a lawsuit against Phan to recover the stolen funds.

“Our goal is full financial recovery for ratepayers through swift and aggressive civil remedies,” City Attorney Pete Holmes said in a statement. “The county prosecutor will address the criminal consequences of Mr. Phan’s conduct.”

The lawsuit, filed in King County Superior Court, accuses Phan of civil fraud, conversion of city funds, breach of fiduciary duty, and unjust enrichment. A judge granted the city’s request to freeze the assets of Phan and his wife, Tra My Thi Le.

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

According to Homes’ office, those ill-gotten gains include several undeveloped real estate lots and a rental home in Seattle.

Phan remains in the King County Jail on $750,000 bail.