Michael Minh Nguyen: Unethical Choices Lead to Finance Services Manager Downfall

In the City of Placentia, California the Finance Services Manager, Michael Minh Nguyen was given a 25-year sentence plus an order to pay the city approximately $2.6 million in restitution for the $5.2 million in funds he embezzled and approximately $10.3 million in fines. He is now 37 years of age and he will likely be behind bars for the most of his adult life. Financially, his life is ruined unless he is lucky enough to win the state lottery. He is a white-collar criminal, with an emphasis on the word “criminal.” Here’s the full story.

He will have company in jail, Herbert Norris Trotter Jr., is facing 37 years in jail as Nguyen’s co-conspirator for his role in money laundering and theft along with Michael Todd McDonald of Henderson, Nevada, who was part of the money laundering scheme. He faces 58 years in jail, which is effectively a life sentence.

The District Attorney, whose name is Tony Rackauckas said:

“Today’s conviction sends a strong message to all stewards of the tax payers dollar; if you abuse the power entrusted in you and steal from the people in Orange County, our office will work long, hard, and fast to uncover the truth and prosecute those involved to the fullest extent of the law.”

The Need and the Opportunity

As the Finance Services Manager, Nguyen was responsible for wire transfers from the city to legitimate accounts. At some point, he discovered an absence of oversight. Instead of transferring the money into city accounts, he started wiring money into his personal accounts, and it wasn’t penny ante stuff either, it could be a million or more dollars at a time. He concealed his activities by changing the financial ledgers. There is no doubt as to his intentional and unethical behavior. He set up a shell company, put money in there and then laundered that money into the personal accounts of family members. Not only was he complicit, but so too his relatives.

The need? The real need was apparently a gambling addiction. About $2.3 million was funneled from city funds into a Las Vegas gambling venture of some kind, and about $750,000 was used for flat-out gambling. The other co-conspirators helped enable the gambling scheme and the laundering.

After a while, the FBI began to suspect something was amiss in Placentia and began to track the funds that were being transferred. They “froze” the transfers into the personal accounts and then reversed them back to the city.

Upon sentencing Nguyen, city officials and the DA expressed outrage that a man who had grown up in Placentia would take so much advantage of the hard-working people who lived there. Apparently, Placentia is not a wealthy community and everyone wanted to know, “How could you, sir?”

I know precisely how it happened. There was an ethical breakdown, Nguyen and his co-conspirators saw the opportunity due to an absence of oversight, and they made the choice to steal and then launder millions of dollars.

While Nguyen and his co-conspirators were guilty, the City of Placentia must share some of the blame for failing to do enough to protect its citizens. When the transfers first started to occur, someone should have been in charge of Nguyen’s activities. Apparently, no one cared enough to be in a supervisory role even on a sporadic basis. The checks and balances that should have been there, weren’t.

There was a need for a high degree of ethics training throughout city government and especially in the finance area. Nguyen and his family members apparently had no compunction in their plot to steal. It was up to the city to put up stern warnings and ethical barriers to make certain this kind of behavior would not be tolerated. The costs of ethical training would have been minimal in comparison to the money that was stolen.

Many unethical choices were made. While a gambling addiction and certainly a “greed addiction” played a role, the lack of ethics sealed the deal. It could have all been prevented.

 

 

Posted by Chuck Gallagher in Governmental Ethics and tagged , , , , .

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