After months of investigation, three employees with the City of Waukesha’s Public Works Department face charges of misdemeanor theft, allegedly scrapping city property for “donut money.”
Daniel Llanas, 57 of Waukesha; Steven Olson, 59 of Eagle; and Daniel Owens, 48 of Waukesha were each charged on Wednesday, Oct. 23 in Waukesha County Circuit Court with misdemeanor theft.
Owens resigned from the city’s Police and Fire Commission in August after Mayor Jeff Scrima suspended him, citing the investigation by the Waukesha County Sheriff’s Department
According to a city forensic audit report released at the time, over $20,000 in scrap metal was sold to Waukesha Recycling between 2009 and 2013. The report concluded that a lack of management oversight and ready access to cash are the primary factors contributing to the fraud.
District Attorney Brad Schimel said in an email that his office decided not to pursue felony charges against the men for a myriad of reasons, including the possibility that others were involved.
“While we can not prove that others were involved, the assertions the defendants have made are not patently incredible,” Schimel said. “Unfortunately, for many years the accounting practices utilized were less than ideal, so the evidence gets less clear the further back we look.”
Schimel said that all three men were fired as a consequence of their actions and the charges issued, “are an attempt to reach a balance.”
According to tax records listed on Guidestar.org, Llanas has also served as secretary and treasurer for the City of Waukesha employees’ union, AFSCME Local 97, since at least 2010.
The three men could face up to nine months in prison and $10,000 in fines if convicted.
According to the criminal complaint, Streets Division Supervisor Steven Dziekan first brought the thefts to the attention of Waukesha City Police on March 4. Dziekan told police in the complaint that Llanas had made a comment about scrapping faulty wiring, asking Dziekan if he was going to use the money to buy “lunch or donuts.”
Dziekan said he did not authorize the scrapping and Llanas offered him $80 in cash he had made off the sale, the complaint states. Police pulled records from Waukesha Recycling, where Llanas sold the wire, and found that he had allegedly received $176.22 for it.
According to the complaint, records further revealed that Llanas, Owens and Olson had sold over $10,000 worth of scrap metal in about a year. Photographs dating back to 2009 allegedly showed the three men, dressed in city uniforms, dragging street signs, utility poles and aluminum light poles into the shop.
Dziekan told police in the complaint that normal practice was to sell scrap to Waukesha Iron and Metal, a company with which the city had contracted services. The money and receipts were supposed to be provided to an office secretary, who would then deposit the funds with the City Treasurer.
Llanas told police in a statement that scrapping city property was a 30-year tradition. According to the complaint, he claimed he had been scrapping city property since about 2006, with the permission of the former Streets Division supervisor.
He said the former supervisor would give employees some of the scrap money, but employees would often skim some off the top themselves, the complaint states. The money would then apparently be used to purchase tools and pay for retirement parties.
He claimed in the complaint that he took less than $700 for himself since 2009.
Olson, an employee for 15 years, originally claimed in a statement that he did not take any money and had only scrapped one item in the past year. According to the complaint, he changed his statement after police presented evidence that showed he had sold scrap on 16 occasions since August 2011.
“In my eyes, it was wrong, but in the past we were told to do it,” Olson said in the complaint. “Everyone, the whole shop, since the incinerator was there, kept scrap for themselves.”
Waukesha Recycling staff cross-checked the names of all 48 individuals employed by the department to see if they had sold scrap. Investigators concluded that the only employees who had come in with city property were Llanas, Olson and Owens, the complaint states.
Owens said in a statement that he knew the thefts were wrong and claimed he had given the former Streets Department supervisor, “oodles of money over the years.”
The former supervisor, not named in the complaint, told police that scrap money was kept in a safe and used for parties, but employees were not supposed to keep any money.
He said after he retired, policy changes dictated that the money go to the City Treasurer and into the City General Fund.
The City Treasurer told police that in all the records dating back to February 2009, only two receipts indicated that scrap metal had been sold to Waukesha Recycling.
The three men are expected to make an initial appearance in court on Nov. 11.
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