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Henschel: Owens won't serve on Police and Fire Commission panel that will decide Alba's fate

Complaint alleges as a DPW worker he and others misappropriated thousands of dollars

Aug. 6, 2013

Citing a violation of the City of Waukesha's Code of Ethics, Mayor Jeff Scrima has exercised his statutory authority to immediately suspend Dan Owens from serving on the Police and Fire Commission.

The suspension is pending the outcome of the hearing of charges against him for his permanent removal from the PFC.

Owens is a former Department of Public Works employee who has been accused of stealing scrap metal from the city by failing to turn over cash or checks received from scrapyards, along with two other former DPW employees.

Scrima had previously asked for Owens' resignation when the investigation began this spring. The three employees were initially put on paid administrative leave.

A copy of the charges against Owens, the suspension letter, the Sheriff's Department Investigation, Forensic Report Executive Summary and the employment investigation interview notes conducted by the City of Waukesha were released Monday.

The investigation done by the Waukesha County Sheriff's Department, which included a forensic audit report, alleges that while Owens was an employee of the city and a Police and Fire Commissioner he misappropriated from the city more than $13,200 received by him in payment for city scrap metal delivered by him in city trucks to scrapyards.

The charges allege that Owens was not authorized by the city to retain the money paid to him in return for city scrap.

Using the money

Henschel said in the written charges that according to a report provided to the city by the Waukesha County Sheriff's Department, Owens acknowledged to a detective that he believes that since 2009, he has kept money he received from the sale of city scrap "in an amount less than $4,000."

Owens told the detective he considered the money a "perk" of his job with the city, the written charges say.

According to an interview with the Waukesha County Sheriff's Department, Owens said he would give a now-retired supervisor "oodles of money over the years." He said the supervisor always told him cash, no checks, according to the report. Owens said out of that money, the supervisor would give them money for tools and to buy pizza.

"Ethically, I knew it's wrong and I'm sick about this," Owens told a Waukesha County Sheriff's Department detective. Owens also said in his interview they gave thousands of dollars for parties at the shop.

But he added that if this scrapping was an issue, "(our current supervisor Steve Dzieken) should have told us about it and we would have changed our ways."

DA's investigation ongoing

Charges have been referred to the Waukesha County District Attorney's Office. DA Brad Schimel said the investigation is ongoing.

Nevertheless, Henschel said Owens' conduct makes him unable to properly exercise judgment with respect to charges against members of the city's Police and Fire Departments.

"His personal wrongful conduct described in the Waukesha County Sheriff's Department reports render him incapable of fairly judging the conduct of other public officials, officers or employees or participating in the preparation of rules and regulations governing such conduct," Henschel said.

With embattled Fire Chief Jesse Alba's hearing on a complaint of allegations of sexual harassment scheduled for 5:30 p.m. Aug. 21 (before the Common Council will vote on the HR Committee's recommendation for Owens), will Owens be able to decide Alba's fate as a member of the PFC?

Henschel said an emphatic, "No" when asked Monday.

Without Owens on the PFC, this would leave the Police and Fire Commission with four members: Chairwoman Cheryl Gemignani, Vice Chairman Steve Mackie and citizen members Linda Evanoff and Frances Kritzer.

Henschel said he didn't believe a temporary member would be named for Alba's case. When asked what would happen if there would be two votes for Alba to stay and two for him to be fired, Henschel wasn't sure.

Before that, the Common Council on Thursday will review and act on a request from Henschel to retain attorney John Bruce to represent the city involving Owens. The city's attorney is representing the PFC.

The Common Council will also go into closed session to consider a proposed employment severance agreement for Owens and the DPW employees allegedly involved and to discuss with legal counsel back pay claims filed by Owens and one of the former DPW employees.

Audit's conclusions

The audit regarding the thefts, done by The BERO Group, says the three former employees misappropriated payments made by Waukesha Recycling between 2009 and 2013 totaling $20,684.

At Waukesha Iron and Metal, $16,925 was misappropriated in payments in 2011 and 2012. The audit said a lack of management oversight and ready access to cash are the primary factors contributing to the fraud.

According to a DPW internal investigation, Owens said "we were never told what yard to take scrap." According to the investigation results, the now-retired supervisor said to keep the scrap under $600 and get cash.

Employees were told the money was for the purchase of tools and retirement lunches, the investigation concluded.

According to an interview, Dzieken became aware of employees keeping cash for the sale of scrap in March 2013 and reported the incident.

Through various interviews, inferences were made that other employees were involved in the practice of selling scrap and keeping money. Henschel notes, however, no specific employees or amounts of money involved were identified by the Sheriff investigators or the forensic audit.

Henschel adds that of the three employees, one has retired, a second has agreed to retire and a third has agreed to resign.

Henschel concluded that "there is no question that DPW employees sold scrap material and that some of the money was turned into the DPW supervisor and some was kept by employees."

More than $40,000 missing

The audit concluded that about $37,600 was fraudulently misappropriated from the city due to city employees failing to turn over cash or checks received from scrap yards. The audit adds that it is reasonably probably that an additional $6,400 was misappropriated for a total fraud of $44,000.

"It also appears that there was a culture within the department that suggested that keeping the money for lunches, parties and purchase of tools was acceptable," Henschel said. "In some manner this culture extended to keep cash for personal use."

Procedures, Henschel said, that in some instances employees were told not to get a receipt from the recycling companies for the scrap.

Owens' attorney Dan Fay said last week that his client is being targeted for "telling the truth." He also disputed the claim that the city is out all of this money.

"I don't know how they're out $40,000 when all the money was brought back to them," Fay said.

Fay added after talking with retired DPW employees, it's common for employees, while under orders, to go to a scrapyard and take items to Waukesha Iron and Metal, turn it in for cash or checks payable and bring it back to the foreman.

Also on Thursday Council will make a referral on Owens' removal from the PFC to the HR Committee a public hearing will follow before final recommendation to the Common Council.

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