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Feds sue Utah and public safety officials, alleging millions in grant fraud

Posted at 8:20 AM, Apr 13, 2020
and last updated 2020-04-13 20:02:22-04

SALT LAKE CITY — Federal authorities have leveled a complaint against the state and some of Utah's top public safety officials, alleging millions of dollars in grant fraud.

In a complaint quietly filed in U.S. District Court over the weekend, the U.S. Attorney's Office for Utah sued the state and some of its top officials, including:

  • Ron Gordon, formerly the head of Utah's Commission on Criminal and Juvenile Justice (and now the governor's counsel)
  • Mike Haddon, the executive director of the Utah Dept. of Corrections
  • Leo Lucey, the Utah Attorney General's Chief of Investigations
  • Kirk Torgensen, formerly the chief deputy of the Utah Attorney General's Office
  • Former Utah Dept. of Corrections Executive Director Tom Patterson
  • Former corrections deputy directors Robyn Williams and London Stromberg
  • Col. Mike Rapich, the Utah Dept. of Public Safety's executive director
  • Dan Maldonado, the former director of the Division of Juvenile Justice Services
  • Former Utah State Courts Administrator Dan Becker
  • Rhett McQuiston, a former agent with the Utah Attorney General's Internet Crimes Against Children Task Force
  • Kim Allard, the director of services for the Utah Administrative Office of the Courts
  • Rich Townsend, the former director of Utah's Peace Officer Standards and Training

In the complaint, federal prosecutors allege the state and the defendants violated the U.S. False Claims Act by bilking the government out of millions in grant money by not following the requirements.

"Instead of properly using the grant money they received, Defendants misused it by replacing rather than supplementing state money. In particular, Defendants used federal money to pay salaries of existing State employees and then did not, when required, immediately fill the vacated positions. This amounted to Defendants supplanting rather than supplementing their agency budgets in contravention of the grant requirements and certifications Defendants made to DOJ," the complaint states.

U.S. Attorney for Utah John Huber's office declined to comment beyond the lawsuit, which has its roots in a whistleblower lawsuit filed by a Utah State Prison inmate in 2015. The federal complaint is part of a long-running feud between the state and the U.S. Department of Justice over documents related to the grants.

"The Utah Attorney General’s Office is aware of the federal lawsuit filed by an inmate in the state Department of Corrections and will continue a vigorous defense on behalf of the numerous defendants who are named," Attorney General Sean Reyes' office told FOX 13 in a statement Monday. "The allegations of wrongdoing occurred before AG Reyes or his leadership team took office. The AGO has cooperated to the extent it is allowed under legal and ethical rules."

Last year, FOX 13 reported on the existence of an investigation when federal prosecutors attempted to subpoena state agencies. They alleged in court filings that the Utah Attorney General's Office, the Commission on Criminal and Juvenile Justice, the Utah Administrative Office of the Courts and the Utah Department of Public Safety, and if they falsely represented job losses and budget cuts to obtain federal grants from 2009 to 2013.

Governor Gary Herbert's office told FOX 13 it would not comment on pending litigation. The Utah Administrative Office of the Courts and several of the agencies involved declined to comment and referred FOX 13 to the attorney general's office.

Utah Attorney General Sean Reyes (who said the conduct took place before he took office) insisted his office was cooperating. In a statement in February, he said his agency had turned over documents, made witnesses available and was even negotiating a settlement when talks broke down. He defended the agencies and officials involved as "upstanding public servants," and insisted there was no scheme to defraud the government.

A prison inmate filed a whistleblower lawsuit in 2015, but it was sealed by the courts. The lawsuit was unsealed in February. Reginald Williams said he became aware of alleged grant fraud while working in the Utah State Prison's printing shop. He retained attorneys and cooperated with the U.S. Department of Justice, who indicated earlier this year they would be taking over his litigation.

"They claimed that they needed money or that they were going to have to lay people off. The reality is, they had a budget surplus," William L. Schmidt, an attorney for Williams, said in an interview Monday with FOX 13. "They had millions and millions of dollars and they represented this to the legislature in Utah."

Schmidt said a legislative auditor-general's report backed up Williams' claims.

"They committed fraud by representing to the government that this money was needed," he said.

Schmidt said Williams saw the wrongdoing and tried to bring it to the proper authorities but was ignored, likely because of his inmate status. He also said his client has reported some retaliatory action while incarcerated since the original complaint in 2015.

In previous court filings, it has been claimed as much as $50 million in damages. However, the Utah Attorney General's Office has said the amount in question is closer to $10 million.

"There were victims in this case. There were other states that were in dire need of these funds to put people back to work," Schmidt told FOX 13. "They didn’t get the money. Utah got the money."