A former Seattle Public Utilities employee who embezzled $1.1 million from the utility was ordered today to repay more than $500,000 to the city’s insurance company to fully cover what he stole from taxpayers.
Joseph Phan, 47, pleaded guilty last year to 67 counts of first-degree theft for depositing into his own personal account checks that had been made out to the utility over a period of three years. He was sentenced in January to more than seven years in prison.
After his arrest, Phan turned over his pension, his children’s tuition credits and the deeds to several houses he had purchased with the stolen money. Police also seized $220,000 from his bank account. However, the amount recovered by the city fell short of what he stole by about half, according to court documents.
The city’s insurance company, Fidelity and Deposit Co. of Maryland, covered the city for the balance, court documents show.
In court today, attorneys for the insurance company asked the judge to set restitution at $527,827.
Court documents indicate that figure includes $48,743 the utility claims it cost to investigate the thefts, and nearly $73,000 in attorneys’ fees.
Phan, a civil engineer hired by Seattle Public Utilities (SPU) in 1995, was responsible for issuing water-access certificates to property owners and developers, and he was allowed to accept payments, prosecutors said in charging documents.
According to prosecutors, Phan began to divert money from the utility at the beginning of 2008 when he opened an account naming himself and the “City of Sea” at a Bank of America.
Over the next three years, he deposited 70 of the utility’s checks in his private account, prosecutors said. By the time he was caught, police and prosecutors say, he had stolen nearly $1.1 million from taxpayers.
He was fired after a 2010 audit of the utility’s financial controls showed that he had doctored his own utility bills. His larger deception was discovered later when the company discovered dozens of checks in his project files that had been deposited in his private account rather than the city’s, according to prosecutors.