Whistleblower Claims San Mateo Transit Agency Hid Millions with Second Set of Books

Thursday, February 20, 2014
David Ramires (photo: NBC Bay Area)

Last September, when San Mateo County Transit District (SamTrans) accountant David Ramires told NBC Bay Area that the agency was inflating its expenses by millions of dollars to justify its budget requests, officials claimed honest mistakes over much smaller amounts.

When NBC reported last week that Ramires had a second set of books that substantiated his claims, SamTrans officials changed their story—and blamed him.

SamTrans, which operates Caltrain, SamTrans buses and the San Mateo County Transportation Authority, warned its board of directors in September that the TV station was “relying on false allegations by two disgruntled ex-employees” to allege a “pattern of fraud.” SamTrans Executive Officer for Public Affairs Mark Simon wrote that CEO Mike Scanlon “categorically denied the allegations” and said they amounted to bookkeeping errors totaling $300,000 over three years out of a total budget of $500 million.

Scanlon was said to have characterized the allegations as “delusional,” while Simon described the NBC reporters as “extremely aggressive” and rude.

Ramires, who worked for SamTrans from 2001-2012, said the changes in the books were anything but honest. He said he worked with finance managers to create fake and inflated expenses which allowed the agency to build up reserves that they could tap at their own discretion. “A million dollars was Gigi’s goal every year to get in budget money,” Ramires said of Chief Financial Officer Gigi Harrington.

NBC reporters said they used Ramires’ data to file requests for records to verify his claims and said they found more than a million dollars in expenses that had no confirming data. After looking at checks, invoices and other documents for expenses in 2011, NBC highlighted a number of questionable figures.

For instance, the station could only find $701,196.71 in backup data for SamTrans claims that it accrued $1,692,341.41 for Amtrak services. Forensic auditor Eugene Yano told NBC that it was particularly troubling that SamTrans defended some of the erroneous expenses as having been unilaterally filed without review by management.

“A unilateral action should not be possible in a big organization like this,” Yano said.

Maze and Associates, an audit firm hired by SamTrans to look over its accounts, provided NBC with a supplemental report that verified more than a million dollars of expenses that lacked requisite backup material.

Upon learning of the new allegations by Ramires, SamTrans emailed NBC that the main problem was “action taken unilaterally by a former employee.”

–Ken Broder    


To Learn More:

SamTrans Accused of Hiding Millions of Public Dollars (by Vicky Nguyen, Kevin Nious, and Jeremy Carroll, NBC Bay Area)

“Employee X” Blows Whistle on SamTrans (by Bill Silverfarb, San Mateo Daily Journal)

Insiders Allege Fraudulent Accounting at SamTrans (by Vicky Nguyen, Jeremy Carroll and Kevin Nious, NBC Bay Area)

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