2News Investigates: Former state worker fraud case

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A 2News exclusive investigation reveals more than $1 million of taxpayer money was allegedly taken by a state employee. The attorney general’s office charged the worker and says he used it for his own personal gain.

The 2News investigates team spent months poring over evidence in this case and digging into the consequences this employee faced.

Our probe uncovered some startling revelations. Not only did Daniel Wayne Clark capitalize on a lack of oversight in the contracting process, our investigation reveals the criminal prosecution by the state raises serious questions about whether Clark got a slap on the wrist.

A SCHEME TO DEFRAUD?

Daniel Wayne Clark was awarded Employee of the Year in 2011 by the Department of Natural Resources. But the longtime employee had been harboring a secret from his employer. Prosecutors with the Office of the Attorney General say when Clark was State Parks and Recreation Construction and Development Manager, he began a scheme which ultimately defrauded taxpayers when he used his position to award multiple paving and grading contracts to his business, Colt Paving Inc., without disclosing he was president of the company. It’s not clear when the scheme allegedly started, and the AG’s Office said it would not speculate but records 2News Investigates obtained reveal the Department of Parks and Recreation had a relationship with Colt Paving as far back as April of 2000.

LACK OF OVERSIGHT

A months-long 2News investigation reveals Clark capitalized on a lack of oversight in the contracting process, and the criminal prosecution by the state raises serious questions as to if Clark got a slap on the wrist. In the end, the AG’s office maintained Clark was compensated a total of $1,309,408.15 as payment for invoices he submitted since 2000. Clark received those payments in form of checks from the state, some of which he cashed and, others he deposited into his own personal bank account. According to DNR, an affidavit for a search warrant and a declaration for probable cause statement, the fraudulent activity was discovered in July 2020 by DNR staff.

THE CHECKS

We requested bid sheets Clark wrote, invoices he submitted and copies of the checks the state issued to Clark. Janica Gines, Utah Department of Government Operations Division of Finance Director provided transactions from their data warehouse. We received copies of 86 checks the state issued to Colt Paving Inc., beginning in 2014 which Dan Clark endorsed and either cashed or deposited into his bank account.

The total amount: $434,454.00. The Division of Finance has a 7-year retention policy and was unable to find checks dating back any further. However, they provided 2News Investigates with a spreadsheet listing Colt Paving Inc., as the vendor and showing Clark was issued checks starting in 2000 up until 2020. According to Gines, that spreadsheet is a data pull of all of the payments made to Colt Paving.

BID SHEETS AND INVOICES

We also submitted a public records request to the Division of Natural Resources for copies of Clark’s bid sheets and invoices. Tammy Fine, Record Officer for the Utah State Parks and Recreation provided the following:

According to the affidavit for a search warrant in this case, Special Agent Patty Reed with the AG’s office, noted that many of the invoices from Colt Paving Inc., were for just under $5,000. As alleged in the affidavit, this caught the attention of Scott Strong, the Deputy Director of Business Management for the Utah Division of State Parks & Recreation early in the investigation. He allegedly told investigators that if a bid is below $5,000 it has to go through a process with different controls. You can see that many of the invoices 2 News Investigates obtained clearly show they were under that threshold.

WHERE’S THE MONEY?

So, what did Clark do with the money? Charging documents shed some light but only account for a miniscule amount of the money. According to the declaration of probable cause and indictment, during an interview with investigators, Clark produced 13 copies of monthly credit card statements from a home improvement store account. The documents show Clark wrote notes on the statements supposedly listing things he bought to do work at the parks. But, according to the court filings, a corporate investigator for that company researched the transaction dates, inventory numbers and compared them to Clark’s notes. According to the document, Clark bought a terracotta rug, turf builder mix, bungee cords and an attachment for a lawn mower. According to investigators, the dates and item numbers didn’t reconcile. AG investigators asserted his notes were “false” and an attempt to “hinder the investigation” which initially resulted in the obstruction of justice charge.

AG’S OFFICE: NO CLUE WHERE THE MONEY WENT

We asked Rich Piatt, Director of Communications for the Utah Attorney General’s Office if any of the prosecutors who worked the case knew where the money went. In an email Piatt told 2News:

“None of our attorneys know what happened to the money after Clark took it. We prosecuted the theft (s) themselves based on the evidence that was available. Perhaps his defense attorney could shed light on this situation.”

THE POLYGRAPH

2News Investigates also obtained internal investigative records from the Attorney General’s Office. Those records provided insight and details about Clark and the alleged scheme prosecutors contended Clark perpetrated against his employer and taxpayers.

On June 1, 2021 Wally Bugden, Clark’s attorney sent a letter to Criminal Deputy Craig Barlow and Assistant Attorney General Janise Macanas, Director of Special Prosecutions and the prosecuting attorney on this case. Bugden wrote that “As soon as we knew there was a criminal investigation, we knocked ourselves out to be as cooperative as possible with Patty Reed.”

Bugden further wrote that his client agreed to be interviewed by investigators and that his client took a polygraph after the interview. He then wrote that relations “soured” and he was “flummoxed” when charges were filed against his client without so much as a “courtesy phone call.”

Bugden said Clark was questioned about performing the work during the polygraph and passed. He wrote, “Dan did the work” and that “He was not invoicing for phantom work.” Bugden went on to plead with prosecutors, writing that his client was “extremely contrite” and adding “he knows he screwed up . . . he knows he committed a crime.”

THE PROPOSED PUNISHMENT

Bugden’s proposal to prosecutors: allow Clark to plead guilty to ten counts of Attempted Communication Fraud, which are Class A misdemeanors, and pay $30,000 in restitution. Bugden recommended Clark serve 30-days in jail and probation under the supervision of Adult Probation and Parole. The Attorney General’s Office initially indicted Clark on 8 felony counts of communication fraud, pattern of unlawful activity, obstruction of justice and using his position to secure privileges.

A SWEETHEART DEAL?

After receiving Bugden’s proposal, records show prosecutors eventually offered Clark a deal. Clark was to plead guilty to two counts of Communication Fraud, which were third-degree felonies. In exchange, Clark would serve no jail time and be placed on court probation for two years. As part of the plea deal, there would be no request for early termination of probation under any circumstances. Clark would also be required to pay $25,000 in restitution directly to the Attorney General’s Office.

CLARK PLEADS GUILTY

On July 21, 2021, Clark, 60, pled guilty to two felony counts of Communication Fraud. During sentencing, Bugden walked back some of his earlier claims that Clark performed the work. An audio recording 2News obtained from the Utah State Courts captured the proceeding in its entirety even though the audio is grainy and inaudible in parts.

“There is evidence my client did not, not only did he award contracts to his own company, but he did not perform the services that were invoiced,” said Bugden.

Then it was Clark’s turn to enter his plea.

Presiding Judge Mark S. Kouris: Are you pleading guilty because of the fact you are guilty?

Clark: I am guilty sir. Very remorseful, I am sorry for the things that I have done, and I apologize again.

The Court accepted the deal and sentenced Clark to the terms the parties had agreed to. 2News has confirmed Clark has since paid the restitution.

THE…

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