FBN Exclusive: DA May Refer MUD-ECO Case to Texas Rangers (After a year of investigations?)—
After A Year, DA Says ECO Resources Fraud Case May Be Investigated By Rangers
by Bob Dunn
. . . While ECO initially acknowledged losses of $145,000 in the embezzlement scam, officials later indicated the total had reached $200,000. Sources recently indicated the losses may have greatly exceeded even that amount.
ECO was founded by Fort Bend County Judge Bob Hebert, who served as its chief executive officer for 13 years and was still under contract as a consultant as of 2005. The company now is owned by Southwest Water Co., a $200 million publicly traded corporation headquartered in Los Angeles. . .(click title link above for entire story).
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Comment: Did any of Sienna Plantation's 12 MUD boards who all use ECO resources with AHB consults ever do an external audit to double check the figures initially provided??? Who is protecting the taxpayers with all the conflicts found in this FBN article?
posted by responsible_dvlpmnt at Monday, November 20, 2006
9 Comments:
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Background on this:
http://www.fortbendnow.com/news/289/eco-resources-discovers-employee-ran-mud-billing-scam
more:
Texas Rangers May Be Called To Investigate MUD Financial Scam
by Bob Dunn, Nov 11, 2005, 12 38 pm
The Texas Rangers may wind up investigating a scam through which several local municipal utility districts were bilked of nearly $200,000.
In September, managers for Sugar Land’s ECO Resources discovered evidence of an apparent scheme through which several MUDs – all ECO customers – had been falsely billed for a total of more than $185,000 in work or services never performed.
The company fired Janet E. Trentham, of Missouri City, one if its client managers, in connection with the scheme.
ECO, which manages and operates more than 120 municipal utility districts, agreed to make restitution for the $185,000-plus in losses to MUD districts that’s been identified so far, and also hired a forensic accounting firm to conduct an audit and determine if there were any further losses.
ECO alerted Fort Bend County District Attorney John Healey to the apparent scam, and agreed to turn findings of the forensic audit over to his office once it’s complete.
On Thursday, Healey said he’s spoken with Jeff Cook of the Texas Rangers about the matter. If the audit shows a criminal investigation is warranted, Healey said, he intends to ask the Rangers for assistance, and the Rangers “will accept any request I make.”
ECO Resources, which was founded by Fort Bend County Judge Robert Hebert, now is owned by Southwest Water Co., a publicly traded company headquarterd in Los Angeles, with whom Hebert has a consulting agreement.
Southwest’s John Boardman, who manages ECO operations, said the forensic audit still is being worked on, but may be completed by the end of November.
“I’m trying to push them to a resolution,” Boardman said of the auditors, “and they’re trying to remind me that they need to be thorough.”
Meanwhile, Trentham has been served notice that she’s being sued for fraud by one of the victimized MUDs.
First Colony MUD #9 filed suit against Trentham last month in Fort Bend County District Court. The lawsuit alleges Trentham obtained more than $25,000 from the utility district through fraud, and seeks actual and punitive damages, an accounting of Trentham and all her financial records, interest on money taken by fraud, and attorney’s fees . . . (http://www.fortbendnow.com/news/371/texas-rangers-may-investigate-mud-scam)
more:
http://www.fortbendnow.com/business/495/audit-firm-sheds-light-on-workings-of-eco-billing-scam
MUD District Wants Out Of ECO Contract
by Bob Dunn, Nov 30, 2005, 07 42 pm
Pecan Grove Municipal Utility District board directors agreed Tuesday to end their operational contract with Sugar Land’s ECO Resources and put the contract up for bid.
The action was taken out of concern over a financial scam uncovered at ECO in September, MUD Board President Joe Taylor said Wednesday. ECO client manager Janet E. Trentham was fired after company officials discovered an embezzlement scheme in which more than $185,000 was taken from several MUDS that were ECO clients.
Taylor said Pecan Grove MUD spends more than $1 million annually with ECO, and has had a contract with the company for nearly eight years, which is set to continue for another year.
“It’s time to find out whether there’s a more economical way to do things, with tighter controls,” Taylor said. “Really, what we want to do is tell (ECO) we are going to entertain bids, and there is some lack of confidence in their internal controls.”
He said the MUD’s contract with ECO allows the district to end the agreement with 60 days’ notice, but the board intends to negotiate an early release.
“We’re not excluding ECO,” Taylor said, and if the board can “get a level of comfort” with the company’s financial controls, it’s possible they could continue to be an ECO client.
ECO Resources, which was founded by Fort Bend County Judge Robert Hebert, now is owned by Southwest Water Co., a publicly traded company headquartered in Los Angeles, with whom Hebert has a consulting agreement. . .(http://www.fortbendnow.com/news/424/concerned-over-scam-pecan-grove-mud-wants-out-of-eco-contract)
More comments on this:
1 Tom Hilton - Dec 21, 06:18 am
Howdy,
It looks as though there is alot more to this here than meets the eye.
Quote;
“What’s nice is, this is not a court of law, and so I don’t have to answer ‘yes or no,’” Boardman (ECO Manager) said.
“We at least know of $6,440 in additional over-billings that your auditors haven’t found,” Hendershot said. “I’d like you to explain to the board why you continue to refuse to bring the back-up documents so we can conduct our own review.”
and…
“Attorney Lennea Cannon, also with Kerr & Hendershot, said “at first” ECO officials had said the MUD was welcome to any documents it wanted.
“How many were produced?” Hendershot asked her.
“Zero,” she replied.”
This accounting scandal has revealed a number of ethical lapses, and since County Judge Bob Herbert has a business relationship with ECO, I would like to see full PUBLIC disclosure of that relationship. This would include but is not limited to; 1) A copy of Judge Hebert’s contract detailing the type of “consultation” provided, and 2) A copy of the compensation package from ECO to Judge Hebert.
There is a clear Conflict-of-Interest at play here.
Sincerely,
Tom Hilton
2 consumerwise - Dec 25, 04:10 pm
From what I’m reading this appears to be an internal investigation. Even by handing this over to the county DA, who receives his budget from the county commissioners (ergo chief county judge Hebert), it would appear that not enough separation between policing agencies and governmental over-site exist. Why not call in the attorney general’s office along with the rangers for a full investigation and why hasn’t the primary culprit in this had any criminal charges filed yet? Is there something Trentham knows that isn’t being shared? I encourage everyone to keep following this since many area MUDs are involved in this.
It looks like several MUDs that are looking for alternative companies for bids are acting prudently on this and in the best interest of their tax payers. Stay vigilante!
from: http://www.fortbendnow.com/news/508/first-colony-mud-board-grills-eco-managers-over-billings
current comments from FBN thread:
1 Ron - Nov 18, 12:41 am
Hold on John, before you jump the gun you better check with Mike and make darn sure Trentham didn’t make any political contributions to any of your staff or staff’s family before you assign the case.
2 Chris Calvin, Ph.D. - Nov 18, 09:54 am
“As for a potential criminal investigation by the Texas Rangers, District Attorney Healey said Friday that likely will happen after his in-house review of the case is wrapped up – probably within three weeks.” FBN
*****
It has taken the DA a year to refer this case that may impact so many taxpayers in this county? This is a great follow-up Bob and one that also generates additional questions, given the multitude of claims made in the story above, especially that more people may have been involved (more managers, executives, etc?). Who imposed a gag order on an issue that includes so many taxpayers in the county? Is this the same Vacek that we’re all helping to water his cattle???
I know that AHB law firm represents ECO and most of the MUD boards here in Sienna Plantation and basically our boards took whatever they were told by AHB (Allen, Humphries and Boone) with regard to losses (no external audits that I’ve seen in the minutes here).
AHB is a big campaign giver to the former CEO and consultant Bob Hebert (current chief county judge). They’ve further worked on many of the developer’s agreements out here in our neighborhood.
I would certainly hope that all these conflicts of interest would be investigated and an accurate financial tally could be accounted for by our DA, Rangers and any other tax supported agencies that are supposed to keep an eye on our dollars.
Citizens should be outraged. Thanks for recovering this not so old ground Mr. Dunn.
Who is watching the henhouse?
3 Matthew Feinberg - Nov 18, 08:23 pm
Typical… Fort Bend politics.
I bet this is only the tip of the iceberg.
4 anon - Nov 19, 07:00 am
I wouldn’t doubt it Matthew. I just got an e-mail from a former MUD board member I know and he said they basically accepted the numbers AHB gave them. Since a public company owns ECO now and this type of information is sensitive me doth smell a rat!
My greatest concern is why aren’t the MUD taxpayers being adequately protected in this? Doesn’t AHB also contribute to the DA’s campaigns too?
Ethics..ethics!
See more commissioner related word from http://www.brazosriver.com/#nov20
November 20 - Well, it’s county commissioner and PBS&J tainted money time again.
I got distracted by county commissioner Andy Meyer’s Jesus and I Hate You Crusade, but the ball to hell never stops rolling when there’s greedy commissioners and dirty corporations involved.
As you recall, our county commissioners and the county judge have been taking whooper generous campaign contributions from PBS&J, a Florida company in a whole mess of trouble over illegal practices, including illegal campaign contributions.
PBS&J has done a lot of work for our toll road authority.
Come to find out, those campaign contributions to court and woo our county commissioners may have ended up costing us some major bucks.
"It doesn't matter if the governor is Republican or Democratic," Muszynski said of the toll agency. "It's used for fundraising and political patronage." Muszynski, who has opposed some of the proposed expansions of the expressway, said the ongoing problem is simple: Only one of five members is an elected official. "It's not accountable," said Muszynski, who was in elected office for almost 10 years. "It's a black hole of public scrutiny."
The black hole of public scrutiny. If that ain’t a suit that fits like a glove for our county commissioners, I don’t know what is.
If we had one of those district attorney thingys, we might could get some campaign ethics and save ourselves a boatload of taxpayer dollars. . .
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