Summit PUD embezzler faces prison time
Embezzler and Norden-resident Steven Grimm pleaded no contest to stealing more than $300,000 from the Donner Summit Public Utility District while he was general manager at the agency and his wife, Sandra Harmon, sat on the board of directors.
The no contest plea, the equivalent to pleading guilty, came in Nevada County Superior Court’s Truckee division Tuesday. Grimm embezzled public funds between 2000 and 2002. He could also receive a two-year enhancement for stealing more than $150,000 from the utility district. In total, Grimm faces a maximum four-year prison sentence, with a two-year enhancement.
Grimm will also pay $384,000 restitution to the DSPUD as a condition of his plea.
“Certainly the district is pleased with the outcome,” said Tom Skjelstad, the utility district’s current general manager. “We are grateful that justice was served and that this closes an unfortunate chapter in the district’s history.”
Grimm’s plea was the result of several felony conferences and negotiations between the defense and prosecution, said assistant district attorney Ron Wolfson.
“No doubt, Mr. Grimm was guilty,” said Wolfson, who commented on behalf of deputy district attorney James Phillips.
Grimm’s criminal lawyer, Dale Wood, had no comment for the Sierra Sun at press time.
Geoffrey Evers, attorney for DSPUD, said he was pleased with the outcome, which came one day before Grimm’s scheduled preliminary hearing.
“It saved the district attorney, the taxpayers and the district a lot of time, money and expense. Not taking this to trial was the most efficient, quick way to do it,” he said.
Evers said he was not surprised Grimm admitted to the crime.
“Any logical person would look at the stack of cards against him and take the guilty plea,” he said. Among the evidence was hundreds of thousands of dollars of DSPUD checks signed by Grimm to Donner Ski Ranch and other Norden-based businesses where Grimm was agent for service of process. “How do you walk away from that?”
In early July, Grimm pleaded innocent to the embezzlement charges. Later that month, the evidence against Grimm began to build after authorities searched his Norden and Doyle, Calif., homes.
Bank statements and computer equipment led authorities to believe Grimm had stolen more than $500,000 from the Donner Summit Public Utility District.
In earlier searches, investigators found account histories, bank documents and cancelled checks – many made out to Donner Ski Ranch, Donner Spitz Inn and Donner Summit Tramways where Grimm was an agent for service of process.
The bulk of the missing funds were accounted for in handwritten checks – some for as much as $15,000. On some of the checks, investigators believe Grimm forged the signature of Julie Davies, DSPUD board vice president.
Initially, Grimm told investigators the checks were given to Donner Ski Ranch, Donner Spitz Inn and Donner Summit Tramways for services provided to the DSPUD.
Robert Tamietti – attorney for the Norden-based businesses – said Grimm contends the businesses still have the stolen funds.
“[Grimm’s] story is, ‘I gave it to the Ski Ranch.’ I wish that were true. It would make it much easier on us,” he said in a phone interview Wednesday.
Other checks were used to purchase items at Comp USA, Best Buy and Costco. One check was made out to Fairfield Cycle Center for a $4,500 ATV, which was later found by Nevada County Sheriff’s investigators at Grimm’s Doyle home.
The lawsuit and bankruptcy filing
Although the criminal proceedings in the Grimm case are nearly complete – save for an upcoming sentencing hearing – Grimm’s troubles aren’t over on the civil front.
Earlier this year, the Donner Summit Public Utility District filed a lawsuit against Grimm and the three Norden businesses where Grimm was an officer.
No specific amount has been named in the lawsuit, yet.
Since Grimm has been convicted of embezzlement, he cannot take the Fifth Amendment in the civil proceedings because he’s no longer at risk of self-incrimination.
“That’ll speed things up a bit on the civil front,” Tamietti said.
By all accounts, the utility district has been relatively easy on Donner Ski Ranch and the other businesses. Evers has said the DSPUD only named Tamietti’s clients in order to “protect the district’s interests.”
If the utility district continues to pursue compensation from Grimm beyond criminal restitution, it will only be the beginning of Grimm’s financial troubles.
On Sept. 5, Grimm and Harmon filed for Chapter 13 bankruptcy, which placed a stay on all civil claims against them and allows the couple to restructure their debt.
Utility district lawyer Evers filed a motion with the bankruptcy court to block the couple’s Chapter 13 filing. In his deposition, Evers wrote that Grimm lied about his amount of debt and assets on his bankruptcy petition.
Evers asked the court to move the couple into less-desirable Chapter 7 – which will probably force the couple to liquidate their assets – or dismiss the bankruptcy filing. If Grimm is sentenced to $384,000 restitution, it will put the couple over the $290,525 unsecured debt limit in Chapter 13.
Grimm and Harmon have submitted a debt restructure plan to the Chapter 13 trustee and will submit a deposition to the United States Bankruptcy Court in Sacramento on Oct. 16.
The future of Donner Summit PUD
Although there is some resolution in Grimm’s criminal charges, one question – Where did the money go? – still remains. The utility district also faces the challenge of restoring community confidence.
Since the criminal investigation began, the DSPUD board – which oversees the general manager – says it has put in place procedures and systems to be sure it doesn’t happen again. Also, during the criminal investigation, Harmon resigned from the board.
“The board realized how we’d been duped, so we brought in an outside accounting person with good accounting principles,” board President Dale Verner told the Sierra Sun last month.
DSPUD General Manager Skjelstad said Grimm’s conviction should restore some of the community’s faith.
“We always maintained [Grimm’s] guilt, and our assertiveness and persistence has paid off,” Skjelstad said. “We took it not only as a duty to the district but also a duty to the citizenry to see this through.”
Grimm will be sentenced Nov. 25 at 1:30 p.m. in the Nevada County Superior Court Truckee division.
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