Ex-city accountant held in alleged scheme
68 felony charges including embezzlement, grand theft, unauthorized computer access
CUPERTINO >> For more than a decade, authorities say, a former longtime city accountant used an elaborate fake vendor scheme to embezzle nearly $800,000 from the city.
On Wednesday, three years after she retired, Jennifer “Yuen-Cheng” Chang, 66, of Cupertino, was arrested and booked on $3 million bail based on 68 felony charges encompassing embezzlement, grand theft, and unauthorized computer access and fraud, according to the Santa Clara County Sheriff’s Office.
“Ensuring fiscal integrity is paramount and has been my highest internal priority,” Mayor Darcy Paul said in a statement Wednesday. “This person’s alleged actions are unacceptable and disappointing. We are working to ensure that we have the highest safeguards against fiscal corruption.”
According to investigators and city officials, Chang worked in Cupertino’s finance division and took advantage of “an old and outdated financial system to devise a scheme that circumvented internal controls.” She allegedly created phony vendors and drafted city checks to pay them for nonexistent services or goods.
Chang, who retired in 2015 after 18 years with the city, is accused of paying out $791,494 to her fictitious vendors between 2000 and 2014. The paper trail reportedly ended in September 2014, a few months before the city upgraded its financial tracking system and shored up internal controls, according to the city. Chang retired the following year.
A forensic audit of questionable accounts launched earlier this year discovered numerous checks “debited against a liability account and deemed suspicious due to their nature, size, and lack of supporting documentation,” according to
a city news release. In April, city officials alerted the Sheriff’s Office, which provides police services in Cupertino, to the alleged scheme. At the time of Chang’s arrest, no other people were implicated in the theft. “I am very appreciative of the efforts of our current finance division employees who uncovered this scheme,” Interim City Manager Amy Chan said in a statement. “When they noticed these discrepancies, they immediately notified the authorities. We now have an updated financial system and new finance management team that have created stricter controls and more oversight.”
Officials added that the city will try to recover as much of the lost money as it can.
“The city of Cupertino will seek full restitution from Ms. Chang through upcoming criminal and civil proceedings,” a city statement reads.