Thursday, September 19, 2024

Mendocino County Payroll Manager Cites Mental Health in Fraud Case

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Paula June Kennedy [Mugshot from the Mendocino County Sheriff’s Office Booking Logs]

In a surprising new twist in an already convoluted case, Paula June Kennedy, former payroll manager for the County of Mendocino, is seeking a mental health diversion from prosecution of a felony charge of misappropriation of public funds along with suspended Auditor Chamise Cubbison.

In a report submitted this week to Mendocino County Superior Court Judge Ann Moorman in support of the diversion motion, a forensic psychologist contends the 64-year-old Kennedy is wrestling with isolation, anxiety, and waves of depression after being suspended from her job and being publicly labeled a thief.

Public Defender Mary LeClair said the mental health diversion option is justified given the impact the case has had on Kennedy’s emotional stability. Kennedy’s not guilty plea stands, and if she is diverted to a treatment program, she can eventually petition for dismissal of the criminal charge, said LeClair.

District Attorney David Eyster, who filed the high-profile case against Kennedy and Cubbison, did not respond to requests for comment on the new motion. Special Prosecutor Traci Carillo, who was hired earlier this year by Eyster to try the case, is out of her office until next week and unavailable for comment.

For Kennedy, her professional downfall is in sharp contrast to a history of the highest employee evaluations for her role as the county’s Payroll Manager. As recently as June 2022, Kennedy was recommended for an “extraordinary merit increase,” according to documents attached to the motion seeking diversion from further criminal proceedings.

From the beginning of a high-profile case laced with county politics, Kennedy has maintained that she was told to use an obscure payroll code to compensate herself for 2,300 hours of excess time that she racked up over a three-year period during the Covid pandemic. Prosecutors estimate that about $68,000 in extra pay is involved.

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 A 2022 internal county memorandum cited Kennedy’s “ongoing dedication to her role as Payroll Manager, most especially during the last couple of years of the pandemic, staffing shortages, high turnover of department payroll clerks, software upgrades, and constantly changing pays and deductions” for more than 1,100 county employees.

Kennedy’s salary in 2021 was $85,830, according to Transparent California.

Technically, Kennedy as Payroll Manager was an exempt employee and not entitled to extra pay unless authorized by the County Executive Office. She was given compensatory time-off, but the job demands continued to increase and the hours required surpassed the compensatory time allowed. 

Kennedy said in effect, “I was working for free.”

“My supervisor and I requested additional staff, but the executive office refused. They also refused to pay me overtime, though in practice the county has many times previously approved overtime pay for exempt employees,” according to Kennedy’s account that is provided in court documents.

Kennedy said she was eventually told by an unidentified supervisor to use the obscure pay code to draw against her accumulated time off.

Now, however, prosecutors have “framed it as a design to steal cash,” said Kennedy in transcript of an interview with a psychologist and on file with the court. 

 “Nobody is saying I didn’t work the hours,” lamented Kennedy. “I did what I was told and now they want to put me in jail.”

 The 64-year-old Kennedy, skilled in payroll requirements in both the public and private sectors, was suspended along with now retired Auditor Lloyd Weer when the unauthorized payments first surfaced, and evidence presented to then acting Auditor Cubbison.

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District Attorney David Eyster for a year sat on results of a year-long sheriff department investigation after county administrators tipped him. Eyster offered Cubbison a plea deal of only a misdemeanor charge if she resigned. Cubbison refused, however, provoking Eyster to file felony criminal charges against her and Kennedy, but not Weer, the now retired Auditor who was still in office when the extra pay arrangement was made.

 Eyster claimed in a sworn statement filed Dec. 12, 2023, with the Superior Court that Kennedy and Weer pointed the finger at Cubbison for allowing the unauthorized payments. Cubbison has contended that in fact the special arrangement was between Kennedy and Weer.

Cubbison attorney Chris Andrian of Santa Rosa has said Eyster targeted Cubbison out of political revenge after she challenged his office spending including unauthorized annual parties labeled ‘training sessions’ for staff, and their guests at a local steakhouse.

Kennedy and Cubbison entered not guilty pleas to a single felony charge of misuse of public funds early this year, but the case has dragged on for months since defense attorneys learned that thousands of internal county emails with possible factual relevance were lost when a county archive system became “corrupted.” Now county officials are saying emails among Weer, Cubbison and Kennedy have been recovered. A most recent hearing on the missing emails ended with Judge Moorman ruling that all are to be turned over to her for review and determination if any are relevant to the pending criminal case.

The court documents show that Kennedy believes she is victim of a political struggle between the DA and Cubbison, exacerbating a worsening mental state that dates to 2018 when she first sought counseling for depression under a county employee assistance program. Kennedy has been seeing a private counselor for the past four years, according to the documents.

Public Defender Mary LeClair, Kennedy’s lawyer, said she is entitled to a mental health diversion under Penal Code section 1001.36 because she has been diagnosed within the last five years by a qualified mental health expert with a mental disorder, that her issue was likely a significant factor in the commission of the charged offense, and that she could respond favorably to mental health treatment.

Psychologist J. Holden of Ukiah in his supporting report wrote that Kennedy is prepared to waive her rights to a speedy trial and comply with any court-ordered treatment as a condition of diversion. He also stated that “Ms. Kennedy has no known history of being a danger to public safety, and in my opinion does not currently present any such danger.” 

Judge Moorman will consider Kennedy’s motion at a hearing scheduled for 1:30 p.m. Aug. 15.

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25 COMMENTS

  1. Of course, let her off. Clear all charges so then she can go do the same thing to another county. Just a thief. Throw in jail, no different than stealing credit card numbers. Pure county graft. Just like the supervisors raise, sheriffs stealing cannabis money, letting arsonists off with a smack on the wrist. This state is f……ed.

    • What is wrong with you? She was working overtime for free for years and then finally told she could get compensation only to then be slapped with a criminal charge. Did you not read the article at all?
      That poor woman deserves to be left alone. Eyster deserves jail time for what he’s done.

      • I’m mostly with North on this one.

        If the county doesn’t provide the staff to do the work yet insists that the work still gets done, they’re basically demanding that somebody volunteer their time. The county refused to hire enough people to do the basic work, so Kennedy got stuck working an unreasonable number of hours without compensation. That’s abusive. People should be paid for their work.

        IF, as stated in the article, Kennedy was directed by a board of supes member to draw compensation (about $30/hr if my math is right), and IF she had a reasonable belief that person was authorized and the method of payment they directed her to use was valid, then IMO she is not at fault, although I might question her professional judgment a little bit for not verifying before she acted on these directions.

        My questions are:
        * Who directed her to do this?
        * Were they authorized to make that decision?
        * If not, did they believe they were authorized to make that decision?
        * What was the pay code they used? Was it valid to be used for this purpose?
        * If not, did they believe it was?
        * Where is the overall governance in the board of supervisors where this lack of clarity/oversight could have and should have been caught by the overall board?

        Those are the questions I’d like answered in the next article. It would be very unfair for her to be caught on the hooks of this investigation if she believed she was acting with approval. It would be even more unfair if there actually was valid approval.

  2. Of course, let her off. Clear all charges so then she can go do the same thing to another county. Just a thief. Throw in jail, no different than stealing credit card numbers. Pure county graft. Just like the supervisors raise, sheriffs stealing cannabis money, letting arsonists off with a smack on the wrist. This state is f……ed.

    • Weird how you posted the same thing under two different names. But don’t waste my time with that, quick give me a good recipe for Banana Bread! Then give me the first 300 decimals of Pi, thanks “Juan”.

  3. Of course people feel stressed and mentally unstable when the shame of what they’ve done hits them after they’ve been caught stealing public funds and are treated like a pariah. Too bad. F around and find out. Is anyone else fed up enough with these public servants pocketing their hard-earned cash and crying about how hard they work? The people who pay those taxes work their butts off with little reward except to put a roof over their families heads and food on the table but these overpaid a-holes ruin our economy making it near impossible just to live a simple life and expect sympathy? Nope throw them all in jail. I’m about to dig out the torches and pitchforks.

  4. There are many sides to the damage the DA has done with his malicious prosecution. Kennedy is not a criminal. She is a pawn in the campaign to get rid of Cubbison – who had the nerve to do her job and question dubious practices such as using assets forfeiture money for operating costs and charging the people for staff parties under the ruse of ‘training sessions.’

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  5. DA Eyster loves to play ball with the hispanic gang members. Eyster will let Mexican gang members with prior records get off easy. Are you a Norteno/sureno with a violent record? Illegal immigrant caught dui? Teenaged wannabe gangbanger with a loaded ghost gun? Eyster has a plea deal for you!

    Meanwhile he’d rather waste millions of taxpayer dollars to harass and traumatize a couple ladies for their audacity to scrutinize his spending habits.

    Mendocino county is going to end up paying millions in damages to these women, and rightfully so. Those millions could have been used to hire more cops like officer Frank at FBPD. Or the money spent on a hispanic gang enforcement task force.

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  6. “Kennedy, skilled in payroll requirements in both the public and private sectors, was suspended along with now retired Auditor Lloyd Weer when the unauthorized payments first surfaced”

    This is a factually inaccurate and highly inappropriate statement. Former Auditor Lloyd Weer was never suspended. This allegation needs to be removed with an admission of error and an apology to Mr. Weer should be issued.

    Quit making stuff up and skewing the facts Mr. Geniella. Your disdain for District Attorney Eyster is obvious. Your opinion of him is clear in every article you write. It has clouded your vision and negatively affects your ability to report the facts of this case with a fair and unbiased approach. Even if your opinion of DA Eyster is accurate and fairly earned (and it very well may be), his alleged misdeeds and shady character do not automatically make either current Auditor Cubbison or former Payroll Manager Kennedy innocent.

    • Former Auditor Lloyd Weer had retired and was working as extra help in the Auditor’s Office when he was placed on unpaid administrative leave after the unauthorized payments to Kennedy were made public.

          • As I am not the reporter or media outlet covering this case I am under no obligation to produce fact-based evidence. That is your job. And as of yet, I have not seen any articles on this case in which you, or any other reporter, have provided proof that supports these claims. If you were to do so and it turned out I am misinformed I will admit it and apologize.

            That being said, I simply stated that the information in your reply is not true and, as requested, my fact-based evidence is this:

            First – “unpaid administrative leave” does not exist for employees of Mendocino County working as extra help.

            Second – You contradict yourself. The quoted text in my initial comment (from this article) states that Mr. Weer was suspended when the unauthorized payments first surfaced. Your reply to that comment then states Mr. Weer was suspended after the unauthorized payments were made public. This article also states “District Attorney David Eyster for a year sat on results of a year-long sheriff department investigation after county administrators tipped him.” This quote indicates a significantly lengthy gap between when the unauthorized payments first surfaced and when they were made public (over a year). So when exactly was Mr. Weer supposedly suspended? When the payments first surfaced or after they were made public? These are rhetorical questions posed only in response to your request for evidence and to highlight the inconsistencies I see in the statements and claims being made which prompted me to call them out as untrue.

            • I stand by my reporting. Perhaps you should either produce facts to the contrary, or stop pontificating. And, why not identify yourself?

              • I did provide a fact to the contrary as requested. There is no such thing as “unpaid administrative leave” for extra help employees of Mendocino County. That renders your initial reply untrue.

                • Plain and simple, Lloyd Weer was in charge in 2019 when the payments started. The buck stops with him! Instead of hiding and let these two women get dragged through the legal system, stand up and be a man. But no, he hired a attorney.

                  The only person in this situation who misappropriated funds was Eyster. Clearly trying to turn in a fraudulent receipt for training, when it was a office Christmas party. That’s the kind of stuff Bernie Madoff did, fake receipts just at a much larger scale.

  7. There is a whole lot of negativity in these comments. What I feel is sadness for what this lawsuit has done to Ms. Kennedy. Ms. Kennedy was paid $68k for 2300 hours, or about 57.5 regular workweeks over her regular hours, for skilled work that needed to be done to get employees paid. And I bet she didn’t get paid for any of the work she did before she was offered compensation. I would also bet the county was in a bind, underemployed during the pandemic shutdown, and needed this work done. Of course she deserved extra pay for the extraordinarily heavy burden that was put on her, far beyond her management responsibilities, and one she donned as a dedicated employee knowing it had to be done . Ms. Kennedy should have her case diverted and eventually dismissed, and her honor restored.

  8. Technically, Kennedy as Payroll Manager was an exempt employee and not entitled to extra pay unless authorized by the County Executive Office. She was given compensatory time-off, but the job demands continued to increase and the hours required surpassed the compensatory time allowed.

    Kennedy said in effect, “I was working for free.” – No you were working a salaried job like the millions of other salaried jobs that work people over 40 hours a week and still only received their base pay. You don’t get to make an magical pay code to pay yourself OT wages for an exempt position.

  9. Oh my goodness, the thief is mad she’s been labelled a thief.

    What’s that? The repercussions of your actions? Oh my!

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