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Ex-Comptroller Claims Water Authority Fraud

LAS VEGAS (CN) - The Southern Nevada Water Authority fired its comptroller for refusing to falsify reports to make it look like seven of its ranches were turning small profits rather than large losses, the former official claims in court.

Randall Buie sued the Water Authority and Las Vegas Valley Water District on March 6 in Clark County Court.

The Water Authority paid $80 million to buy seven cattle ranches and their water rights in the Spring Valley area in 2007 and 2008, Buie says. It bought the ranches to use their water rights for fast-growing Las Vegas, Buie says, but they became instant money-losers and lost $2 million annually.

"From the moment they were purchased, said ranches have been unprofitable, contrary to representations by defendants to the board of directors, ratepayers, and the media," Buie says in the complaint.

The $80 million outlay brought media scrutiny, and Buie says he was forced to create reports that were "false and fabricated to deceive the media and the public in order to frustrate any further investigation into the ranches."

He claims that from 2010 to 2014 he was "harassed and bullied into assisting in creating special ranch reports" that the defendants "materially altered" to show that the ranches were generating annual profits.

"Rather than report these ranches as losses, defendants instructed plaintiff to alter the accounting for these ranches to show an annual profit and presented these false audits to the SNWA board," the complaint states.

He claims that in 2009 his boss, deputy general manager Dick Wimmer, told him to prepare a "Special Ranch Report" for the media and "misrepresented" to him that CFO Carey Casey, Buie's immediate superior, had approved creation of the special report. The report was to include an accounting of the ranches for 2008, the projected estimate for 2009 and the anticipated budget for 2010.

Neither Wimmer nor Casey are parties to the lawsuit.

Buie says that Casey had him "subsequently prepare a true and correct accounting statement reflecting a loss from operating the ranches."

He claims that Wimmer, who was his boss and Casey's, and Brandon Humphries, manager for all central and southern Nevada ranch operations, "were unwilling to reveal a loss from the ranches and initiated a false line by line expense analysis reflecting lower expenses experienced by the ranches."

"These alterations were made in order to conceal the true, continuous losses from the ranches and manufacture a false profit from the ranch operations," according to the complaint.

Humphries is not a party to the complaint.

After adjusting the expenses, Buie says, the report showed a $5,000 annual profit.

He claims the false report was made without the knowledge of then-CFO Casey, and was supposed to happen only once. But he says another falsely prepared report was made and presented to the water authority's board during its January 2010 meeting. That report eliminated the cost of sales from the ranches and reduced the depreciation value on farm equipment to show a profit, Buie claims.

Buie says against his protests, deputy general managers Zane Marshall and Rick Holmes had him continue producing false reports on a monthly basis and told him that any concerns would be resolved by the authority's legal department.

Neither Marshall nor Holmes are named as defendants.

In 2012, Buie says, he told his bosses the doctored reports were "illegal and fraudulent" and he no longer would report anything other than the raw financial data on the ranches.

A year later, Buie says, he was told he was no longer was needed as comptroller and was given the choice of being demoted or retiring. He retired in March 2014.

He accuses the defendants of fraud, breach of contract, breach of faith, retaliation, constructive discharge, wrongful termination, breach of contract and negligent and intentional infliction of emotional distress.

He seeks compensatory and punitive damages, attorney's fees and costs.

Southern Nevada Water Authority spokesman Bronson Mack said his agency had not yet been served with the lawsuit. "We do take these claims very seriously," he said.

Buie is represented by Matthew Callister.

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