SACRAMENTO, Calif. (CN) - A Sacramento Public Library official and two others accused of defrauding the library system of $780,000 were properly convicted of grand theft and embezzlement, a state appeals court ruled Thursday.
The panel from the Third Appellate District agreed with a lower court that Dennis Nilsson, former facilities superintendent for the library, contracted work to another employee's family business for several years in a six-figure scheme intended to defraud Sacramento County taxpayers.
Nilsson received kickbacks for handing out contracts to defendant James Earle Mayle and other handymen and encouraged them to drastically overbill the library. The library did not have a policy requiring bids for maintenance services and Nilsson used three separate contractors in his scheme between 2004 to 2007.
"In other words, defendants marked up the invoices received from the outside contractors by approximately 138.9 percent and kept $781,390.79. Most businesses have a profit of seven to 10 percent," acting Presiding Judge George Nicholson wrote for the three-judge panel.
Nilsson, Mayle and his wife Janie Rankins-Mayle were convicted by two separate juries in late 2011 and Nilsson was sentenced to more than 14 years in prison. Mayle and Rankins-Mayle were given a white-collar sentence enhancement for their role in Nilsson's scam.
While the panel upheld the grand theft, embezzlement and conflict-of-interest counts, it struck the white-collar enhancements given to the Mayles. The panel ruled the additional two-year punishment was unjust "because the prosecution did not plead and prove that the grand theft and the bribery were related felonies," and that the prosecution didn't properly inform the couple of the enhanced charges.
Meanwhile, white-collar enhancements were upheld against Nilsson.
The panel did rule in favor of Nilsson's motion that he was wrongfully convicted on two counts of grand theft. Nilsson's first grand theft conviction was struck by the panel and his case remanded for sentencing.
"We must strike one count of grand theft because the law applicable at the time he committed his crimes permitted only one grand theft conviction for multiple takings done pursuant to a single overarching scheme," the panel wrote.
According to investigators, the fraudsters submitted more than $1.3 million in charges to the library and used the additional cash on vacations and cars. The library first recognized the scheme in 2008 during the height of the financial collapse and has since improved its auditing and vendor policies.
In 2013, a judge approved a restitution payment of $480,000 to the library, with most of the funds coming from a house owned by Nilsson.