FORMER COUNTY water director Stephen Collins’ troubles go far beyond a possible conflict of interest over his participation in developing a new water supply for the Monterey Peninsula.

According to testimony this week in a Salinas courtroom, Collins committed fraud against a former employer by submitting invoices for meetings he never actually attended — even asking to be paid $75 an hour for a meeting in Salinas that happened while he was in Washington, D.C. — according to testimony by a Monterey County District Attorney’s Office investigator Thursday.

During Collins’ preliminary hearing, investigator Heather Hardee outlined the prosecution’s case against Collins, who faces charges of more than 30 felonies and misdemeanors, mostly related to phony bills for consulting services with Ocean Mist Farms, a Castroville artichoke grower.

In responding to questions from Monterey County Assistant District Attorney Stephanie Hulsey, Hardee  testified Thursday morning that Ocean Mist Farms’ CEO Ed Boutonnet told her he believed Collins was overbilling the company.

“He said that in 2006, when Mr. Collins went from a fixed contract to an hourly rate,” Hardee said, “that he had suspected Mr. Collins had been padding his log.”

Hardee outlined scores of invoices Collins submitted to Ocean Mist in which she said Collins billed the company for numerous meetings he never attended.

“There are a number of meetings you determined did not occur?” Hulsey asked.

“That’s correct,” Hardee responded.

Phantom meetings

According to Hulsey, Collins sometimes double- and tripled-billed. In March 2010, for instance, Collins billed for a Monterey County Board of Supervisors meeting when he was thousands of miles away doing business in another state on behalf of the Monterey County Water Resources Agency.

“Mr. Collins was billing Ocean Mist Farms for meetings in Salinas,” Hulsey said. “But we know that Mr. Collins also billed RMC for going to Washington, D.C., on March 9.”

Prosecutors also contend Collins was paid about $160,000 from RMC Water and Environment, the consulting company that won a $28 million contract to manage the now-defunct regional desalination project, even as he was lobbying for the plant to be approved and participating in meetings to decide whether it should be.

But most of the grand theft charges Collins is facing stem from his advisory work at Ocean Mist.
Collins’ work with Ocean Mist ceased in 2011 when the company stopped using his services.

But during an interview with Collins, Hardee said that he asked her to consider if the artichoke company was unhappy with him, why did Boutonnet give him a “bonus.” Collins also said Ocean Mist gave his nephew a job as a favor and issued Collins a “standing offer” to come back to work for the company.

But Hardee said the “bonus” was actually related to a $25,000 bridge loan Ocean Mist gave Collins in 2007 for an outside business deal he was involved in. Collins paid thousands of dollars back, but not the entire amount.

“Collins later said the bonus was the forgiveness of that debt,’” Hardee said.

Hardee also said Boutonnet told her that he did not give Collins a standing offer to come back to the company.

“He had no intention of Mr. Collins coming back as an employee based on what he found out about the fraudulent entries in the billings,” Hardee said.

Furthermore, Hardee said that Boutonnet didn’t even know Collins’ nephew, who had been offered a lower-level intern position by another Ocean Mist employee.

In cross examination Thursday afternoon, Collins’ attorney Michael Lawrence grilled Hardee in an effort to discredit the contention Collins fraudulently billed Ocean Mist.

The prosecution also presented in court numerous email exchanges between Collins and Boutonnet in which Collins justified his work for Ocean Mist — work that Boutonnet sought to keep to a maximum of 25 hours per week.

In some cases, according to Hulsey, when Collins exceeded the maximum number of work hours for the company, it was a result of billing the company for meetings that he didn’t attend.

In February 2006, after Boutonnet suspected Collins was over billing, he requested Collins provide more detail about the invoices he submitted the company.

Movie deal?

In an apparent effort to bolster the prosecution’s contention Collins is dishonest, Hardee pointed to another outside business deal she said Collins was involved with.

More than 10 years ago, Collins convinced Dale Huss, Ocean Mist’s vice president of operations, to invest $6,000 in a film Collins was interested in making, according to Hardee.

“He was approached by Mr. Collins to invest in this movie project that involved, like, Bollywood-type movies ... Indian movies,” Hardee said.

After giving Collins the money, Huss — who Hardee said “trusted” Collins — asked Collins several times about his investment and when he would see his money back.

“Mr. Collins would always come up with an excuse as to what was going on with the investment,” Hardee said.

Eventually, Huss came to the realization he wouldn’t get a return on his investment, Hardee said. 

“He felt it was Ponzi scheme, and he was never going to see his money,” she said.

The preliminary hearing is scheduled to resume Tuesday, Nov. 20.