Preliminary hearing is more bad news for
Published: November 16, 2012
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
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?”
“That’s correct,” Hardee responded.
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.
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.