Bishop couple arrested last week on suspicion of embezzling $1.5 million, county faces questions

Last week’s arrest of a Bishop resident on charges of embezzling more than $1.5 million in public funds has raised just as many questions for taxpayers as investigators.

At the top of the list of questions seems to be how a county employee could have gotten away with the ongoing theft – as alleged – for as long as she did.

Dawndee Rossy, 46, and her husband, Ken Rossy, 43, were arrested by District Attorney’s Office investigators on Thursday for a total of 44 felonies related to their alleged embezzlement of taxpayer money from Dawndee’s work.

Dawndee Rossy, up until about early to mid-February, had been employed as a supervisor in the Inyo County Health and Human Services’ Public Assistance Program office. She is being accused of using her position to steal taxpayer money meant to assist the neediest of local residents and is suspected of doing so as far back as at least 2005.

Inyo County Health and Human Service Director Jean Turner said that as a supervisor in the Public Assistance Program, Rossy was responsible for “oversight of operations, personnel and program compliance.”

As far as oversight of the entire office, Turner said the HHS program is “on par” with other small-county departments, with “eight levels of existing oversight” in the local office.

The embezzlement, and Rossy’s potential role in it, were brought to light in mid-January when two employees – reportedly subordinates – went to higher-ups with concerns about discrepancies they had noticed. These discrepancies were reported to the Bishop Police Department, which launched an investigation Jan. 24 and identified Dawndee Rossy as a “person of interest” in the investigation on Jan. 25, the same day officers served a search warrant at the Rossy home.

Dawndee and Ken Rossy were scheduled to be arraigned in Superior Court on Friday on charges that include, for Dawndee, two counts of grand theft, 34 counts of identity theft, two counts of embezzlement, one count of possession of controlled substance, one count of welfare fraud and four counts of criminal conspiracy; and for Ken, one count of grand theft, one count of welfare fraud, four counts of criminal conspiracy and one count of possession of controlled substance.

Their arraignment was continued to today, at which time they are expected to answer to the charges.
But exactly how someone within the local HHS office was seemingly able to circumvent eight levels of oversight for eight years is a mystery.

D.A. Art Maillet said Monday he is investigating the criminal aspects of the case, and is not involved in the county’s efforts to ensure that the thefts can’t be repeated. But he is also wondering how the theft continued from 2005 to 2013.

“It is one of the questions I initially had,” Maillet said. “I know the (county) auditor has some controls and the state has some controls” over financial oversight of the office.

Turner said that the local HHS department “has a combination of in-house controls, the state and independent auditors” who track public funds to ensure they are not being misused. “We have a variety of sets of controls,” Turner said, adding that she is also waiting for the Rossys to have their day in court before releasing details about the case against Dawndee.

“One of the things I am doing is meeting with other counties, discussing our controls and sharing information,” Turner said. “We are always looking for ways to improve our services.”

Inyo County Auditor-Controller Leslie Chapman said she is working with the HHS Department to evaluate the oversight system and re-arrange job duties to ensure that employees and managers are checking and double checking work.

“We are changing up job duties and looking a different things to have cross checks,” Chapman said.

Chapman also said the county is currently in negotiations with a contractor to host a new employee fraud training class that will teach employees and managers “how to recognize when something is not quiet right and what should raise a flag with them. And hopefully employees will be comfortable stepping forward if they notice something is wrong."

Chapman said that training should be scheduled sometime within the next few weeks.

According to Maillet, a preliminary hearing for Ken Rossy is scheduled for next Tuesday. At that hearing, Maillet said, more information about the prosecution’s case may be made available, but, until that time, he does not want to give away too much information about the case.