Montebello seeks ‘missing’ bank accounts

Montebello officials said Wednesday night they are contacting every bank in their city and the “general vicinity” to make sure there are no other accounts with city funds that officials don’t know about and don’t have on their books.

The announcement came a day after the Los Angeles County district attorney’s office said it had opened an inquiry into two off-the-books bank accounts that city officials recently discovered, one at Union Bank and one at Banco Popular.

David Demerjian, deputy district attorney in charge of the public integrity unit, said the inquiry would help his office determine whether a criminal investigation was warranted.

At Wednesday’s council meeting, Montebello officials said they welcomed the inquiry. But many also said that after researching the matter furiously over the last few days, they were confident that no crime had been committed.

A more likely explanation, they said, is that city officials merely lost track of the bank accounts or believed they had been closed.

“This isn’t the city of Bell. That’s why we’re bringing this out,” said Mayor Art Barajas, who added that he had spoken with Dist. Atty. Steve Cooley and told him the city is “an open book.”

Still, council members stressed that they take the matter of missing money seriously.

Councilman Frank Gomez called it another sign that the city of 65,000 in southeastern Los Angeles County has “endemic problems.”

Other fiscal troubles include a looming budget crisis, with a projected deficit of at least $2 million, and a demand from the federal department of Housing and Urban Development that the city return $1.3 million that the agency says was improperly spent.

Then came news of the off-the-books accounts. Earlier this year, officials heard from Banco Popular, which informed Montebello that it was holding $240,000 in city funds and would be closing the account for lack of activity.

A few weeks later, an employee in the city finance department discovered a bank statement from Union Bank that showed an account that once held more than $1 million now had only $5,000.

In a report to council members Wednesday, City Atty. Arnold Alvarez-Glasman said officials still don’t know what happened to that money, but they are confident there was no “wrongdoing, misappropriation or criminal conduct” by any city officials.

They have been able to determine that the account was opened in 1999, although officials don’t know why or with what money.

On Nov. 1, 2000, $1,007,307.17 was taken out of the account in two wire transfers. Officials say they do not yet know where it went, or why. About $5,000 remained in the account, which has been slowly accruing interest ever since. Glasman speculated that officials lost track of the account at that point because they assumed it had been closed.

As for the account at Banco Popular, Glasman told council members he would have a full report Thursday but that it appeared it stemmed from a city loan to the Elks Lodge.

He also noted that employees in Montebello are not the only government officials ever to have lost track of funds.

A perusal of the state controller’s directory of unclaimed property shows that the city of Los Angeles, which is also facing a budget deficit, has more than 300 items of unclaimed financial property from companies or individuals, including several valued at more than $1,000. Los Angeles County has 158. And the Los Angeles Times is listed as having 14.

jessica.garrison@latimes.com

Times staff writer Richard Winton contributed to this report.