A 53-year-old former chief financial officer accused of stealing $1.1 million from a Merced concrete company has pleaded no contest to a felony embezzlement charge.
Stockton resident Ajay Chandra will be sentenced to four years, four months in prison as part of a plea agreement reached between attorneys in Merced County Superior Court on Tuesday.
He was arrested June 6, 2007, by Merced County sheriff's deputies for embezzling money from Central Valley Concrete and Trucking between September 2005 and May 2007. While working as Central Valley Concrete and Trucking's CFO, Chandra deposited checks from the company into a personal checking account at the Bank of Stockton, according to Deputy District Attorney Walter Wall.
Investigators located about $880,000 of the stolen funds in Chandra's Bank of Stockton account. Chandra also pledged the title to a rental home to help pay for the remaining embezzled funds. Wall said most of the embezzled funds are expected to be returned to Central Valley Concrete. "I think it's a very good resolution all around," Wall said.
C. Logan McKechnie, Chandra's attorney, said his client confessed to the crime and has expressed "tons" of remorse, particularly for violating the trust of the company's owners. "He feels extremely bad about it," McKechnie said.
According to Wall, Chandra would create the checks himself, making them payable to insurance companies before endorsing and depositing them into his account. Wall said Chandra made more than 20 such deposits, some in increments of $50,000 to $60,000 and more, until a teller at the bank questioned his authority to deposit a check into his personal account.
Central Valley Concrete was notified about the unusual bank activity, Wall said.
Scott Neal, co-owner of Central Valley Concrete and Trucking, said his company was already conducting an audit when the bank called him.
After learning the deposit wasn't an isolated incident, company officials contacted law enforcement. Chandra was questioned and taken into custody, giving a videotaped confession acknowledging that he committed the crime, Wall said. "He knew what he was doing was wrong," Wall said.
Still, Wall said Chandra never gave a motive for the crime.
While Neal is glad his company will recoup most of the $1.1 million, he said Chandra's crimes have still caused his company immeasurable losses. "The loss of the funds has cost employees their jobs and compensation in other ways, whether it be pension funds or bonuses," Neal said.
Neal remains upset that Bank of Stockton allowed Chandra to make the deposits. "(The bank) accepted and put the funds in his personal accounts," Neal said. "The Bank of Stockton has been unprofessional and absolutely no help through this whole process. While Ajay committed the crime, it was facilitated by Bank of Stockton."
Calls to Arthur Small, an attorney representing Bank of Stockton, weren't returned at press time. A call was also placed to the office of Douglass Eberhardt, president of Bank of Stockton. An assistant for Eberhardt said he had no comment about the case.
A court hearing will be held Sept. 22 to determine how much credit for jail time served can be applied to Chandra's prison sentence. McKechnie said Chandra has about 30 days credit.
The felony embezzlement charge also included an enhancement, due to the large amount of money Chandra stole.
The crime doesn't count as a strike, Wall said, and Chandra could be released on parole after serving 50 percent of his sentence.
Reporter Victor A. Patton can be reached at (209) 385-2431 or vpatton@mercedsun-star.com.
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