Former city employee Laurie Smith will be seen in the Alameda County Superior Court in Hayward July 24 on a felony embezzlement charge of allegedly stealing city funds. She is currently being held at Santa Rita County Jail without bail.
Smith, an accounting assistant, was arrested May 4 for allegedly embezzling approximately $77,000 from city coffers over a four-year period, police said. Police first started investigating the case in December after a $1,500 check received by the city and deposited into the city bank account had not been properly credited to the Fire Department. The city’s finance department conducted an audit, which identified a “lapping scheme.” Smith admitted to stealing cash from the city’s bank deposits and was terminated based on that admission, police said. Police did not arrest Smith at the time because they wanted to fully uncover the extent of the embezzlement before proceeding.
“This is highly unusual in city government,” said Sergeant Craig Eicher. “We notice it a lot more in private industry. I think it’s because in government there is generally more oversight so these things are generally caught, but with the method she was using, it was so complex, that it was difficult to determine what was going on.”
“Lapping” is a term used to describe the embezzlement method where an employee receives a customer’s payment and takes the money instead of applying it to the customer’s account. To cover the theft, the employee takes another customer’s payment and applies it to the first account, continually repeating the process.
Smith has yet to enter a plea. The city is seeking restitution for the embezzled $77,000.
–Rebecca Guyon
