Rowland Mosser, 64, and and Jayne Mosser, 61, returned to Judge Richard Martin's court on Tuesday for the hearing, the first day of which was held on Jan. 21, as Lake County News reported.
Defense attorneys Judy Conard and Mitchell Hauptman are representing Rowland and Jayne Mosser, respectively.
Rowland Mosser, who was executive director of the Lucerne Alpine Senior Center from July 2002 to August 2005, was arrested last April on four felony charges – embezzlement, grand theft by an employee, grand theft and keeping a false record of government funds.
Jayne Mosser was arrested at the same time on a felony count of committing grand theft.
The case against them alleges that the activities for which the Mossers are charged occurred between Jan. 1, 2005, and Aug. 12, 2005.
Deputy District Attorney Gary Luck recalled Investigator Ron Larsen of the Lake County District Attorney's Office to the stand on Tuesday. Larsen has been the primary witness in the preliminary hearing thus far.
Luck had Larsen explain several documents that were submitted as exhibits in the case.
Some of the documents included Pacific Gas and Electric and Mediacom bills, the service address for which was the Mossers' Sixth Avenue home in Lucerne, but which allegedly had been paid for by the center. Larsen found the documents during his investigation at the center.
Larsen interviewed Aura Thomas, who had acted as the center's bookkeeper for a time during Rowland Mosser's tenure as executive director. The bills, as they were presented by Luck to the court, had a cover sheet that Thomas created to denote a cash reimbursement.
As Larsen explained it, Thomas had stated that Jayne Mosser would use senior center money to make purchases for items for the center. She would then submit the receipts to Thomas and request a reimbursement.
Thomas told Larsen that she allegedly was instructed by Rowland Mosser to issue senior center checks to reimburse Jayne Mosser for the expenditures – which, again, had been paid for by senior center funds in the first place.
Rowland Mosser allegedly told Thomas that the checks would not be cashed but would be used to track the senior center's funds, according to Larsen's statements on the stand.
Another exhibit, which included a $218.79 invoice from Ukiah Paper Co., showed two accompanying checks from the senior center to pay for the bill. That also allegedly was submitted to Thomas for reimbursement in May of 2005 by Jayne Mosser, as was a second payment to that company, paid for in August of 2005 with a Lucerne Alpine Senior Center cashier's check.
Perhaps the prosecution's most notable piece of evidence discussed Tuesday was that which was submitted as Exhibit 8. It included copies of 25 checks written on the senior center's account during 2005 to Jayne Mosser, allegedly for the purpose of reimbursement, Larsen said.
In all, the 25 checks totaled $6,673.31, and were mostly issued between January and April of 2005, Larsen said.
Larsen reiterated Thomas' statement that Rowland Mosser allegedly had said the checks were merely for tracking purposes. However, during questioning, Larsen explained that all of the checks had allegedly been endorsed by Jayne Mosser and cashed. He said they were processed through Lake Community Bank.
Larsen also gave testimony about his conversations with senior center volunteers, particularly the treasurer of the board of directors, who explained the revenue sources coming into the center during 2005. In addition to grant funding, the center held breakfasts and bingo games, rented rooms, catered luncheon meetings for community groups, held silent auctions and special fundraisers like that year's duck race, and received donations.
Center had problem with back taxes, investigator says
Luck questioned Larsen about his interviews with former center board president Jim Swatts, who took over running the center after Rowland Mosser left in August of 2005.
Swatts had to deal with tax levies from the Internal Revenue Service and the state Franchise Tax Board, Larsen testified.
During his negotiations with federal and state authorities, Swatts authorized several payments to the IRS for back taxes, from a $5,000 payment in August of 2005, monthly payments totaling $4,496 and a negotiated settlement for $33,865, Larsen testified.
Those tax payments, said Larsen, were based on back taxes, plus interest and penalties, that the senior center owed over several years before Swatts came to the center, according to his discussion with an IRS official.
Luck asked Larsen if the IRS official had indicated a specific time frame for the unpaid taxes. He said no, that the official indicated it was a period of several years that the taxes were not paid and the center hadn't filed a tax return. Although the center is a nonprofit, failure to file the return results in fines.
Conard objected to that statement and moved to have the statement stricken from the record. Judge Martin sustained the objection, saying without having the time period specified the statement was meaningless.
Larsen then testified about the work of certified public accountant Diane Plante, who was asked by Swatts to assist in sorting out the center's finances in late 2005.
Plante, Larsen testified, helped recreate several previous years of the center's record keeping. An auditor for local nonprofits and governmental agencies, Plante also is a professional advisor on the QuickBooks program, which she used to look at a specific cash account belonging to the center.
According to Plante's assessment, that cash account should have had more than $60,000 in cash in it based on the center's records, Larsen said.
Defense attorney focuses on audits, levies and impacts on accounts
During cross-examination, Conard questioned Larsen about the possible impacts of the center's tax levies on that cash account..
She also asked if the center's books were ever audited from 2002 to 2005. Larsen said there was one audit covering a two-year period completed by another local certified public accountant, Joan Sturges.
Conard asked Larsen if Sturges gave the center “a clean bill of health” following that audit.
“My interpretation was slightly different than that,” he said.
She asked if the center board received the audit; yes, Larsen replied. Did the audit refer to that cash account which Plante had examined? Larsen said he wasn't aware that it did.
Conard further questioned Larsen about when that cash account was created. He said it may have been set up late in 2004 or early in 2005. Was that at the time the center's accounts were levied, Conard asked? Larsen replied that it was shortly prior to the levies.
He said he didn't know if the account was created close to the time the audit was conducted, and that he hadn't spoken to Sturges, although Plante did.
In response to Conard's question about whether or not Sturges prepared the center's taxes, Larsen said he didn't know. He also couldn't tell Conard how many times the center had been audited in the previous 10 years, or if they were required to have audits because they received government funds.
The audit was conducted at around the time the center's bank accounts were levied, Larsen said.
The senior center receives funds from the state, and has many bank accounts, with restricted accounts set up for the Meals on Wheels program, said Larsen.
At one point, the center began operating on a cash basis because levies were taking the money out of the bank accounts, said Larsen. That resulted in the center making payments with cash, cashier's checks or money orders.
Conard asked if those cash payments were reflected in the cash account that Plante had examined. Larsen said he didn't believe so, as he didn't recall seeing them listed there. Larsen said he also couldn't tell Conard the total amount of money the center was receiving at that time, because there are no records. However, the deposits made showed there should have been more than $60,000 in the cash account.
Recalling testimony Larsen gave on Jan. 21, Conard asked about large checks the center received, and referred to one situation in which former center board member Marilyn Johnson told Larsen she saw Mosser at a local bank in mid-2005. He allegedly was there with several employees, and cashed a $15,000 check to the center, paid the employees and left with the rest of the money, according to Johnson's statements.
Conard asked if that check was reflected in any of the center's accounts. Larsen said no. Conard asked if he checked the senior center's accounts to see if the check showed up on a bank statement. Larsen said he did look, but didn't find that check.
The preliminary hearing will continue at 8:30 a.m. Wednesday.
E-mail Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it..
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