One of the longest and costliest cases in Fresno County history ended Wednesday when two founders of a nonprofit agency admitted to embezzling money meant for abused and neglected children.
With their pleas, Elaine Bernard, the chief executive officer of the child-welfare organization Genesis, and her sister, Carol Dela Torre, the nonprofit's clinical director, likely will spend time in jail and lose their social-worker licenses, lawyers said.
Their attorneys said Bernard wiped tears from her eyes as she pleaded no contest in Fresno County Superior Court to two felony charges -- theft by embezzlement and tax evasion. Dela Torre, appearing stoic, pleaded no contest to a misdemeanor charge of theft by embezzlement.
A no-contest plea is equivalent to a guilty plea in criminal proceedings.
Judge John Vogt told them to be prepared for jail when they are sentenced Aug. 4.
"He essentially said, 'Bring your toothbrush,' " said Bernard's lawyer, Douglas Foster.
The plea agreement essentially ends the 61/2-year-old case and puts the brakes on what was sizing up to be another long, costly trial, requiring dozens of witnesses and enough exhibits to fill a room.
District Attorney Elizabeth Egan had spared no expense in prosecuting the defendants. But in the end, Egan backed down on her demand that Bernard, 48, and Dela Torre, 47, be sentenced to state prison time.
The deal was carved out on Tuesday. Defendants and lawyers for both sides were in the second day of pretrial hearings when Assistant District Attorney Jon Skiles came to the courtroom to discuss plea deals.
In the judge's chambers, both sides agreed to let Vogt determine whether the sisters should go to prison. Vogt said they wouldn't do time in prison but might be sentenced to county jail time, Skiles said.
In court Wednesday, Bernard shook Skiles' hand.
"Thank you for showing mercy," she told him.
"I'm glad we were able to work things out," Skiles replied.
Court records show that Bernard has repaid Genesis $132,434 and Dela Torre repaid $48,533 for using Genesis credit cards and bank checks for their own use.
As part of the plea deal, Bernard will pay an additional $100,000 in restitution to Genesis and about $7,000 to the state Franchise Tax Board, which investigated the tax charges. Vogt also could fine her up to $20,000 for the two felony counts when she is sentenced.
Dela Torre does not have to pay additional restitution but faces a fine up to $1,000.
Bernard makes $155,000 a year, and Dela Torre earns $145,000.
Bernard declined to discuss the plea deal. But Foster said she was satisfied because it didn't include prison time.
"She admitted to criminal wrongdoing," Foster said. "She wants to put this behind her. But her life will never be the same as it was before."
Dela Torre also declined to comment. Her lawyer, W. Scott Quinlan, said: "She feels it is a good result."
Because of the pleas, the sisters face the grim prospect of losing their state license to run the business, which provides services to foster children, their lawyers said.
Quinlan said a felony or misdemeanor conviction would put their social-worker licenses in jeopardy.
Dela Torre, however, has a better chance of regaining her license because she pleaded to a misdemeanor, Quinlan said.
The case against them began in late 2001 when two former employees told authorities that money earmarked for abused and neglected children was being used to finance the defendants' shopping sprees and vacations.
The Genesis case, however, turned out to be one of the most complex investigations in Fresno's history, with documents filling 500 boxes.
After a lengthy investigation, prosecutors Michael Elder and Regina Leary determined that Bernard and Dela Torre embezzled more than $500,000 of Genesis money between 1996 and 2001, but they never could prove that amount.
The first trial ended in a mistrial in May 2007 when 11 out of 12 jurors said they were guilty of a 16-count indictment that charged them with theft, tax evasion and filing false state income taxes. To reach a verdict, all 12 jurors must vote for guilt or innocence.
Foster said he planned in the second trial to attack the prosecution for spending "a ton of money on the case." He filed a public-records request to learn how much money has been spent by prosecutors, but the only document made public, so far, was a bill for $220,000 from Stuart Harden, a certified fraud examiner and key prosecution witness.
Quinlan and Foster said it would have been difficult for the prosecution to get a conviction because Bernard, as chief executive officer, had authorized the use of the Genesis credit cards and checks. The Genesis board of directors also has consistently supported them, the lawyers said.
"Elaine has admitted to making mistakes in running the business," Foster said. "She never thought her actions would amount to criminal conduct."
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