Marina
In a significant breach of public trust, Daniel Paulino, the former police chief and city administrator of Velda City, Missouri, has been indicted on three counts of wire fraud.
Federal prosecutors allege that Paulino misappropriated over $313,000 from the city’s funds, exploiting his dual roles to facilitate the embezzlement.
This scandal has deeply impacted Velda City, a small municipality with a population of approximately 1,188 residents.
The Allegations
According to the indictment, Paulino’s fraudulent activities spanned several years and involved multiple schemes:
- Unauthorized Credit Card Charges: Paulino allegedly made approximately 828 personal charges on the city’s credit card, totaling about $145,428. These expenses included payments for a Caribbean vacation, personal car repairs, and pool supplies for his residence.
- Transfers to Personal Businesses: He is accused of conducting 17 unauthorized transactions amounting to $43,870, transferring city funds to businesses he owned or was associated with, such as R & B Towing, D & H Towing, and Renovations-STL, the latter registered under his spouse’s name.
- Issuance of Fraudulent Checks: Paulino allegedly issued eight city checks totaling $34,374 to third-party vendors for personal expenses. Notably, a $25,500 check was used to purchase a tow truck registered in his name and utilized by his towing company.
- Direct Deposits for Unperformed Work: The indictment states that Paulino authorized 20 direct deposits totaling $30,667 into his personal account, purportedly for additional payroll. Additionally, he facilitated 55 direct deposits amounting to $54,693 to his spouse for work in the public works division that was never performed.
- Attempted Concealment: To obscure his activities, Paulino transferred approximately $58,171 from his personal or business accounts back into the city’s account, attempting to mask the embezzlement.
Impact on Velda City
The financial ramifications of Paulino’s actions have been profound for Velda City:
- Dissolution of Police Department: In 2024, the city’s police department was dissolved due to financial constraints, leading to the resignation of all officers, including Paulino.
- Reduced Law Enforcement Coverage: The city now contracts with the Pagedale Police Department but can only afford 12 hours of coverage per day, leaving residents without 24-hour police protection.
- Budgetary Strain: Mayor Derrick Gill highlighted that Paulino’s $95,000 salary, combined with the alleged theft, significantly strained the city’s budget, pushing it towards potential bankruptcy.
Community Response
Mayor Gill, who initially raised concerns about Paulino’s spending in 2022 while serving as an alderman, faced resistance from the then-mayor and board.
With no action taken, he reported the matter to the FBI. Gill commended the investigation, stating, “I want to congratulate the FBI on their investigation to bring justice for the residents of Velda City.”
Legal Proceedings
Paulino’s attorney, Scott Rosenblum, has acknowledged awareness of the investigation for months and indicated plans to plead not guilty.
As of now, no court date has been set. The U.S. government seeks forfeiture of at least $313,420.02, representing the proceeds from the alleged violations.
Summary of Alleged Misappropriations
| Category | Amount | Description |
|---|---|---|
| Unauthorized Credit Card Charges | $145,428 | 828 personal expenses, including travel and repairs |
| Transfers to Personal Businesses | $43,870 | 17 transactions to businesses owned by Paulino or his spouse |
| Fraudulent Checks to Vendors | $34,374 | 8 checks for personal expenses, including a tow truck purchase |
| Direct Deposits to Personal Account | $30,667 | 20 deposits labeled as additional payroll |
| Direct Deposits to Spouse | $54,693 | 55 deposits for unperformed public works |
| Concealment Transfers Back to City | $58,171 | Funds moved back to city accounts to mask embezzlement |
| Total Alleged Misappropriated Funds | $313,420 |
The indictment of Daniel Paulino underscores the critical importance of transparency and oversight in public administration.
For a small community like Velda City, the alleged embezzlement not only depleted financial resources but also compromised essential services, notably law enforcement.
As legal proceedings unfold, the case serves as a cautionary tale about the vulnerabilities municipalities face and the need for vigilant governance to protect public assets.