Mon10202014

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Former Peninsula Symphony executive arrested on embezzlement, other charges

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The Santa Clara County District Attorney’s Office confirmed to the Town Crier Wednesday (March 5) that the former head of Peninsula Symphony has been arrested on a slew of charges that include embezzling hundreds of thousands of dollars from the Los Altos-based organization.

Stephen Jay Carlton – hired as the symphony’s executive director in 2010 – turned himself in Feb. 27 after the DA’s office issued a warrant for his arrest on charges that include embezzlement, grand theft and tax evasion, according to Deputy District Attorney Judy Lee. Carlton, 45, was arraigned Feb. 28, Lee said. The Novato resident remains in custody in lieu of $350,000 bail, she added.

Carlton’s arrest comes more than six months after bank officials notified the symphony’s board of directors that the nonprofit’s funds were “unusually low,” according to a statement released this afternoon by the DA’s office.

Nearly all of the 65-year-old symphony’s endowment and operating funds had vanished. One endowment originally contained $227,000 but was drained of all but $375, according to the DA. A second fund went from $195,000 to $395.

Carlton resigned from his position soon after board members made the discovery.

The organization subsequently notified local authorities of the missing funds, which Lee said prompted a five-month joint investigation that included Los Altos Police and the California Franchise Tax Board. The investigation revealed that Carlton allegedly wrote numerous checks to himself, using some symphony funds to pay off personal debts. He also allegedly forged the signatures of two board members on some checks. Carlton is also accused of taking out an unauthorized $25,000 loan on behalf of the symphony.

“Thanks to the joint efforts by the Los Altos police and the state Franchise Tax Board the crime was solved very quickly given the complexity of the crime,” Lee said in a statement. “It is important for organizations to make sure that they have a robust set of checks and balances protecting their vital finances.”

Despite the lost funds, the symphony’s concert season continued after board members and musicians donated funds to keep the organization afloat.

Carlton has a prior voluntary manslaughter conviction in San Bernardino County, according to the felony complaint filed against him. He faces nine charges in all: one for grand theft, three for forgery, one for identity theft, one for embezzlement and three for state tax evasion.

Carlton is scheduled to appear in Palo Alto Superior Court April 8. He faces a maximum of 18 years in prison if convicted on all counts.

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