Ex-symphony executive arrested for embezzlement


The Santa Clara County District Attorney’s Office reported last week that police arrested the former head of Peninsula Symphony on a slew of charges that include embezzling hundreds of thousands of dollars from the Los Altos-based nonprofit 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. The Novato resident remains in custody in lieu of $350,000 bail.

Reached by the Town Crier, Alan Bien – chairman of the Peninsula Symphony Board of Directors – declined to comment on the case.

According to a felony complaint filed against him, Carlton 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. The complaint also noted that Carlton has a prior voluntary manslaughter conviction in San Bernardino County. The Town Crier submitted a request last week to San Bernardino County Superior Court seeking additional information on the case.

Police investigate missing funds

Carlton’s arrest comes more than six months after two members of the symphony’s board received notifications from banks affiliated with the organization that its endowment and checking accounts were “unusually low,” according to a statement released by the DA’s Office.

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

Carlton resigned from his position Sept. 25, six days after board members made the discovery and contacted Los Altos Police. Lee said the missing funds prompted a five-month joint investigation in October that included Los Altos Police and the California Franchise Tax Board.

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

“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.”

A statement of probable cause – an investigation summary submitted to secure an arrest warrant – filed by Los Altos Police accuses Carlton of writing 53 fraudulent checks dating back to 2010 using symphony funds to pay himself and balances on credit card accounts in his name. Several checks, according to the statement, included the forged signature of symphony board member Dick Bennett. Carlton also allegedly deposited several checks made payable to him in a personal bank account.

The filed statement noted that the organization had a policy in place that gave the executive director “signature authority for all transactions” related to symphony expenses.

In addition, police investigators alleged that Carlton used a California driver’s license that supposedly belonged to symphony board member John Givens to obtain a $25,000 cash advance from Swift Capital “in exchange for future credit card receivables of $29,975.” Givens, the statement said, later told police that the license was fraudulent and that Carlton did not have the board’s permission to use his identity to obtain the loan.

The statement noted that a state Franchise Tax Board investigator working in tandem with Los Altos Police determined that Carlton allegedly committed tax evasion by failing to pay nearly $17,000 in taxes between 2010 and 2012.

The probable cause statement detailed other practices employed by Carlton during his tenure with the symphony. Among them, police investigators noted that after taking over as executive director – replacing Margrit Rinderknecht – Carlton “on his own discontinued the service of a symphony volunteer who reviewed and reconciled all of the bank statements.” Carlton also discontinued the services of an auditing firm hired by the symphony shortly after he came aboard, according to the police statement.

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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