By Michael Yu and Silas Hood, Nov. 22 2022

A former Foundation employee embezzled more than $1.3 million, raising questions about oversight at the non-profit and the response of University President Soraya M. Coley, who acknowledged  influencing “campus reporting” related to the case in order to distance the university and her administration from the theft, a Poly Post investigation found.

Jeanette Paredez, an account specialist at the Foundation,  stole the money in small increments over the course of a decade, court records show. A University Police Department sergeant alleged in a lawsuit filed last month that Coley ordered a police report about the theft be changed “so that Coley and the University would not look bad when and if the report was made public.”

In an email she sent to 53 recipients last year after police made similar allegations in a whistleblower complaint, Coley did not deny having the report changed. But she said her “intention was not to cover up or obfuscate such wrongdoing rather, to accurately convey the context for such occurrences, especially in matters concerning CPP’s stewardship of public resources.”

The Poly Post obtained the email via public records request.

President Coley declined to be interviewed for this story, citing the active litigation. In the May 2021 email, Coley said she was “sickened” when she learned of the embezzlement, and that she “ensured” that it was reported to the Audit Committee of the CSU Board of Trustees.

“The matter was appropriately referred to local and federal law enforcement authorities, and throughout the process, the Foundation and the University have cooperated fully with the ongoing criminal investigation,” Coley wrote in the email. The embezzlement, first indicted in December 2020, was not disclosed to the broader campus community until The Poly Post published an article referencing it last month, following the filing of the lawsuit.

Courtesy of CPP Office of Strategic Communications

Paredez pleaded guilty in federal court to mail fraud and falsifying income tax returns in March 2021. Her attorney in the case, Randolph R. Melendez, argued in a sentencing memorandum that the extremity of the embezzlement was due to a lack of sufficient oversight within the Foundation. “The activity was going on for 10 years,” Melendez wrote while urging a judge to sentence Paredez leniently. “These were events that happened two, three times a month … The fact that this went on for so long unnoticed would have been part of the problem. But for the failure to properly supervise Mrs. Paredez, the loss would not have been so severe.”

 Melendez wrote that Paradez said she had committed the offense “because she was ‘given so much authority,’ and was ‘not being monitored.’ ‘The temptation got over me.”’ During her employment with the Foundation, Paredez made an average of $30,000 to $40,000 per year, according to the sentencing memorandum.

Coley has been President of Cal Poly Pomona, and chair of its Foundation, since 2015. Sgt. Marcus Simpson claimed in the lawsuit that Coley sought to “suppress information related to the embezzlement case …  because she wanted to distance herself from the situation, fearing that it may get her fired.”

The complaint does not specify what Coley wanted changed in the police records. In her email, Coley wrote that she “felt it was imperative to distinguish that the alleged impropriety took place in the Cal Poly Pomona Foundation – a separate 501(c)(3) non-profit auxiliary organization from the University – and did not involve theft of public or state funds nor student tuition dollars.”

After the embezzlement, external financial and forensic auditors were brought in to gain a full understanding of what had occurred, and an internal auditor from CPP assisted. The chancellor’s office provided an advisory review that was conducted to analyze procedure, steps, controls and provide feedback on Foundation’s operations.

“We also internally went through a lot of steps to strengthen and improve our internal controls,” said Jared Ceja, executive director and chief executive officer at Foundation. “The key is segregation of duties, so that no one has the ability to do what has occurred here and to mitigate any likelihood that anything like this could be a repeat occurrence … It is a different organization what it was.”

Ceja joined the Foundation in March of 2020. The role was vacant since Paul Storey’s retirement in June of 2017. David Prenovost was acting senior managing director covering CEO responsibilities from 2019 through March 2020 2019, Ceja said in an interview with The Poly Post.

Established in 1996, the Foundation is a non-profit organization with independent accounting and HR departments from the university. Their goal is to offer work experience and hands-on training to students. Foundations enterprises include Dining Services, the Bronco Bookstore, the University Village and Kellogg West Conference Center & Hotel.

Between 2010 and 2020, Foundation dealt with an average of $65 million annually in revenue according to tax filings.

Paredez’s embezzlement began in July 2010 and continued until February 2020, with each fraudulent check amounting to roughly $3,000, according to a sentencing document.  

According to the court indictment, Paredez’s embezzlement was carried out by her entering her mother into the Foundation system as a Kellogg West vendor. Paredez would then generate fraudulent invoices, which she authorized and entered into the Foundation accounting processing system.

Foundation Accounting Department then generated checks drawn from a checking account that were made payable to her mother. The checks were then mailed to her mother’s residence while Paredez forged her mother’s signature to endorse the fraudulent checks, according to the indictment.  

The fraudulent checks were deposited into a joint checking account held by Paredez and her mother. She then used the deposited funds for her own mortgage payments, credit card payments, cash ATM withdrawals and personal purchases.

In total, Paredez embezzled approximately $1,322,272.80 of Foundation funds over the course of a decade, $807,741.80 of which was unreported to the Internal Revenue Service, the sentencing document shows. “One could argue that the victim would have known or should have known that this was occurring,” attorney Melendez stated, referring to the Foundation, in the sentencing memorandum. “A simple check would have revealed this, and would it seem reasonable that it went on for so long to argue that ‘but for their own’ actions, this crime would have not been so severe.”  

Melendez did not respond to The Poly Post’s requests for an interview and attempts to reach his client Paredez.

In February 2021, a few months after she was indicted, Paredez agreed in a plea deal to pay $925,486.99 in restitution to Foundation and $180,027 to the IRS. The court recommended the sentencing to be 27 months of prison with three years of supervised release.

She is scheduled to be released from a minimum-security facility in Long Beach next month, according to a Federal Bureau of Prisons database.

Feature image by Darren Loo

  • Show Comments (1)

  • Frank

    Well, well well, the chickens have come home to roost. Let’s see if Coley survives the year, she should be fired immediately. Coley the $500,000 a year oligarch, she fashions herself as a person of the people but she is really a fraud. Everything she does is calculated and done for her own personal desires. The whistleblowers all deserve huge payouts to rectify the irreparable harm Coley has done to the reputation and for the illegal retaliation.

    Kudos to the Poly Post for exposing Coley as the fraud she is. The Poly Post needs to do an investigation of the police department and their ridiculous staffing levels. Which places the campus in harms way. The current chief couldn’t investigate the theft of a paper bag. He condones people not showing up to work, and the previous administrations failure to investigate hundreds of cases. If you were a victim of a crime in the past year there is a good chance that you were denied justice, of course the president and her minions ignored the complaints of police department personnel. Keep digging this is Cal Poly’s Watergate.

    Students, staff and faculty need to unite and demand Coley is given her pink slip.

    #FireColeynow

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