The former superintendent of the Centinela Valley Union High School District pleaded not guilty Friday to a dozen felony counts, including misappropriation of public funds and embezzlement.
Superior Court Judge Thomas R. Sokolov denied the defense’s request to lower the $495,000 bail for Jose A. Fernandez, 57, who has been jailed since being arrested Wednesday morning.
Fernandez — who appeared in blue jail clothes and with his hands cuffed behind his back in Sokolov’s Torrance courtroom — could face up to 15 years in prison if convicted of six counts of conflict of interest, three counts of misappropriation of public funds, two counts of grand theft and one count of grand theft by embezzlement of public funds.
Defense attorney Stephen Bernard told the judge that his client — a married father of two — is battling multiple health issues, including prostate cancer.
“He isn’t going anywhere,” Fernandez’s attorney said. “It doesn’t seem necessary that the bail be that high.”
Deputy District Attorney Sean Hassett countered that the prosecution considers Fernandez a flight risk.
Hassett told the judge that the alleged losses are estimated at $1.5 million and could be as much as $3 million.
Outside court, Fernandez’s attorney said, “There are a lot of falsehoods and accusations that were made, and I believe some of those accusations were made to bolster the bail.”
Bernard told reporters that his client’s parents want to use their home as collateral to post the bond, but Fernandez will remain behind bars while awaiting a hearing Tuesday in downtown Los Angeles on a determination by the prosecution that the money used to purchase the home 14 years ago came from a lawful source.
Bernard said his client is doing “horribly” and that he is “absolutely” concerned about Fernandez’s health if he remains in jail.
“He had a removal of the prostate in January of this year. He had cancer. There is an issue of whether it’s metastasized or spread and so what he does is every three months he has to have his blood levels checked,” the defense attorney said, noting that his client also had a mechanical valve in his heart replaced several years ago and has to take a blood-thinning medication.
Prosecutors allege that Fernandez manipulated the school board and its policies and procedures to dramatically increase his pay and benefits during his nearly five-year term as the superintendent of the district, which operates a half-dozen schools in Lawndale and Hawthorne.
Fernandez is accused of unlawfully creating supplemental retirement programs for himself and other school district officials and making last-minute changes to a retirement plan that allowed him to spike his salary to get lucrative retirement benefits.
In 2013, Fernandez’s wages for purposes of the retirement plan totaled more than $750,000, nearly $500,000 more than the school district’s next highest-paid employee, according to the District Attorney’s Office.
The alleged violations were not discovered until after the D.A.’s office was provided with a copy of a Daily Breeze article in February 2014 about the “excessive salary and fringe benefits” received by Fernandez, according to the criminal complaint.
The school district’s board subsequently retained an attorney to review Fernandez’s employment contract terms for the purposes of renegotiation, and “were not aware” prior to the lawyer’s March 2014 presentation that Fernandez had received “substantial financial benefits beyond what had been represented to them at the December 9, 2009, board meeting when Fernandez’s employment contract was approved,” the criminal complaint alleges.
Fernandez’s “frequent concealment from the board of material information largely prevented the board from discovering Fernandez’s crimes against the district,” the complaint alleges. “For example, by overwhelming the board with the consideration of revisions to approximately 3,000 board bylaws, board policies and administrative regulations in December of 2010, defendant Fernandez succeeded in burying lucrative financial provisions for himself in the alleged revisions.”
The complaint further alleges that Fernandez “also concealed from the board a supplemental retirement benefit he conferred upon himself in the amount of $294,000 when he failed to submit the plan design and execution agreement to the board for ratification in March of 2010. Fernandez also concealed from the board the fact of his plan to unilaterally increase his calendar year pay in 2013, thereby resulting in substantially enhanced retirement benefits for himself in a separate retirement plan Fernandez caused to be approved by the board on December 11, 2012.”
The school district unanimously voted in 2014 to fire Fernandez, but did not specify the reason for the firing, the Daily Breeze reported then.
City editor Frank Suraci and then-Daily Breeze staffers Rob Kuznia and Rebecca Kimitch subsequently won a Pulitzer Prize for local reporting in 2015 for their investigation into the school district and Fernandez’s salary. It was the first Pulitzer for the Torrance-based newspaper.
–City News Service