The former manager of a south Palo Alto neighborhood association has admitted to embezzling tens of thousands of dollars from the group before leaving his position in late January to found a new gym.
Kimball Allen, who resigned as the administrative manager of the Greenmeadow Community Association on Dec. 30, 2010, allegedly used the association's credit card to make personal purchases and then made bogus entries into the association's accounting software to cover up his spending, according to an e-mail the association sent to the community this weekend.
The association estimates that Allen, who was hired in August 2008, embezzled about $70,000.
Allen stayed on through January 2011 to help find and train his replacement and left the association to open a gym in Redwood City, according to the Greenmeadow website. Last Thursday (March 17), he sent a letter to the association acknowledging that "the crimes that I have committed are pathetic and hurtful" and asking members to keep an "open mind."
"I got caught up in a vicious cycle of greed, selfishness and deceit," Kimball wrote in the letter, which was obtained by the Weekly. "My actions cannot be justified and the worst punishment is my own guilt."
Donna Rhoan, who succeeded Allen at the association, was the first person who noticed that something was amiss. Rhoan told the Weekly that Allen held on to his administrative access until Jan. 31, his final day at the association, and spent much of that day cleaning up the data on the association's computer.
She said Allen told her just before leaving that he had ordered checks and equipment. When the items didn't arrive, Rhoan said she e-mailed Allen on Feb. 3 to ask about them. He responded about a week later with a brief e-mail that she described as "snappy" and that didn't provide the information she was seeking.
In another case, Rhoan said she asked Allen about two payments that he signed off on to a new bank. Allen said he made an error.
Rhoan said she also noticed that many of his reported expenses were based on estimates rather than invoices. This included estimates for fitness equipment and for a sand-filtration system meant for a giant swimming pool.
Another red flag was raised when the association received a letter from a bank acknowledging the association's change of address for mailed statements. The fact that the association never requested an address change made her suspicious, Rhoan said.
Rhoan said she alerted the association's board of directors about the financial irregularities just after she noticed them. Association officials initially thought the damage was limited to $5,000 or $7,500, she said, but they soon found other examples of inaccurate accounting.
"Once we found one error, we began looking through everything," Rhoan said.
Allen could not be reached for comment and did not respond to an e-mail request for interview sent to his gym, ACRO Gymnastics Academy. The phone number listed on the gym's website did not appear to be working Monday.
According to an e-mail that Sean Giffen, president of the Greenmeadow Community Association, sent to association members over the weekend, Allen used the association's credit card to make unauthorized expenditures and then entered "illegitimate entries" for expenses into the association's accounting software to cover the spending.
Giffen told the Weekly the case is still being investigated by the police and declined to provide further details about the embezzlement.
A Palo Alto police spokesperson confirmed Monday that the investigation is ongoing and also declined to comment.
Giffen said he plans to discuss the incident with the Greenmeadow community at a Tuesday night meeting and declined to elaborate "out of respect to the community."
In his e-mail to association members, Giffen said Allen "has admitted to using Greenmeadow funds for personal use" and said the association estimates the embezzled sum to be at about $70,000.
"Illegitimate entries for expenses were being entered into Quickbooks to cover the spending," Giffen wrote in the e-mail.
He said the association would discuss the case Tuesday and inform the community about opportunities to recover the embezzled funds and the steps the board has taken to prevent future embezzlement.
"Our ability to pull together and work through difficult times is awesome," Giffen wrote. "The 2011 board, members from the 2010 board and our finance committee have worked tirelessly in addressing this matter and ensuring that we follow a process moving forward that will minimize financial risk."
Allen began working as the association's administrative manager in August 2008. Giffen announced Allen's resignation on the association's website on Dec. 30, 2010, and called Allen "an asset to our community." He also notified the community about Allen's new gymnastics facility and said Allen "credits the growth he experienced with us to help prepare him for his new endeavor."
Rhoan said Allen's departure wasn't a major surprise to most people. He was known to have other interests, particularly fitness, and it was common knowledge around the association that he would not be staying long term.
Allen, meanwhile, expressed remorse in his letter to the association and pledged to take "full responsibility."
"Words cannot express to you how remorseful I am," he wrote. "I want you to know that I plan on taking full responsibility for my wrong doings and I plan on taking the appropriate legal and emotional steps in resolving the damage that I have done."
Bounded by Alma Street and Charleston Road, the Greenmeadow neighborhood is composed of 22 blocks and about 270 homes. As part of the development, built by Joseph Eichler, the neighborhood contains a community center, swimming pool and park.