Kimball Allen, the 29-year-old former administrative manager accused of embezzling more than $65,000 from the Greenmeadow Community Association, pleaded not guilty on Thursday (April 14) in Santa Clara County Superior Court.
Allen faces up to three years in prison for one count of embezzlement of more than $60,000, a felony.
He is accused of making more than 250 personal charges on the association's business credit card between February 2010 and January 2011 and falsifying the expenses to cover his crimes, according to a Palo Alto police report.
Allen is alleged to have spent the money on hair replacements, a down payment on a BMW roadster, trips to Hawaii and Mexico, gym equipment for his gymnastics business and a membership at an upscale Palo Alto fitness club, among other purchases.
Allen surrendered at the Santa Clara County Jail in San Jose Wednesday night. He previously wrote a letter of apology to the Greenmeadow association, saying: "The crimes that I have committed are pathetic and hurtful."
He sat tensely during the brief arraignment in Santa Clara County Superior Court's Palo Alto courthouse Thursday, wearing jail-issued plastic orange sandals, a brown jail shirt and gray sweatpants. His wrists were shackled.
Douglas Rappaport, Allen's attorney, said Allen's sister-in-law in Alaska had provided papers showing that she was a reliable source of bail. He asked Judge Douglas K. Southard to forgo bail and to release Allen on his own recognizance, since Allen admitted the crimes and was remorseful and wants to make restitution.
Prosecutors said they would not agree to releasing Allen without bail unless he posted the full $50,000 in a Department of Revenues account for disbursement to his victims.
"That is unconstitutional. It's extortion," Rappaport said.
But Southard said he thought Rappaport had argued to put the $50,000 cash in the fund when he made his request for the release.
"It's not extortion to agree to something you suggested," Southard said.
Rappaport clarified that Allen wanted to use the $50,000 bail money instead to start repaying the association. The arrest is Allen's first offense; he has cooperated and surrendered and has a legitimate source of bail.
"He's a perfect candidate for release," Rappaport said.
"He frittered away $65,000 on a BMW and hair transplants. He's a transient and unemployed," Southard said, indicating that although it is Allen's first offense, his behavior appeared capricious.
He agreed to reduce bail to $10,000 in accordance with the bail schedule, which means that Allen would have to come up with 10 percent, or $1,000 to be freed.
Rappaport said later by phone that his client could be released sometime today, perhaps near midnight, but he did not know for sure. His next court appearance is scheduled for April 29.