Kimball Allen, the former administrative manager who embezzled nearly $70,000 from a Palo Alto neighborhood association, pleaded no contest on Friday morning (April 29) in Santa Clara County Superior Court in Palo Alto.
Allen, 29, was accused of a 2010 spending spree using the Greenmeadow Community Association's credit card. His expenditures included a down payment for a BMW roadster, trips to Hawaii and Mexico and other vacations and hair transplants.
Under a plea deal, he will receive a six-month sentence in county jail and must make restitution of the total amount he took from Greenmeadow within one year.
The jail term will be stayed while he works to pay back the debt. But if he does not make restitution within one year, he must serve the six-month sentence, Rob Baker, Santa Clara County supervising deputy district attorney, said.
Allen is expected to pay back $60,000 to $70,000. The full sum will take several months to compile, Baker said. Upon completion of restitution, the judge will reduce the embezzlement conviction to a misdemeanor, and Allen would be on probation for three years, he said.
His sentencing hearing is scheduled for Aug. 18.
Baker said the primary goal was to hold Allen accountable for his crime and to enable Greenmeadow to recoup its losses.
"The promise of a misdemeanor and six months in county jail provides a great incentive to reimburse Greenmeadow and make them whole again," Baker said.
Allen's age, lack of a prior criminal record and willingness to accept responsibility were also factors in the deal, he said.
"He's been very remorseful. I think it's a very fair resolution," Baker said.
Allen appeared in a neatly pressed gray suit. The front of his hair was combed in his trademark ducktail flip.
His thin frame sat motionless, his hands tightly clasped as he awaited Judge Thang Nguyen Barrett.
Allen had originally pleaded not guilty to the felony charge, which could have resulted in a three-year prison sentence if convicted by a jury. That plea appeared to largely have been a formality prior to the plea negotiations.
He resigned his position in December 2010 to start up a gymnastics studio in Redwood City. Some of the equipment and the business incorporation costs were charged to the association's credit card.
His crime was discovered by his Greenmeadow successor when several items he said would be delivered never arrived. An audit of the association's books found that invoices for many items he recorded in the association's books never existed. He substituted the business-related items to cover for his personal purchases, according to court documents.
Allen wrote a one-page, handwritten confession and apology to the association on March 17.
Douglas Rappaport, Allen's attorney, said Allen is working and "is working very hard" to pay back Greenmeadow.
"It's one of those rare win-win situations," he said of the agreement.
"People do make mistakes, and without disclosing the reason why, there was a reason he made this mistake," Rappaport said.
"Mr. Allen acknowledged he made a mistake very early on. He's very remorseful and is now working very hard to make up for his mistake. In the end, the homeowners' association will be made whole and everyone will come out of this process better people," he said.
He declined a request for an interview with Allen, citing the open case and his client's pending restitution. Allen now reportedly lives in Alaska, where his sister-in-law lives.
Sean Giffen, Greenmeadow's president, said he saw Allen in the courtroom earlier that morning. Allen turned and gave him a nod, he said.
"It was certainly uncomfortable. If I had one feeling, it was probably pity. I really hope that he has the ability and motivation to make us whole, and I hope he finds a good path in life and becomes a productive member of society, We need more good people out there," he said.
He acknowledged that some community members would be disappointed that Allen won't immediately be serving jail time.
"I think we all agree on the restitution," he said.
But as president, his primary focus has been getting the organization to heal and getting the money back, he said.
"It's great news that we have that opportunity," he said.
If Allen doesn't make restitution, "then the wheels of justice will act accordingly," he said.
Greenmeadow's "wholeness" goes beyond just the monetary repair, Giffen said.
"Getting back to a level of trust, I think we own that. It has to do with our own internal processes that we're continuing to refine. Once we've fully arrived at a prudent system or process, we'll be able to move on without fear," he said.
Association members have faith and trust in new administrative manager Donna Rhoan, who first discovered and reported Allen's embezzlement, he said.
The association is working on instituting safeguards that will also protect any future administrative manager from being in a similar position, he said.
"Our processes have changed. There are multiple eyes on the books, so to speak," he said.
Allen's embezzlement does have impacts beyond financial, Giffen acknowledged.
"While we may get the money back, our time and effort can't be returned," he said. "It's been a huge effort that you can't put a price on at the end of the day."