Each week, thousands of dollars in checks and cash arrive at Compton City Hall, as residents and business owners pay off their parking tickets, trash bills and various municipal fees.

The money adds up to an important chunk of the budget in a city once beset with financial problems and the possibility of bankruptcy.



For the record: A previous version of this article said Salvador Galvan would face a maximum of five years in federal prison if convicted. The maximum sentence would be 10 years.

But prosecutors say one former city employee saw all these payments as an opportunity.

Over the last six years, officials allege that Compton’s then-deputy city treasurer, Salvador Galvan, brazenly skimmed more than $3.7 million from City Hall, taking anywhere from $200 to $8,000 a day. The losses were small enough, federal prosecutors said, that they didn’t trigger alarm for years, but fellow employees privately wondered how he could afford a new Audi and other upscale expenses on a $60,000 salary.


It was only after one co-worker noticed some discrepancies that officials began investigating.

Galvan was charged with one count of theft or bribery concerning programs receiving federal funds. He has not entered a plea and could not be reached for comment.

The case stunned the working-class city, which has prided itself in recent years on shedding some of the crime, blight and corruption woes that had long plagued Compton. Mayor Aja Brown on Wednesday said the allegations “challenge the public’s trust” but said the city has been working in recent months to improve financial controls and create new processes for detecting fraud.

“I’m disappointed,” said Compton community activist William Kemp. “This went on for years. What were the checks and balances that he could pull something like this off? Was he alone? Did he have help? And what procedures have been put in place that the next man don’t do this going forward?”


Joyce Kelly, a Compton resident and community watchdog, agreed, adding, “We are praying that someone does not get tired of investigating and investigates further.”

Galvan initially was arrested by the Los Angeles County Sheriff’s Department in December after City Treasurer Doug Sanders confirmed “suspicious activity” in a ledger discovered by one of his employees. Galvan then posted bond and was free until Wednesday, when he was taken into custody by federal authorities.

Galvan had worked since 1994 in the Compton treasurer’s office, where he was responsible for handling cash, city officials said. As part of his duties, he collected money from residents paying their water bills, business licenses, building permits and trash bills.

While Galvan maintained accurate receipts of the cash he received for city fees, he would submit a lower amount to the city’s deposit records and, ultimately, on the deposit slips verified by his supervisors and the banks, federal prosecutors said in court documents.


An audit that compared a computer-generated spreadsheet tracking money coming in to the city with documents Galvan prepared showed that he started skimming cash in 2010 and that the amount grew with time, prosecutors said.

The first thefts occurred in May 2010 and amounted to $1,400, Galvan’s criminal complaint alleges. The amount he skimmed remained about the same until November 2010, when it jumped to more than $12,000, officials say.

Galvan is accused of stealing $395,824 in 2012 and $719,345 in 2013. The biggest loss was in 2015, when $879,536 was unaccounted for in the city’s books, court documents show.

It was one of Galvan’s vigilant co-workers who first noticed a $7,000 discrepancy that broke the case. Prosecutors allege that when Galvan was confronted, he confessed and was arrested soon afterward.


Investigators said Galvan told his boss “something to the effect [of], ‘Desperate times call for desperate measures’ and that he had to be a man, so he took the money to save his son’s house because he did not want his grandson out in the street.”

Despite Galvan’s modest salary, co-workers noticed he enjoyed a more affluent lifestyle, officials said.

Colleagues told investigators that Galvan always had the newest cellphone and cash on hand. He paid for office parties, bought gift cards for cashiers and bought the office a Keurig coffee machine and boxes of K-cup coffee pods for it, documents show. They noted that Galvan started at work with an old Toyota and moved up to a black Audi sedan during his employment with the city, officials said.

A search of Galvan’s home turned up 72-inch flat-screen TVs in three bedrooms and a living room, as well as 20 pairs of Ugg shoes that belonged to his wife and daughter, the criminal complaint stated.


Receipts for a $1,500 Ortho mattress, a contract for a relative’s tuition at a makeup academy and estimates for plastic surgery for Galvan’s wife also were found, authorities said.

Galvan faces a maximum of 10 years in federal prison if convicted.

In a statement, Brown said she understands the public frustration over the allegations.

“Unfortunately, the actions of one employee can challenge the public’s trust that we strive daily as a City to rebuild,” she said in the statement. “The alleged embezzlement and theft of public funds is an egregious affront to the hard-working residents of Compton as well as to our dedicated employees. The actions of one person does not represent our committed City employees who — like you — are just as disappointed.”


joseph.serna@latimes.com

Twitter: @JosephSerna

angel.jennings@latimes.com

Twitter: @AngelJennings


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UPDATES:

4:45 p.m.: This article was updated throughout with additional comments from Compton city officials and community activists.

2:20 p.m.: This article was updated with details of the investigation from the criminal complaint.

This article was originally published at 12:20 p.m.