How DuPage forest officials discovered scam
Two former administrators charged with scamming the DuPage County Forest Preserve District out of more than $150,000 avoided suspicion for years, officials say, until their loyalty to a vendor seeking a computer contract triggered an internal investigation so secret that only three district officials knew about it.
Prompted by the findings of the forest preserve probe, law enforcement authorities conducted their own investigation for nearly 10 months before numerous counts of theft, conspiracy, accepting kickbacks, official misconduct and other charges were filed in September 2012 against Mark McDonald, 53, of Wheaton, and David Tepper, 49, of River Forest.
Prosecutors have accused McDonald, the district's former information technology director, and Tepper, the district's former IT manager, of running two "elaborate" schemes over a six-year period. A co-defendant, Arif Mahmood -- owner of the now-shuttered Alamach Technologies Inc. -- is facing charges of conspiracy, theft, accepting kickbacks and official misconduct in connection with one of the schemes.
The information forest preserve officials initially brought to the state's attorney back in November 2011 hasn't been made public -- until now.
Saying they want to set the record straight about what they knew and when, forest preserve officials provided the Daily Herald with a copy of a once-confidential report by JRM Consulting Inc., that they say first uncovered the potential wrongdoing. It recently was determined that a court order preventing the district from releasing certain documents in the case doesn't apply to the 30-page report.
"The district acted immediately, quickly and responsibly," forest preserve district spokeswoman Sue Olafson said. "As soon as it heard there were some issues, the district took that information to the state's attorney's office."
McDonald, Tepper and Mahmood all have pleaded not guilty. Last week, defense attorneys representing Tepper and Mahmood said the evidence that emerges during the future trials will show their clients didn't do anything wrong.
"He (Tepper) did not engage in any illegal activities," said Terry Ekl, Tepper's attorney.
Forest preserve President D. "Dewey" Pierotti Jr. said "something didn't sound right" in July 2011, when the district was looking to buy 45 desktop computers.
Even though the $38,205 price quote from Alamach Technologies was nearly $200 more than the company with the lowest bid, McDonald pushed for the forest preserve board to award the contract to Alamach.
Pierotti said his suspicion grew when he learned Alamach had a number of previous contracts with the district dating to November 2009. The company had been paid more than $450,000 by the district over that time.
"They had been paid $350,000 in one year," Pierotti said. "I said, 'How could anyone earn that much money?' They gave me some cock and bull story about how we're missing people. It made me very suspicious."
None of the previous Alamach contracts had been reviewed by commissioners because contracts for less than $10,000 can be awarded without consent of the board, officials said.
When Alamach got Pierotti's attention, he directed Robert Mork, the district's attorney at the time, to find a computer forensic company to investigate whether taxpayer funds were being misused by the IT staff.
Records show forest preserve executives met with JRM representatives on July 27, 2011, the morning after McDonald submitted a memorandum recommending Alamach as the "most responsible" bidder.
Need for secrecy
Pierotti said he initially didn't know who was involved and "didn't trust anyone."
So when JRM was hired, forest preserve commissioners were only told the Naperville-based firm was going to do a general evaluation of the IT department.
Pierotti, Mork and former Executive Director Brent Manning were the only ones who knew the true purpose of the probe, officials said. For roughly two months, the consultants interviewed staff members, reviewed documents, inspected server rooms and did an inventory of the district's computers and other hardware.
Jim Knippen, the district's current attorney, said the probe was done in secret to prevent McDonald and Tepper from finding out about it. "Because of their superior technical knowledge, they had the potential of destroying evidence associated with the investigation," he said.
Findings in JRM's final report from November 2011 mirror what prosecutors are now alleging against McDonald, Tepper and Mahmood.
Officials say McDonald and Tepper co-owned a company -- Integrated Design Solutions -- that was given forest preserve work. From July 2005 to November 2011, the company received more than $90,000 from the district for equipment and services that never were delivered, authorities have said.
JRM noted in its report that most of the equipment ordered from Integrated Design Solutions couldn't be located during its inventory.
The report also concluded there was a "clear pattern" of purchases being spread out to fall below McDonald's approval limit "to avoid commission approval process and bid process." As the IT director, McDonald had the ability to make purchases of less than $10,000.
"It was not anything that would have created a suspicion because it was consistent with district purchasing policy at the time," Knippen said.
Loyalty to Alamach
Prosecutors say the scheme with Mahmood -- a 37-year-old Glendale Heights man -- resulted in more than $64,000 in kickbacks going to Tepper and McDonald between February 2010 and November 2011.
Mahmood's former company, Alamach, overbilled the district for contracted work and then subcontracted with Integrated Design Solutions in the amount overbilled for services that never were provided, authorities have said. Mahmood is accused of stealing more than $10,000 from the district.
According to the JRM report, Tepper and McDonald showed "unusual loyalty" to Alamach. The consultants also found the district was overcharged "by a factor of approximately 20 times" for Alamach's hosting services.
During the bidding process for the replacement computers, Mahmood was seen with Tepper in his office reviewing a spreadsheet containing information about all the bids that had been submitted, according to the JRM report.
Mahmood's defense attorney, Tim Martin, insists Alamach did the work it was hired to perform and never overcharged the district. He said there were no kickbacks.
"We are going to use expert testimony from, in my opinion, more reliable experts in the field to say the amount billed and paid by the forest preserve was in line," Martin said.
Martin said the JRM report "lacked specific details to support the allegations that the state is making against my client."
McDonald and Tepper were placed on leave on Nov. 4, 2011. Their careers with the district came to an end a week later. At the time, McDonald was earning an annual salary of $110,533, and Tepper was being paid $87,746 a year.
After they were charged, Tepper, McDonald and Mahmood posted bail and were released pending upcoming trials.
The district has filed a civil suit, but it's on hold until the criminal case is resolved.
"If there is a restitution order entered in the criminal case, there will be no need for the district to pursue the (civil) case," Knippen said.
Meanwhile, district officials say changes have been made to the way contracts are awarded -- and more revisions are planned.
"I can't say it won't happen again," Pierotti said. "But it would be very difficult for someone to try to do that now. We put in checks and balances that should have been in place before this happened."