KINGMAN - Shackled hand and foot, but not wearing the orange- and white-striped clothing of a Mohave County jail inmate, a subdued Diane Richards smiled at her daughter, who was in the gallery Thursday morning before Superior Court Judge Billy Sipe arraigned her on 23 felony counts related to the alleged embezzlement of more than $1.1 million from the city of Kingman over a more than eight-year period.
Sipe advised Richards, a former longtime budget analyst for the city, that four of those charges - theft in an amount in excess of $100,000 - make it mandatory that she go to prison if a Mohave County jury ultimately finds her guilty of using a city credit card to steal nearly $122,000, and misappropriating nearly $992,000 from the city's Employee Benefits Trust. The credit card was allegedly used from July 2007 through January, 2015.
The state also claims Richards embezzled from the employee account from September 2008 until last November, when special agents with the federal Department of Homeland Security and the state Attorney General's office served search warrants at City Hall and Richards' Kingman home.
Homeland Security became involved when Richards' banks notified them of "unusual activity" in her accounts. The state affidavit in support of the search warrants alleged Richards stole roughly $300,000, but an internal audit revealed the amount was allegedly more than $1.1 million.
The investigation began in September.
Attorney General Mark Brnovich in a statement said protecting taxpayers is a top priority for his office.
"Taxpayers are the real victims in cases involving theft and misuse of public moneys," he said. "Our office will continue to work with (Homeland Security) and all law enforcement agencies to investigate and prosecute these cases."
According to Brnovich spokeswoman Mia Garcia, the city credit card was allegedly used to pay for Richards' personal cell phone, utilities, and car insurance bills. Garcia said Richards covered up the thefts by submitting falsified invoices. The state also alleges the credit card was used to pay off cash advances taken out at a number of casinos in Laughlin.
Richards allegedly stole money from the employee benefits account, said Garcia, by misusing her position as its security manager. Richards, said Garcia, altered the access settings and gave herself "sole authority to both initiate and approve transactions." She allegedly transferred money out of the account to pay off 17 personal lines of credit and to also allegedly use "a large portion of the money" to cover the cash advances in Laughlin.
Originally held on a $100,000 bond, an amount state Assistant Attorney General Michael Powell wanted to keep in place, Richards' bond was reduced to $10,000, an amount her daughter Brianna Richards told the Miner the family could raise.
While Powell argued the higher bond should be imposed due to the monetary amount of the alleged embezzlement and the strength of the state's case, Sipe considered comments made by Steve Garcia, Richards' attorney, who asked Sipe to release her on her own recognizance.
Garcia noted Richards has lived in Kingman for 21 years, has significant ties to the community and has never been convicted of a prior crime.
Sipe agreed, but he said "some bond is appropriate, but $100,000 seemed excessive to secure her appearance in court" as the case moves forward. The judge, however, ordered her pre-release supervision to be at the highest level.
Richards' next court date is a hearing scheduled for Feb. 29.