Insurance settlement Tiregate’s last act
Three years after the theft of $1 million in tires was discovered, it was laid to rest on Thursday when Douglas County commissioners agreed to accept a $215,000 insurance settlement.
While the county had $500,000 coverage for employee misappropriation the Public Agency Insurance Pool pushed back, saying that county officials should have known about the thefts and denying the claim.
In a letter, the insurer pointed out that the county had received complaints in 2008, 2012 and 2013 without conducting an audit “in a department that was consistently, year after year, generating excessive and unjustified expenditures.”
However, the county argued that wasn’t what happened, saying that the insurer improperly imposed “a heightened duty of diligence on Douglas County.”
Deputy District Attorney Zach Wadlé and County Manager Patrick Cates met with the insurer in May and were able to increase the settlement from the $88,258 that was offered in January. The thefts occurred years before Cates or Chief Financial Officer Terry Willoughby were hired.
The insurer’s investigator determined the tire inventory was off by $1.024 million.
“The county manager did an exceptional job negotiating this settlement,” Commissioner Larry Walsh said of Cates. “This settlement has been a long time coming, and I hope we can put the Tiregate issue behind us.”
Commissioner John Engels agreed it was time to settle.
“From the standpoint of the insurance company, they said you’re such a bunch of fools you deserve to lose that money.”
Motorpool Supervisor Chris Oakden has been blamed for the thefts that occurred over five years between 2012 and 2017.
According to a 99-page Nevada Department of Investigations report and the grand jury report, Oakden would use the county’s account to buy large truck tires from a Reno firm that didn’t fit any county vehicles and sell them to a California man at a discount.
A recent Douglas County grand jury convened to pursue charges in the case found there was insufficient evidence to indict any members of Oakden’s family, his co-workers or the California tire purchaser.
Oakden was fired by the county when the thefts were uncovered in April 2017 and was on his way to meet with state investigators when he was killed in a vehicle collision on April 24, 2017.
During his personnel review, Cates reiterated the importance of stressing ethical behavior among county employees.
“We can’t let anything like Tiregate ever happen again,” he said. “I hear from employees all the time that ‘we do it this way because we’ve always done it this way.’ I came out of the gate establishing an expectation for ethical behavior.”
Commissioners accepted Cates’ review and concurred with his request not to receive a merit increase.
“In light of the fiscal situation I don’t feel right with you approving that,” he said.
County commissioners voted 4-1 to renew the auditing contract with Moss Adams, despite concerns about statements in the report about slow growth in Douglas County.
The firm will conduct an audit of the Community Development and Public Works departments to develop more efficient processes.