Three Charged with Embezzling from St. Isidore Church; $580,000 Missing

After a nine-month police investigation, the Contra Costa County District Attorney's Office filed charges Monday against three people it says embezzled a total of $580,000 from church in Danville.

Danville Police Chief Steve Simpkins said the investigation found that former St. Isidore employees Kathleen Dake and Virgilio Lukban and volunteer Evelyn Peinado stole about $360,000 from the church through fraudulent use of credit cards. Dake also is charged in connection with stealing about $220,000 more, using checks from St. Isidore for personal expenses.

Dake was an office manager who began working at the church in 2002, and Lukban was a facilities manager who began working at the church in 2003, according to Diocese of Oakland spokesman Mike Brown.

All three were taken into custody Monday.

According to a statement issued Monday by the Diocese of Oakland, St. Isidore's Pastor Gerry Moran noticed discrepancies in the parish financial office that troubled him in May 2010. He then asked the parish finance committee to look into his concerns.

After a preliminary internal investigation by the church, the committee became concerned that Dake, a Blackhawk resident, might have embezzled parish money. She was interviewed in mid-August by the committee, and an accounting firm was hired for a fraud examination.

The diocese reported the possible theft to the Danville Police Department in August. Over the course of the investigation, the diocese put the two suspected employees on administrative leave, and they were later fired.

In Monday's statement, the diocese said, "The parish did not have sufficient internal controls in place to detect and prevent such a high-level, sophisticated crime as the one now being prosecuted by the Contra Costa district attorney."

Moran, overseen by the diocese and the parish finance committee, has hired a bookkeeper and an accounting manager for financial administration for cash receipts, disbursements, payroll and financial statement preparation, according to the statement.

The Diocese of Oakland said the organization "intends to seek restitution of the stolen funds from the perpetrators, and if necessary, financial recovery through the courts."

The statement went on to say, "We are confident that all stolen funds will be returned to the parish through legal redress or its insurance coverage."

Simpkins said the Contra Costa County District Attorney’s Office has filed the following charges:

• Dake, 58,  is charged with five counts of embezzlement.
• Peinado, 64, of Alamo, is charged  with three counts of embezzlement.
• Lukban, 46, of Danville, is charged with five counts of embezzlement.

After their arrests Monday, Dake and Lukban were booked at the Contra Costa County jail in Martinez. Dake is being held on $433,000 bond and Lukban on $134,000 bond. Peinado turned herself in at Contra Costa Superior Court in Walnut Creek for her arraignment.