ODOT workers plead guilty in equipment reselling scheme

By Raymond Rendleman
Oregon Capital Bureau

Three longtime Oregon Department of Transportation employees who worked out of ODOT’s regional maintenance station in Clackamas pleaded guilty this month to theft of government property.

On Oct. 4 in Clackamas County Circuit Court, the wife of one of the ODOT employees was included in a total of four defendants who admitted to crimes for their roles in a multimillion-dollar equipment reselling scheme.

ODOT employees Frank C. Smead, John Wayne Tipton and Autumn Arndt — along with Smead’s wife, Marta Smead, who was not employed by ODOT — were each guilty of purchasing equipment using an ODOT procurement card, creating fraudulent invoices and reselling more than $6 million worth of items for their personal profit.

Over the course of many years, several million dollars’ worth of equipment were fraudulently purchased and resold, according to an investigation by the Oregon State Police. The ODOT employee actions were discovered during an investigation into an unrelated ODOT whistleblower claim and was prosecuted by Clackamas County Senior Deputy District Attorney Rusty Amos.

When the charges were announced in early 2020, ODOT Director Kris Strickler said these three employees violated trust, if proven true in court. He said ODOT was making changes right away to put better monitoring tools in place.

“The public has placed in us a trust to spend state transportation dollars with integrity,” Strickler said.

Strickler ordered several internal measures to help “prevent similar incidents.” These measures included:

• Repurposing staff in ODOT’s Central Authorization Unit to provide more close oversight and auditing of purchases.
• Engaging an outside entity to help the department discover vulnerabilities in financial controls and find ways to close those loopholes.
• Explore ways to improve the agency’s inventory control system.

 

As the leader of the scheme to defraud the public, it is expected that Tipton will serve a longer prison sentence than the other defendants. His 12 years in prison stemmed from his being found to have committed 12 counts of first-degree theft and six counts of aggravated theft, plus nine counts each of computer crimes and official misconduct, more crimes than any of the other defendants.

Later joining Tipton’s illegal efforts, Arndt and Frank Smead each committed four first-degree theft counts, five counts of aggravated theft, nine counts of computer crime and nine counts of official misconduct. Smead will serve seven years in prison, while Arndt is expected to serve five years and pay $100,000 restitution at the time of sentencing.

Marta Smead’s six counts of first-degree theft one count of aggravated theft, six counts of computer crime will likely mean three-and-a-half years in prison for her.

Sentencing will take place in the Clackamas County Circuit Court on Jan. 6.