County transfer delays case against former Elks manager

PRESCOTT - A case transfer to a different county has caused a delay in the theft and fraud charges involving former Elks Opera House employee Dawn Castaneda.

Dennis McGrane, Yavapai County's chief deputy county attorney, reported this week that the local department had opted to transfer the Castaneda case to the Mohave County Attorney's office in Kingman.

"We have a family member (of Castaneda's) in the office and thought it would be best to send that out," McGrane said Wednesday of the theft and fraud case.

While not a frequent move, McGrane said the county attorney's office occasionally transfers cases to either Coconino or Mohave County when a conflict arises.

Mohave's Chief Deputy County Attorney Jace Zack said Wednesday that his department received the case package earlier this week, but had not yet had time to review it and had yet to file a formal complaint against Castaneda.

Therefore, Castaneda's Early Disposition Court hearing did not take place as scheduled on Thursday, he added.

Meanwhile, Castaneda, who earlier bonded out of the Yavapai County Jail in Camp Verde, remains out of custody on bond, Zack said.

He expects the Mohave County Attorney's Office to review Castaneda's case and "if appropriate, file charges within the next week."

The case stems from the Prescott Police Department's Oct. 13 arrest of Castaneda, 35, for alleged theft and fraudulent use of a city credit card during her time as production manager at the downtown Elks Opera House.

The arrest came about as a result of a criminal investigation that began soon after Castaneda submitted a letter of resignation to the city on Sept. 20.

Simultaneously, the Prescott City Attorney's Office has been conducting an internal investigation to look into the claims by Castaneda and several other former Elks employees that Administrative Services Director Mic Fenech had created a "hostile workplace" through belittlement, profanity and intimidation.

Both investigations had reached the point this past week to result in two actions: Castaneda's arrest, and City Manager Steve Norwood's decision to remove Fenech from supervisory duties at the Elks.

Since the arrest, dozens of local residents have expressed support for Castaneda and have questioned the timing of the arrest coming so soon after her allegations of a hostile workplace.

The Daily Courier's website has received more than 70 comments, many of which are supportive of Castaneda. In addition, a "Free Dawn Castaneda" page on Facebook has attracted more than 200 friends.

But City Manager Steve Norwood discounted the notion this week that the city was somehow retaliating against Castaneda for the hostile-workplace allegation.

"Read the police report," Norwood said Wednesday, stressing that officers reported finding thousands of dollars' worth of city property in Castaneda's possession.

A supplemental report that the Prescott Police Department released earlier this week outlines the events leading up to the arrest.

According to the report, city officials were having difficulty for months in reconciling some of the purchases Castaneda made on her City of Prescott credit card. On Sept. 28, a Finance Department employee told police officers that she had "numerous problems in attempting to keep records for purchase transactions with Dawn Castaneda."

Ultimately, the police compiled a list of more than 20 items that officials said had not been properly disclosed. After interviewing Fenech and other city officials, the police narrowed the suspect items down to: A $2,280 Apple Macbook Pro laptop computer, three iPods, men's shoes, and six gowns.

That, in turn, led to a search warrant for Castaneda's home and car. The report notes that police first went to the Dameron Street home, where - after knocking and announcing the police search, and not getting an answer - the police "breached the door with a ram." Four children were present in the home, the report stated.

The officers did a "detailed search" of the home and reportedly found several of the missing iPods, three dresses, a printer, a pair of tuxedo shoes, and a microphone.

The police then carried out a traffic stop on Castaneda's car at the Walgreens/Albertsons parking lot on Sheldon Street. "A search of the vehicle found an Apple Macbook Pro and an iPod Touch," the report stated.

Overall, police estimated the suspected items at about $6,000.

Among the allegations of the police report was that Castaneda used the city credit card to buy outfits for her family for the July gala reopening that took place in the historic Elks theater after a yearlong restoration.

Castaneda reportedly claimed, however, that the Elks Opera House Foundation had promised to reimburse the city for the cost of some of the clothing.

In an earlier interview with police, the report stated that Elisabeth Ruffner of the Elks Opera House Foundation said she "never approved any payments other than the $2,192 for costumes."

In addition, the report noted that Castaneda told officers on the day of her arrest that she had just received a letter from the city that notified her that her employment had been "severed." She was planning to return all of the items she had purchased with the card, Castaneda told officers.

City Attorney Gary Kidd explained Thursday that the city had made an "unconditional offer to return to work" to Castaneda earlier in October. That offer, which Castaneda ultimately turned down, was subject to the investigation that Prescott police were conducting, Kidd said. Had Castaneda opted to return to work, Kidd said the city would have placed her on paid administrative leave while the investigation was ongoing.

"I'm assuming the criminal thing would have gone on exactly the same way (if Castaneda had returned to her job)," Kidd said.

Kidd and Norwood noted that the internal investigation on the Elks operations was still under way this week. Kidd said Ivan Collins, an investigator in the Prescott City Attorney's Office, is conducting the investigation by interviewing city employees, Elks customers, and volunteers.

In addition, Kidd said, Collins is "looking into contracts and whether events were contracted properly." A number of e-mails from theater users complaining about the Elks operations also are under review.

Norwood added that the investigation would evaluate things such as: "Were people promised things that weren't in the contracts? Were people given special deals?"

Until he sees the final investigation report, Norwood declined to comment on its possible outcomes.

In the meantime, Norwood said Deputy City Manager Laurie Hadley continues to manage the theater.

In the coming months, Norwood said the city would determine how best to move forward with the management of the Elks.

"We're not theater production people," he said of city officials. "Running a 105-year-old historic theater is not a typical city function. Running a 500-seat theater is a tough, tough proposition."

Options might include privatizing the operation of the theater, Norwood said.

Efforts by the Daily Courier to get comments from Castaneda and the person in charge of the "Free Dawn Castaneda" Facebook page were unsuccessful on Thursday.

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