Joe Phan, Jailed Millionaire Charged with City Hall Embezzlement, Is Granted Work Release

After 47 days in jail, Joe Phan is breathing some fresh air again - on the way to work, anyway. The ex-utilities department engineer accused of the largest embezzlement of public funds in modern Seattle City Hall history has scored a bed in the county's work-release facility and will be allowed to go to his new daytime job cleaning the inside of marine tanks on ships.

Unable to make $750,000 bail, the millionaire's transfer from jail was backed by his church pastor who says Phan is determined to "turn past mistakes or mishaps into positive outcomes."

Phan is accused of stealing $1 million from his employer, Seattle Public Utilities, by diverting payments for water main extensions to his personal bank account. Prosecutors say he stole more than 70 checks - written for amounts from $675 to $217,655 and totaling $1,090,762.16 - over a five-year period. Most of the diverted checks were deposited from January 2008 through November 2010, when Phan was putting, on average, $360,000 a year into his Bank of America account.

Phan, with the bank's help, had little trouble allegedly entering City of Seattle checks into his personal account - which he opened under his name and a fictitious entity called the "City of Sea" by showing a driver's license, police say. "He had an official-looking little rubber stamp made up that he used to stamp the backs of the checks, and then put them through an ATM," says prosecutor Dan Satterberg. "There was little face-to-face contact with the bank."

Arrested March 1, Phan has been unable to make bail after his assets and bank accounts were legally frozen in court by City Attorney Pete Holmes, seeking to recover the funds Phan allegedly stole. The former city engineer made $81,000 a year but has property worth more than $1.1 million, which he has agreed to deed, in trust, to the city and sell. The city has already claimed more than $200,000 that remained in Phan's BofA account and has put Phan and his wife and two children on a court-approved allowance of $1,000 a week.

King County Superior Court Judge Theresa Doyle approved Phan's bid for a jail transfer on Monday. He has since been moved to the work release facility and is allowed to go to his job as a day laborer for Marine Vacuum Services of Seattle. Owner Charlie Cambell told the court that Phan would work at least part-time on a crew that cleans fuel, chemical and storage tanks on marine vessels.

Son Xuan Nguyen, pastor of the Seattle Seventh Day Adventist Church, urged the judge to allow Phan to enter work release where he can begin to "reconcile with the community." Phan and his family have attended the church for ten years, the pastor said, and Joe Phan was a deacon and active volunteer "instrumental in helping the many poor and needy people among our community."

No trial date has been set in Phan's criminal case. A source says the two sides are negotiating a plea. Phan faces up to ten years in prison.

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