Rancho Santiago stakeholders take forensic audit findings to O.C., L.A. investigators
As Rancho Santiago Community College District officials determine their response to a forensic audit showing conflicts and state education code violations regarding the maintenance of an off-books insurance rebate fund, some are seeking the involvement of a higher authority.
Two individuals with ties to the district, one of them a member of its board of trustees, have reached out to district attorney's offices in Orange and Los Angeles counties with the audit's findings and complaints about the Cerritos-based risk pool operator that held the funds, Alliance of Schools for Cooperative Insurance Programs (ASCIP).
Findings from the audit were delivered during a March 10 regular board meeting by Travis Casner, a certified fraud examiner with Houston-based firm Weaver. Casner found current and former Rancho Santiago administrators violated sections of California education code and state budget accounting guidelines when they withheld the risk management fund balances and statements from elected officials as well as their own external auditors.
The report also described conflicts of interest surrounding two now-retired vice chancellors, John Didion and Peter Hardash, who did not fully disclose they served on the board for ASCIP, a joint powers authority, and a subsidiary created by the agency to handle bond construction insurance, even as they recommended policies to the district through the two entities.
ASCIP's practices were also examined by auditors and called into question during Casner's presentation. He showed what appeared to be a practice of intentionally obscuring the amount of excess premiums, or rebates, returned to individual member school districts as officials with the agency reported only one grand total on annual audits.
RSCCD Board President Daisy Tong assured constituents at the meeting the board would discuss the ramifications of the audit. But her one of her board colleagues, Phil Yarbrough, is taking things one step further.
The trustee Tuesday forwarded the report to the Orange County district attorney's major fraud unit, in hopes investigators might follow up on possible violations of law identified in the forensic audit.
'It's not handled by us. We don't call the Santa Ana Police Department,' Yarbrough said in an interview Thursday. '[But] I have a responsibility as an elected official to make sure this is being looked at seriously.'
Yarbrough said there are two avenues for prosecutors at multiple levels to explore — violations at the district level and the wider implications of ASCIP's practices involving the 140 public school district members it serves, from San Francisco to San Diego counties.
While he and fellow board members were primarily focused on the former, investigators may want to look into the joint powers authority that provided a context for RSCCD administrators' actions, Yarbrough said.
'All of this is pointing to financial fraud, and that's at the state level. There needs to be an investigation for there to be complete transparency and accountability,' he added.
A similar complaint has been brought to the attention of prosecutors in Los Angeles County, where ASCIP is headquartered, by Barry Resnick, a retired RSCCD professor and former faculty union president from 2012 to 2016.
Resnick on Tuesday forwarded the recent audit report to the L.A. County district attorney's public integrity division, which reviews complaints alleging criminal misconduct, prosecutes crimes committed by public officials in the course of their official duties, according to its website.
In January 2023, the retiree reached out to the Daily Pilot with concerns about Didion and Hardash's ties to ASCIP and a Hawaii-based subsidiary it created in 2005 to handle bond-construction related insurance—Captive Insurance for Public Agencies, Ltd. (CIPA).
When he discovered last year ASCIP was holding tens of millions of dollars in public school funds, Resnick worked with others to uncover the $8.1 million being held on behalf of Rancho Santiago.
Using records obtained from the organization that were also reviewed by the Pilot, he learned other public school and community college districts reportedly had insurance rebates banked by the agency and contacted them to see what their administrators knew.
'I wanted to know, is what occurred within the Rancho Santiago District an anomaly, or is this a pattern involving other districts?' Resnick said Friday. 'And I found out there are other districts that are unaware they have funds being held by ASCIP.'
Resnick is hopeful that, armed with the Rancho Santiago audit and his own findings, prosecutors might take up the case.
'This is not the way taxpayer funds should be handled,' he said.
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Jesse James and his brother, Frank, along with six other members of their gang, attempted a bank robbery in Northfield, Minnesota on Sept. 7, 1876. It was a messy affair, with four men killed during the ensuing gun battle, including two members of the gang. It was a lot of blood spilled for a total take of about $25 in nickels. Now on the run, the group split up a few days later but still managed to evade capture. Trying to make their way back to their home state of Missouri, the brothers made stops near Luverne, Minnesota on Sept. 17 of that year and entered what was then Dakota Territory about five miles north of Valley Springs later that evening, a timeline that suggests the James brothers were never near Devil's Gulch. "It's known they were 12 miles north of present-day Luverne in the evening. They were in Dakota Territory, (but) in all likelihood they traveled as fast and steadily as they could over that ground, and they would have missed it altogether," Fanebust said. The Devils Gulch gap today measures about 18 feet across and rises about 30 feet above the creek bed below. The lead up to the eastern edge of the gap is rugged and uneven, with dense trees obstructing any clear path where James could have spurred his horse on to a full gallop. Though it is assumed by many that a well-rested horse could clear such a gap, the short approach of the chasm calls into doubt just how much momentum could be carried into the jump. The legend also tends to overlook the details of Frank James. He is not mentioned jumping the gulch along with his brother, leading Fanebust to wonder why Frank James didn't get the same credit his more famous sibling did. Fanebust, who researched the event in countless pages of newspapers, books and libraries, said the legend began in the 1920s, when an area newspaper gave an account of an unnamed individual who "showed us the place where Jesse James jumped the channel riding horseback." A year or so later, more articles on the legend followed, and that summer, a W.W. Sanders invited a group of area newspaper men to the site for a tour where he repeated the claim. The story eventually gained more and more fame, to the point that it's still referred to in 2025. Fanebust said the legend, though almost certainly untrue, could have grown out of a true story where Jesse James or both brothers did leap across a creek or similar landmark on horseback during their escape. Over the years, the story grew, the gap became wider and the plunge to the bottom of the canyon deeper, with resident fans of local lore eventually settling on the picturesque setting of Devil's Gulch as the location where the myth took place. There's no solid evidence that it occurred, Fanebust said. But the spectacular mental image of a man on horseback making such a jump in a scenic area — something straight out of a western movie — makes for an enticing story. "Somehow it got built up into this legendary, impossible, leap across Devil's Gulch," Fanebust said. "It's probably nothing that we will ever be able to prove or disprove." The ambiguous nature of the legend hasn't stopped Garretson from embracing the story. Residents still celebrate the notion that maybe, just maybe, James did make the jump with the annual Jesse James Days event, which was held this year on Friday and Saturday, June 13 and 14. The two-day event features street dances, car shows and other entertainment that helps promote the Minnehaha County community of 1,175 people. Carrie Moritz, who co-owns the Garretson Gazette newspaper along with her husband Garrick and also serves as president of the Garretson Commercial Club, which organizes Jesse James Days, said residents look at the legend with a bit of a wink and a nod. Folks know the story is unlikely to be true, at least as it's told today, but that doesn't mean that it isn't fun to talk about. But there are a few facets of local lore that do add some credence to the tale. "Maybe it's just a tall tale that got told," Moritz said. "But we do have documentation from local farmsteads that Jesse stayed at their place. Or that he stole a horse from their farmstead, or what have you. So there is known evidence that he and his brother were around here. But as for outrunning the posse and jumping the gulch? Who knows." There are other angles that could support the theory. Moritz noted that over the course of 150 years the landscape of the gulch has changed. Erosion has likely widened the gap to its present width, meaning that if James did jump the gulch all those years ago, it was likely not as wide a jump as it appears today. She also said the land where Devil's Gulch rests, which is owned by the Wiese family and leased to the city for public use, was not always densely packed with trees. The trees that add so much to the beauty of the area were planted by the family sometime in the mid-20th century. This means James' jump may have been both much shorter and had a much smoother leadup to the jump than is there today. "It looks like old-growth forest, but it's not," Moritz said. As for where Frank was during Jesse's legendary jump? Moritz said it has been posited that Jesse temporarily stashed his brother in a cave a ways up north on Split Rock Creek and then went on a ride to distract the posse from their underground hideout, which would explain Frank's absence from the legend. That cave is now collapsed, Moritz said, but it was a popular spot for adventurous kids to explore in the 1950s. Whether or not James successfully jumped Devil's Gulch — or another anonymous span of creek somewhere miles away — Jesse and Frank James did eventually make their way back to Missouri without being cornered by the posse. Jesse James was eventually killed by Robert Ford in 1882, and Frank James surrendered to authorities shortly after. He lived a quieter life after his brother's death, leaving the criminal world and working a variety of odd jobs. He died in 1915. But their legacy as old West outlaws lives on, particularly in places like Garretson, where visitors come by the thousands for Jesse James Days in the summer. Moritz said the celebration is a fun time that promotes the community, offers a wide range of activities and entertainment and brings all-important dollars into the local economy. "It does make a huge financial impact, and that's part of the reason it's put on by the Garretson Commercial Club," Moritz said. "That's how you get tourism money, and that's always the goal — to get people to come to town, enjoy the atmosphere we've got around here and just realize that we've got a great little town here." Whether his infamous jump over Devil's Gulch actually occurred continues to be debated. Fanebust said the uncertainty of exactly what happened is part of the appeal of the story, and the myth is not likely to die out. The story serves to spur interest among the public on the Wild West and its expansive mythology, and he said interest in the topic can lead to the study of other historical stories that are just as interesting but can also be proven to be true. Believing the Devil's Gulch legend may require a leap of faith, but Fanebust said the event will likely continue on long into the future. And there's nothing wrong with that, he said. "It is a legend with a long life, and it is an integral part of the story of the great escape by the James brothers," Fanebust wrote in a summary of the events. "There is no point in trying to drive a stake through it, because it can't be killed. Somewhere out there someone might find an answer, a rational explanation for an issue that seems to be pleading for closure. But then again, maybe not. Maybe, just maybe, the romance of history has a legitimate place in this outlaw narrative alongside plain, dull facts."
