Clayton vice mayor charged with embezzlement; he claims innocence [Contra Costa Times, Walnut Creek, Calif.]

May 25--Clayton Vice Mayor Joseph Medrano has been charged with embezzling $159,000 from a Peninsula insurance client and is scheduled to be arraigned next month, a San Mateo County prosecutor said Thursday.

If convicted, he faces five years in state prison.

San Mateo County prosecutors say Medrano, acting as an insurance broker for wireless network provider iPass, collected more than $159,000 in insurance premiums from the Redwood Shores company between January 2009 and October 2010. Prosecutors contend the 48-year-old Medrano failed to forward the money to his parent company, Travelers Insurance, as required.

After Medrano's May 18 preliminary hearing, a San Mateo County judge ruled there was enough evidence to proceed to trial, said Karen Guidotti, San Mateo chief deputy district attorney. He will be arraigned June 1.

Medrano pleaded not guilty shortly after he was charged Feb. 24, 2011.

"I'm not guilty. I have nothing to hide," Medrano said by phone Thursday. "I'm 100 percent confident a jury will dismiss it and let it go when they hear the facts."

Medrano said his client, iPass, was changing management at the time, and the payments were actually commission for his company, Insurance Management.

"There was an internal struggle in the company, and I end up getting the short end of the stick," he said.

He has attempted to show prosecutors evidence of what he says are holes in the police report but contends they

have turned him away.

"The police report in San Mateo has false and misleading statements made against me," Medrano said.

Guidotti declined to comment on specifics about the case, or about Medrano's comments.

Medrano is up for re-election in November. If this case has not been settled, he will probably not seek another four-year term, he said, "so it's not a distraction for the city." Otherwise, he plans on running.

If convicted of the felony, he would not be allowed to hold office.

City Manager Gary Napper declined to comment on the case Thursday.

Travelers sued Medrano in Contra Costa, and on Aug. 3, 2010, a judge awarded his parent company $87,000 in damages. His former client, iPass, also sued Medrano, for $79,000 in damages, serving him the lawsuit at a Dec. 7, 2010, Clayton council meeting. iPass claims its new CEO decided to change insurance brokers, discovered the discrepancy -- and went to police -- at that point.

The lawsuit has a status conference scheduled for Aug. 8. Medrano said iPass's former chief financial officer is testifying on his behalf and still uses his insurance brokerage for his new company.

"It's just unfortunate the damage it has caused me and my family," Medrano said. "My name has been dragged through the mud, but at the end of the day I will be exonerated and vindicated."

Contact Matthias Gafni at 925-952-5026. Follow him at Twitter.com/mgafni.

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