Nye Sheriff’s Office: Valley CEO arrested
UPDATE 7:15 a.m.: Valley Electric Association’s Chief Financial Officer Steve Morrison has been named acting chief executive of Valley by board Chairman Ken Derschan, according to Mike Hengel, Valley Electric vice president of corporate communications.
Valley’s board of directors is meeting on Wednesday to launch an investigation and review Angela Evans’ arrest. The full board is expected to vote in favor of Morrison’s appointment, Hengel said.
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UPDATE 9:30 p.m.: The Nye County Sheriff’s Office announced the arrest of Valley Electric CEO Angela Evans on Tuesday evening,
In a video release from the sheriff’s office, it was stated that Evans was booked into the Nye County Detention Center and charged with embezzlement.
The sheriff’s office executed a search warrant on Feb. 22 and collected financial and administrative records. In the video release, it was stated that the sheriff’s office was investigating Evans and Valley’s board of directors.
“During the course of this investigation, a source came to the Nye County Sheriff’s Office investigators and advised that CEO Angela Evans had Valley Electric do approximately $89,000 worth of work at her home to move her power lines underground,” according to the video release. “It is alleged that she billed the work to Valley Electric,” the release stated.
The source said the work was done in April 2018, “and was able to provide work order information and names of Valley Electric employees who knew of the work being done,” according to the release.
“Nye County Sheriff’s Office investigators interviewed a Valley Electric employee who confirmed that the work was done, but was unable to confirm how the work was paid for,” according to the video release.”
“A check of public records revealed an address of a home owned by Angela Evans in the Winery area of Pahrump. Nye County Sheriff’s Office investigators went to the property on February 26 and took photographs. Her property is the only residence on the block that does not have power lines along the back easement of the property,” the release stated.
“The Nye County Sheriff’s Office executed a second search warrant on Valley Electric on Feb. 26. The warrant requested electronic records of any and all work orders for CEO Angela Evans’ residence. After execution of the search warrant, the records identified that the cost of the work, valued at approximately $75,000, was not paid for by Angela Evans but was billed to the Valley Electric cooperative,” the release stated.
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UPDATE 7 p.m.: Valley Electric Association CEO Angela Evans was arrested Tuesday evening, Nye County Sheriff’s Office Lt. David Boruchowitz confimed. Updates coming.
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UPDATE: 5 p.m.
Details of the allegations against former CEO Thomas Husted and other employees at Valley Electric Association have emerged since a search warrant was executed on Friday by the Nye County Sheriff’s Office.
The warrant’s accompanying affidavit outlines allegations of a large cover-up of the former CEO’s sexual misconduct that included payoffs to former and current employees — accusations that Valley Electric denies.
In a video news release from the sheriff’s office, Sergeant Adam Tippetts said that “the warrant stems from an investigation into allegations that former CEO Thomas Husted has sexually harassed a female employee and that Valley Electric key management were paid in exchange for not disclosing the sexual misconduct.”
Efforts to reach Husted have been unsuccessful. Husted left the co-op in May 2018, according to a news release from Valley. The board of directors announced Husted’s retirement at that time in the release.
Investigators with the sheriff’s office stated that they were searching for administrative and financial records in the video release. According to Tippetts, allegations include that “cooperative monies were used as hush money to paid employees and former employees to ensure the sexual misconduct was covered up.”
Tippetts said that “it is suspected that the financial payouts may have contributed to the recently announced Valley Electric rate hikes.”
As of the time of publication of this article, no one had been charged with any crimes.
Valley responds
Valley Electric released a statement on Friday denying many of the accusations.
“VEA is unaware of any evidence of criminal conduct by any current or past employee of VEA related to the matters discussed in the affidavit,” a news release from Valley on Saturday, the day after the search warrant was executed, stated. “As a result, the allegations in the affidavit are unfounded.”
Valley also responded to the allegation that the cover-up situation contributed to the recent announcement of a 9 percent energy rate increase for residential customers and implemented a $5 adjustment to the co-op’s basic service charge, increasing it from $15 to $20.
“In addition, as noted in a press release, dated Feb. 14, 2019, posted on VEA’s website, the rate increase was driven primarily by VEA’s increasing cost of service over the past 10 years since the last permanent rate increase,” Valley’s news release on Saturday stated.
A temporary rate reduction of 9.9 percent in anticipation of the sale of Valley’s 230-kilovolt transmission line sale was also reversed in 2017, according to a news release from Valley.
Search warrant
According to information in the search warrant application, a resident in the community contacted the sheriff’s office and requested a meeting. That resident stated that the reason for the rate increase “was because of an extensive financial cover-up of sexual misconduct perpetrated by Thomas Husted, the prior CEO, on a female employee.”
“During this interview, this individual provided detailed information regarding financial payments made to Thomas Husted and numerous other administrative employees of Valley Electric who had knowledge of the misconduct as ‘hush money’,” the application stated. “It was reported that these individuals signed a nondisclosure agreement and received a substantial sum of money as severance pay and other unknown benefits to prevent them from discussing what they knew.”
Additional interviews were also conducted with prior Valley employees, according to the document.
VEA Search Warrant by Pahrump Valley Times on Scribd
“These interviews provided information substantiating the allegations that this female employee had been sexually harassed by Thomas Husted, and that Thomas Husted had been brought in, received a severance and is no longer the CEO,” the document stated.
The document continued, stating that the employees interviewed “acknowledged that they had received payment and signed nondisclosure agreements.”
Tippetts said that “additionally, the investigation revealed allegations that these employees signed nondisclosure agreements and were paid substantial amounts of money and provided additional unknown benefits.”
The application and affidavit for search warrant stated that “these interviews revealed that the victim of the sexual harassment was also promoted during the encounters as a means of controlling or coercing her into acceptance of the advances by Thomas Husted. These interviews revealed that it was believed to be in excess of one million dollars of Valley Electric members’ monies that were used to ensure this misconduct was not revealed to anyone.”
Also in the affidavit, it was stated that “these interviews also revealed that Angela Evans, the replacement CEO, additionally received substantial payment and was involved in the handling of payments and nondisclosure agreements to the other employees. These interviews also revealed that Angela Evans was also paramount in ensuring that the information of this misconduct was not leaked.”
In Valley’s response to the allegations, Evans was noted saying in a news release that “she had no knowledge of the allegations before reading the affidavit, and as far as she knew, neither did any other employee.”
Valley also stated that that Valley’s “board of directors ordered a transitional audit of financial activities (i.e., cash activity and expenditures) for the period of January 1, 2016 to July 31, 2018.”
“A forensic review of VEA’s financial activities was critical in order to have an absolutely clear financial picture of VEA,” said Evans in the news release.
According to the release “the independent, third-party audit, performed by financial firm Hinton Burdick, found no wrongdoing or mismanagement of funds – including the funds resulting from VEA’s 2017 transmission sale.”
As of the time of publication, a representative from Hinton Burdick had not been reached for comment.
Sheriff’s office responds
The Nye County Sheriff’s Office refuted many claims in Valley release, as well as several statements made in a separate release from Valley’s board of directors.
According to Valley’s release, “sheriff’s investigators expressed surprise on Friday when informed of the existence of the audit letter—even though it had been distributed to Pahrump press on Feb. 14 and had been posted on the VEA website for more than a week.”
“This is not an accurate statement,” according to a video statement released by the sheriff’s office on Monday.
“Although individual staff on-scene might not have known, the Nye County Sheriff’s Office investigators were well aware of the audit that Valley Electric had conducted,” according to the video statement.
A reporter from the Times also reached out to the sheriff’s office on another statement made by Valley on how the search was handled.
“Valley Electric officials were kept in the dark regarding the reasons for the search for more than five hours,” Valley said in its news release. “Employees were detained in conference rooms while the search was being conducted. One by one, employees were released from the rooms, guarded by deputies, and questioned by investigators. Requests by Valley Electric CEO Angela Evans to contact counsel were denied until approximately 1:30 p.m. VEA is investigating whether the search violated Nevada law and the constitutional rights of those who were detained.”
According to the video release from the sheriff’s office, officers arrived on scene at 8:32 a.m. Two minutes later, a copy of the search warrant was handed to Angela Evans by deputies, according to the sheriff’s office.
Sheriff Sharon Wehrly addressed all employees, who were all gathered in the conference room, at 8:37 a.m. “to outline the objectives of the search warrant and what was to be expected,” according to the video release.
The sheriff’s office also released body-cam footage of officers in the conference room. The sheriff’s office also refuted the statement that Evans was denied counsel until 1:30 p.m. Evans asked for counsel while the officers were still securing the building, according to the video statement.
“She was denied this request and told she would need to wait. The next time that investigators were aware that Evans wanted to speak to counsel, she was afforded that opportunity,” according to the video statement.
The sheriff’s office also argued the length of time Valley’s offices were closed was shorter than referenced in Valley’s release that stated the administrative offices were shut for approximately two hours on Friday.
“We have been assured by the lead investigator (Det. Jose Parra) that no one at Valley is under investigation,” said VEA CEO Angela Evans in their statement released on Saturday. “This investigation appears to involve former CEO Thomas Husted.”
According to a video statement from the Nye County Sheriff’s Office, the statement made about Parra was inaccurate.
“CEO Angela Evans, the board of directors and human resource and finance employees are under active investigation regarding the allegations at Valley Electric,” according to a statement in the video. “CEO Angela Evans stated this investigation appears to involve CEO Thomas Husted. This statement contains inaccuracies in the way it was presented. This investigation does involved former CEO Thomas Husted; however, the bulk of this investigation involves the allegations that CEO Angela Evans, current board of directors and possibly other Valley Electric employees were involved in the covering up of Husted’s misconduct by spending VEA monies to keep people quiet about the allegations.”
Anyone with information about the case can call the sheriff’s office at 775-751-7000 or email sheriff@co.nye.nv.us Tippetts stated in a video release that “the Nye County Sheriff’s Office staff is asking anyone with information regarding these allegations to contact detectives. Although many people may have signed the nondisclosure agreements, this has now become a criminal investigation. And as a witness in criminal proceedings, you are entitled to protections pursuant to law.”
The next update from the sheriff’s office is expected March 10. A news conference is planned for March 22, though the date and location are yet to be determined.
See more documents and video at pvtimes.com Contact reporter Jeffrey Meehan at jmeehan@pvtimes.com
Board of directors response
Valley Electric's board of directors released a response to the allegations surrounding former CEO Thomas Husted and alleged cover-up of sexual misconduct claims and the search warrant executed at the co-op's administrative offices on Friday.
"As elected members of the Board of Directors of Valley Electric Association, we would like to express our outrage at the unnecessary and likely unlawful search conducted Friday by the Nye County Sheriff's Office at VEA offices, 800 E. Highway 372," a news release from the board stated on Monday. Each board member from Valley's six districts were noted at the bottom of the release.
"We were shocked at the unprofessional manner in which officers treated VEA employees when initiating the warrant – the same officers to whom our employees show the utmost respect on a daily basis," the release continued.
In the release, the board maintains arguments made in an earlier release by Valley that the search violated Nevada law and the constitutional rights of those detained.
"We believe the heavy handed manner in which the search was conducted violated Nevada law, as well as the constitutional rights of those detained," the release stated.
Valley's administrative offices were closed at 8:45 a.m. and for the following two hours while deputies and detectives conducted "searches of cell phones, personnel files, payroll records, other financial files, email, texts and other correspondence," the release stated.
"Important member services were needlessly disrupted, and members were unnecessarily inconvenienced," the statement continued.
The board also express concerns that they were kept in the dark for more than five hours on the reason for the search, according to the statement. "Officers denied requests by VEA CEO Angela Evans to contact counsel until approximately 1:30 p.m.," the release stated.
"Innocent, law-abiding employees of VEA were denied access to outside communication and, as such, did not have access to legal counsel," the statement read. "Deputies even required detained employees to ask permission before using restrooms."
Board members also argued that no financial cover-up has occurred, pointing to "a recent forensic audit, which showed no financial irregularities," the release said.
"Further, we were appalled that detectives seemed unaware of readily available on-the-record facts that refute the claims in the affidavit supporting the search warrant, as well as their outright disdain for laws they were sworn to uphold," the release stated.
The board denied that recent rate hikes for Valley's energy customers were due to a cover-up and hush money.
"Since May 2018, VEA has been transparent about actions we have undertaken to control Cooperative costs," the board stated in their release. "Prior to that time, the Coop was on a financial trajectory that was quickly exceeding our financial capabilities. Our actions including the decision to increase rates has placed us in a better financial condition."
"It was no surprise to us to learn at the end of the day Friday that no current VEA employee is under investigation," the release continued.
The board also questioned "the motives of Sheriff Sharon Wehrly, whom we hold personally responsible for the unconscionable and unprofessional manner in which the search was conducted. We intend to pursue all legal options."
"Friday's events, unfortunately, speak to the media-obsessed environment in which the Nye County Sheriff Department operates on a daily basis," the release stated. "It's all about the cameras. This was at heart a publicity stunt instigated by a small group that is spreading a false narrative about the motives and actions of our cooperative."
The Nye County Sheriff's Office released a video statement on Monday refuting many of the claims made by the board of directors. Similar claims were made in a statement from Valley on Saturday, which the sheriff's office also refuted in its video.
Inside
See Page A8 as the VEA board explains inconsistencies involving rate stability assurances
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