Red flags missed as St. Louis County health official collected $3.4 million for his company

2013-10-04T06:30:00Z 2015-02-26T13:54:03Z Red flags missed as St. Louis County health official collected $3.4 million for his companyBy Steve Giegerich sgiegerich@post-dispatch.com > 314-725-6758 and Kevin McDermott kmcdermott@post-dispatch.com > 314-340-8268 stltoday.com

CLAYTON • A high-ranking officer in the St. Louis County Health Department used an alias and scores of bogus invoices to collect $3.4 million from the county over a six-year period that ended last month when the official killed himself as the scheme unraveled.

And emails obtained by the Post-Dispatch under the Sunshine Law show that county financial officers ignored red flags that pointed to the company Edward Mueth established to supply and maintain health agency laptop computers.

Meanwhile, an independent audit of county operations delivered to the County Council on Thursday revealed that contract limits with Mueth had been exceeded.

Records show for example, the $709,000 paid to Mueth’s company, Gateway Technical Solutions, in a single year, 2012, greatly exceeded the value of a three-year, $248,000 contract the county signed in 2011.

It is still unclear what goods and services the county received for the $3.4 million Mueth was paid.

In many instances the county approved the purchase or lease of laptops at prices that far exceeded what the same equipment would cost at a retail outlet.

The health department in 2012 leased 64 Fujitsu Lifebook S710 laptops from Gateway Technical Solutions for $2,790 each. Amazon.com currently lists the identical computer for $1,600.

The documents show officials in the offices of the county attorney, fiscal management, county clerk and county executive repeatedly approved the Gateway Technical contracts.

In many cases the signatures of top county officials can be found on the same page as the signature of David Neff, identified repeatedly as the owner of Gateway Technical Solutions. State records show Mueth registered David Neff as a fictitious name.

“It was inside job; he knew the system and he took advantage of it,” County Executive Charlie Dooley said Thursday.

Mueth, 39, division manager for administrative services, was found dead of a self-inflicted gunshot on Sept. 19 — a day after county officials said a problem with Gateway Technical invoices emerged during preparation of the 2014 health department budget. Mueth was to meet with county officials on Sept. 20 to answer questions about contracts with the company.

Records show that the nine-year health department employee with an annual salary of $86,000 had bought a $1.4 million Webster Groves home in 2010.

The St. Louis County Police Department is investigating the health department’s contracts with Mueth.

Documents show Gateway Technical raised concerns more than three years before Mueth’s death. Fiscal management employees in emails dating to 2010 repeatedly asked for additional funds to cover payments to Gateway.

Some internal emails suggest that Mueth intentionally circumvented the procurement and payment process. “... (I)t is not good practice to issue an amendment that doubles the amount of the items specified in the invitation for bid,” reads a portion of a 2011 email from a county financial officer.

Mueth at the same time was sending emails such as this: “Gateway Technical Solutions called to say they received the form and it (is) in the mail and on the way back.”

The independent audit released Thursday was conducted before the double life of Mueth was revealed.

It criticizes the county for its failure to identify a clear violation of the county’s conflict of interest policy by a “senior ranking employee of the health department.”

To prevent further oversights, the report recommends the “county improve its procurement procedures to ensure all new vendors are thoroughly vetted before awarding (a) contract.”

It was only after Mueth died that the county learned that Gateway Technical Solutions did not have a physical address, a website, an email address or a contact number other than one that connected to a cellphone. The company’s registered address with the state was a home in Rock Hill formerly owned by Mueth.

Dooley concurs with the audit’s conclusions. “Something failed in the system, and we’re going to correct that,” he said.

Dooley said he expects the county’s losses to be covered by insurance.

Mueth even filled out county performance reports on his company.

A division of procurement contract performance report dated Sept. 27, 2010, awarded the company the highest possible grades in eight categories ranging from the delivery of products and services to “employee courtesy” and “problem resolution.”

Mueth additionally asked that future Gateway Technical contracts include a “renewal option.”

And with that he signed and submitted the report to county procurement officials.

Christine Byers and Stephen Deere of the Post-Dispatch contributed to this report.

General assignment reporter Steve Giegerich covers St. Louis County. On Twitter @stevegiegerich

Copyright 2016 stltoday.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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