County Police Department investigating contract discrepancies

Health department employee set up company under pseudonym; won millions in contracts

By Gloria Lloyd

The St. Louis County Police Department is investigating how a county Department of Health employee set up a computer company under a pseudonym and won millions of dollars in county computer contracts.

The amount of money awarded to the company, Gateway Technical Solutions, could total in the millions, said county Police Chief Tim Fitch, although other county officials disputed that number.

The county awarded at least $1.5 million in contracts in the last three years to Gateway, which actually provided some services under its contract. The department did not realize the company was registered with the state under a fictitious name by one of the department’s top officials, Administrative Manager Edward Mueth.

Mueth killed himself Sept. 19, the night before he was due to meet with Department of Health Director Dr. Dolores Gunn and county Chief Operating Officer Garry Earls to discuss discrepancies Gunn had discovered in contracts awarded to Gateway. Mueth was the division manager of administrative services, one of eight division directors in the department, the layer of administration below Gunn’s position.

“The thing that I would want to leave with folks the most is: Most people say, ‘How could this happen?’ But when you have what is obviously a very well-planned, well-thought-out scheme meant to defraud, it’s kind of hard to catch that kind of white-collar crime,” county spokeswoman Pat Washington said. “He was a very high-ranking employee, so it just makes it more difficult to try to guard against it.”

Mueth’s company was registered with the state under a false name, “David Neff,” she added. He had worked for the department for nine years and risen through the ranks after initially being hired as an information technology specialist.

Although Mueth made an annual salary of $86,000, the department discovered after he died that he owned a $1.2 million house in Webster Groves with an annual property tax bill that was more than $20,000.

The county has had money go missing before, but what sets this case apart is the official’s high rank and the fact that his dummy company actually did provide at least some of the services for which it had invoiced the county. In his role at the health department, Mueth was in charge of invoicing his own company.

Health department workers noticed discrepancies and alerted officials, but the investigation will determine if that could have happened quicker or sooner, County Executive Charlie Dooley added. The investigation might be turned over to the FBI, he noted, and it is not known how long the investigation might go on.

Investigators are looking into whether any other county employees were involved in the scheme, Gunn added.

Mueth was able to use his position and inside knowledge to win the contracts from the county, Washington said. Although his company won the contracts as the low bidder through the procurement division, Mueth oversaw his own company’s contract and approved invoices, payments and managed the budget in his division, she added.

Some of the contracts with Mueth involved setting up electronic health records and handheld computers for doctors to access patients’ medical records, Washington said.

Although Mueth’s company did perform at least some of the services it was contracted to, such as the lease of laptops, it remains to be seen whether the county was overcharged or not provided with other goods and services.

“The equipment is there, the software is there, the maintenance is there, so some things were actually done,” Dooley said. “To what extent, we don’t know. It wasn’t somebody that just came in yesterday … He (was) a trusted employee, and for whatever reason something went wrong.”

Computers can be mailed away for service and county bids and service orders can be placed online, all of which may have further helped Mueth carry out the scheme since no physical worker would have had to be present at the department, Washington added.

“It’s one of the issues in any governmental agency or private entity — you can put all the safeguards you want in, have good people, (and) for whatever reason, good people do bad things. It happens,” Dooley said. “And what we’ve got to figure out is what happened, what the extent of it (is) and what safeguards can we put in or how can we address it moving forward.”

If turned over to the FBI, the Mueth case would be one of several FBI investigations into county contracts, including one related to a subcontracting company co-owned by former St. Louis County Police Board Chair Gregory Sansone. In that case, Dooley disputes that Sansone’s company violated the County Charter since it was a subcontractor on the police’s new crime laboratory, not a contractor. Dooley acknowledges that the payments to Mueth’s company are a clear violation of the County Charter, which prohibits contracts from being awarded to county employees.

Mueth oversaw facilities for the health department and played a key role in the construction of the department’s new headquarters in Berkeley, working 12 to 14 hours a day while the building was being finished, Washington noted.

“He worked nights, he worked weekends,” she said. “He was really a dedicated employee.”

The county is insured against theft and fraud, and the county’s legal team will pursue any method available to get any stolen money back, Washington said, including insurance claims or claims against Mueth’s estate.