SAN DIEGO - Former El Cajon City Councilwoman Jillian Hanson-Cox was sentenced to 30 months in prison Monday after she pleaded guilty to federal charges of mail fraud and filing a false tax return stemming from the embezzlement of $3.5 million from her Kearny Mesa employer.
Assistant U.S. Attorney Stephen Clark said Hanson-Cox took the money between April 2004 and November 2008 from Century Design, a maker of machinery for processing composite materials. Hanson-Cox worked as a controller for the company.
Outside court before the hearing, an employee of Century Design said they were "blindsided" by the embezzlement.
Hanson-Cox previously served as president of the popular Mother Goose Parade. The Mother Goose Parade hosted a parade of celebrities under Hanson-Cox's watch, including two brothers from the Brady Bunch, Mario Lopez and Tori Spelling. In a plea deal, Hanson-Cox admitted those celebrities were booked using stolen money.
As controller, Hanson-Cox wrote checks to herself and then used a bulk of the money on community causes like the parade.
"She was obsessed with good works, and when given a large task such as the El Cajon parade, she wanted it to succeed," said Charles Sevilla, Hanson-Cox's attorney.
Several people connected with El Cajon's annual Mother Goose Parade were contacted by the FBI during their investigation of the case.
While no mention was made during the hearing before U.S. Magistrate Judge William Gallo about the financially-strapped event, court records referred to payments she made to support "her community activities."
Assistant U.S. Attorney Rebecca Kanter said Hanson-Cox had faced up to 23 years in prison and a $7.1 million fine.
Hanson-Cox resigned her council post in March. In her resignation letter sent to El Cajon Mayor Mark Lewis on March 7, Hanson-Cox wrote, "Recent events have given rise to a burden and demands on my time that would possibly detract from the time necessary to continue my commitment to the city and my constituents."
According to court documents, Hanson-Cox wrote checks to herself, to credit card companies to pay her personal balances and to businesses for services or items for herself or to support her community activities. She was allowed to write company checks with just her name, but was not authorized for the personal uses, according to the documents.
The records indicate she also changed the payee of the checks when she entered them in company records.
The charged false tax return was filed electronically for the 2007 tax year. However, returns covering the tax years 2005-09 misstated her income, which shorted the federal government by $1.2 million, according to the court documents.
"I am dedicated to pursuing officials who engage in illegal activity, whether it is connected to their public office or private employment," U.S. Attorney Laura Duffy said in a statement after a hearing earlier this year. "While embezzling millions of dollars from CDI, former Councilwoman Hanson-Cox not only traded on her reputation as a public official, but also betrayed every citizen who expected her to act honestly in both her private and public affairs."
In federal court Monday, Hanson-Cox says what she did was "shameful" and knows she will have to live with it for the rest of her life.
"I wish the sentence were more severe," said Bob Basso, the former owner of Century Design.
Basso said Hanson-Cox's actions led to deep struggles for the company and no raises for workers.
"It's a sustained, vicious raid on the lifeblood of a small, trusting family company," he said. "I took no salary for several years just to run the company and keep everybody employed."
Hanson-Cox will surrender to federal prison in January. Her lawyers have requested that she serve her time at a minimum-security prison in Arizona. The Bureau of Prisons has yet to make its decision.