District attorney sues San Simeon manager over alleged illegal practices

September 29, 2021

By KAREN VELIE

The San Luis Obispo County District Attorney’s Office filed a civil suit on Tuesday alleging illegal business practices and false advertising against a company paid to manage the San Simeon Community Services District (CSD).

The complaint accuses Charlie Grace and his company Grace Environmental Services, which is paid to manage the district, of unfair and illegal business practices. The People of the State Of California filed the civil suit against Grace, Grace Environmental Services and Does one through 20.

Nestled along the coastline near Hearst Castle and the Piedras Blancas Light House, San Simeon is primarily a tourist destination. The home of 11 hotels, San Simeon has approximately 500 residents and a yearly district budget of almost $1 million for wastewater collection and treatment, road maintenance and street lights.

The district attorney’s nine causes of action include:

The San Simeon CSD pays Grace Environmental Services approximately $55,000 a month for managing and upkeep of the district, including weed abatement. However, after swapping out bookkeepers, Grace began submitting weed abatement invoices from third-party vendors for the district to pay while continuing to get paid for weed abatement through his contract.

At a CSD board meeting, San Simeon resident Hank Krzcuik “criticized the district’s job bidding process, stating the district was violating state laws.” Krzcuik was also critical of the scope of work Grace was performing for the district, including the apparent double billing for weed abatement.

“The Grace Environmental Services contract needs to be carefully reviewed and potentially re-negotiated in line with the actual services being performed,” Krzcuik wrote the CSD board.

Even though the law allows the public to criticize government, Grace threatened to sue Krzcuik for interference with business.

The complaint also alleges Grace violated the terms of his contract regarding facility maintenance expenses. Prosecutors accuse Grace of violating California’s Unfair Competition Law because he refused to allow the public to scrutinize invoices regarding the maintenance expenses.

When questions arose about his possible conflicts of interest, Grace allegedly lied to the board about communication with the California Fair Political Practices Commission, according to the civil suit.

“At the May 2017 board meeting, Grace failed to abstain from participating in discussions of whether the 2016 contract violated conflict of interest laws,” according to the civil suit. Grace knew, or should have known, that if a legal opinion found the 2016 contract violated California’s conflict of interest laws, the district’s board would likely need to take action that would result in either a modification or termination of the 2016 contract.”

Prosecutors accuse Grace of violating the California’s Business and Professions Code because he misled the public to believe he was the CSD’s general manager, according to the civil suit.

The civil suit accuses CSD officials of writing and publishing an article in the San Simeon CSD newsletter that misled district ratepayers into believing the district lost a grant because of false allegations made by the public. However, the National Fish and Wildlife Foundation rescinded the $125,000 grant because district officials failed to resolve areas of concern.

The SLO County District Attorney’s Office is asking the court to order San Simeon CSD officials to stop conducting unlawful and fraudulent acts of unfair competition, and to stop making untrue or misleading statements. Prosecutors are seeking civil penalties of $2,500 for each act of unfair competition and for each false or misleading statement, in addition to court and investigation costs.


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obispan

Charlie Grace and Paavo Ogren are both criminals that should be prosecuted.


ajdury

I am just flummoxed on how the legal firm of Nossaman (Grace’s legal team) can come out saying Charles Grace is absolutely NOT the GM of the San Simeon CSD (they issued a letter stating this) and yet their VERY OWN contract with Grace clearly names Charles as the General Manager of the CSD.


Attorney’s perfecting their craft of racking up exorbitant legal fees WHILE talking out of both sides of their mouth.


Charles *Dis* Grace and his legal dream team at Liars, Cheaters & Cads, ESQ.


2015 Letter from Nossaman, ESQ


The DA’s supplemental letter to the charges being filed.


“During the investigation, our office has spent a considerable amount of time with Mr. Grace’s attorneys attempting to understand the scope of duties Mr. Grace owed to the District as its General Manager. This inquiry was prompted by the following statement from Mr. Grace’s attorneys:


Importantly, we note that Mr. Grace is not ‘both General Manager of San Simeon Community Services District and … the principal of Grace San Simeon Communities Services District Environmental Services, LLC.’ Mr. Grace’s firm, GES, is under contract by the San Simeon Community Services District to perform facilities and operations management, which includes some General Manger duties. Mr. Grace himself is not now, nor has he ever been, SSCSD’s General Manager as defined by the Community Services District Law.”


Now if we could just get our hands on the actual letter Nossaman wrote to the DA’s office, and not just a quoted snippet or two.


It’s so unfortunate that people like Julie Tacker and Hank Krzcuik get pilloried and/or verbally abused by Gwen Kellas (the SSCSD Board Chair) and Mike Hanchett (the *unofficial* sixth member of the SSCSD Board) because their community activism exposes the seedy happenings in San Simeon.


Do better, San Simeon Community Services District directors. Let loose the albatross that is Charles Grace and his personal assistant, Cortney.


fish

post the file complaint


OnlyinSLO

Wow, this is a first. The DA’s office sat back and did nothing about Adam Hill, did nothing about the conduct of Adam’s wife, nothing about about the conduct of the former police chief in SLO, same for Paso Robles, the Cambria CSD Board’s misconduct, the blatant issues of top level officials at the IWMA and the other agency personnel who not only allowed the conduct, but assisted in it. The only difference is Grace is from out of the area and the rest of the cronies live in SLO County and work for government directly. So, if you live in the area and work for the government it’s a license to steal.


kayaknut

Also, the DA did nothing while John Wallace stole millions in the South County, seems odd to all of sudden care about public agency theft, is his reelection coming up?


exWGemployee

I was just coming on here to say the same thing – sounds EXACTLY like a John Wallace stint!

Man, this county is full of creative “businessmen”.


obispan

John Wallace will always reign supreme as the king of corruption.


kayaknut

So Grace Enviromental Services has been getting $55,000 a month and the penalties they are seeking is $2,500 per act? Is Grace Environmental still receiving its $55,000 a month, if this drags on for a few months which is likely it almost seems Grace Environmental will still end up making more than they are fined.