Washoe County official charged with embezzlement

RENO -- An arrest warrant has been issued for a Washoe County water engineer accused of embezzling millions of dollars from the county water division and gambling more than $1 million at a Sparks casino.

Paul Constantine Orphan, 54, is charged with multiple counts of grand theft involving $2.2 million. But authorities say total losses could reach $6.4 million.

Orphan is accused of forming two bogus companies to sell county water well capacity rights he did not own. The money came from the water utility enterprise fund where water bill payments from 18,000 ratepayers and developer fees are deposited.

Officials say Orphan's transactions began in May 2006 when he was authorized to investigate well capacity supply purchases from Tessa and Calamount developments on Mount Rose Highway south of Reno.

Rosemary Menard, county water resources department director, said $6.4 million in transactions are being reviewed.

After Bill Hutchins, county finance director for the water resources department, found evidence that Orphan appeared to be embezzling funds, employees informed him about Orphan's frequent gambling at John Ascuaga's Nugget, according to court transcripts.

A county employee's relative who works at the casino told her that Orphan frequently gambled there, and records show he got spa treatments and concert tickets at the Nugget.

Authorities said Orphan gambled at least $1.1 million at the Nugget during a recent 12-month period.

In late March, a clerk processing bills told Hutchins that Orphan had approved a request to purchase well capacity rights without permission. Orphan had the authority to override the computer system to approve emergency purchases for things such as fixing a broken water line.

In this and other incidents, authorities alleged that Orphan "hijacked" the identities of his supervisors to approve bogus transactions. On purchases higher than $5,000, Orphan needed permission from Hutchins and Menard. For purchases higher than $25,000, the county's purchasing department must approve.