Ex-South County Sanitation District administrator’s trial moved to Santa Barbara County

The felony case against the former South County Sanitation District administrator accused of abusing his position for profit will move forward in Santa Barbara County following a court order Tuesday.

Wallace, 73, the former CEO of San Luis Obispo-based Wallace Group, has pleaded not guilty to four felony charges of conflict of interest and four misdemeanor charges of public official interference with government policy for financial gain.

A hearing scheduled for Tuesday was vacated after the court issued an order that the remainder of the case — including trial, if it goes that far — proceed in the Santa Maria branch of Santa Barbara Superior Court.

The order, which is not signed by any judge but was issued by the entire San Luis Obispo bench, assigns the case to Santa Barbara Superior Court Judge James Voysey.

Both Wallace’s attorney, Jeff Stein, and Deputy District Attorney Eric Dobroth on Tuesday characterized the change of venue as procedural and said the move has nothing to do with the merits of the case.

The court order, issued without argument from either party, comes following the appointment last month of new Superior Court Judge Matthew Guerrero.

Formerly a San Luis Obispo County public defender, Guerrero also previously served as the Oceano Community Services District’s representative on the Sanitation District Board of Directors.

Both Stein and Dobroth said Guerrero could be called as a witness in Wallace’s case, though the order does not state the court’s reasoning behind the venue change.

Stein and Dobroth said it is likely that San Luis Obispo Superior Court’s judges are seeking to avoid complications that could arise from presiding over a case in which their colleague is testifying, though neither knew for certain.

The case stems from Wallace’s 26-year stint as administrator for the South County Sanitation District as well his 20 years as contracted general manager for the Avila Beach Community Services District. Prosecutors allege that he used his positions with the public agencies to steer lucrative contracts to his business.

Wallace’s attorneys contend that the criminal charges are based on contracts and events that were publicly disclosed, reviewed and approved by district officials.

In January 2016, the District Attorney’s Office received a report drafted by Carl Knudson of Knudson & Associates and commissioned by the South County Sanitation District Board of Directors to investigate Wallace’s management practices while he was chief administrator of the district.

The report concluded that Wallace mismanaged the agency for close to a decade, and its board of directors voted in 2015 to send the report to law enforcement, including the local DA, the state attorney general and the FBI, to review for possible criminal charges.

It was during that investigation the District Attorney’s Office learned of Wallace’s involvement with the Avila Beach agency, the agency said in a previous news release.

Wallace remains out of custody on bail and is due in the Santa Maria courthouse Jan. 22 for a pre-trial hearing.

Correction: An earlier version of this article misstated Wallace’s title with the Wallace Group.

This story was originally published January 9, 2018 at 5:21 PM with the headline "Ex-South County Sanitation District administrator’s trial moved to Santa Barbara County."