Krystle Marie Reyes Arrested For $2.1 Million Tax Refund Scam

One Oregon woman almost got away with a bogus $2.1 million tax refund.

Krystle Marie Reyes, a 25-year-old woman from Salem was arrested and jailed last week for filing a bogus tax return on $3 million in income, according to an affidavit obtained by the Oregonian.

Reyes got $2.1 million back on a prepaid debit card and went on a bit of a spending spree, shelling out $150,000 on a variety of things, including a decidedly not-extravagant 1999 Dodge Caravan, according to the affidavit. She bought a 1999 Dodge Caravan and tires, among other things. According to the affidavit, Reyes appears to have lied about her employer and wages instead of stealing someone else’s identity–an increasingly common way tax scammers are getting tax refunds.

Reyes got caught after reporting her debit card missing.

Tax fraud and tax-related identity theft are on the rise. More than 640,000 taxpayerswere affected by tax fraud last year, more than double the number of taxpayers affected the year before, according to statistics provided by J. Russell George, the Treasury Department’s inspector general for tax administration, and cited by the Wall Street Journal. The IRS received 2.2 million fraudulent tax returns last year, 940,000 of which involved identity theft, according to George.

A number of Americans have found themselves unable to file legitimate tax returns because identity thieves filed fraudulent tax returns for them first. Mike Bucalo Jr., 71, has to wait one more year for his tax refund because an identity thief stole it already, The Huffington Post’s Catherine New reported in April.

The IRS often has to pay tax refunds twice: once to the identity thief, and a second time to the legitimate recipient, according to the New York Times.

 

RIVERSIDE: Final arguments complete; jury now deliberating

A prosecutor argued Monday June 4 for jurors to deliver the death penalty to Earl Ellis Green for the murder of Riverside Police Officer Ryan Bonaminio, telling them, “Let the punishment fit the crime. Let the punishment fit the man.”

During an emotional 90-minute presentation, Deputy District Attorney Michael Hestrin reviewed the case for jurors, telling them “It is not enough to understand the crime. Now you have to understand the man.”

Hestrin said Green was a man who made choices and acted with cool rationality on the night of Bonaminio’s murder — taking the officer’s gun, fleeing in the truck he had stolen and driving it back to the truck rental lot from which it was taken so it sat among dozens of other trucks that looked just the same.

“Earl Green at this moment is a man in control of himself. He’s making rational decisions, one after the other, “Hestrin told jurors, calling the efforts by defense witnesses to say Green had mental problems that led him to commit murder “psychobabble.”

Hestrin ended his presentation with a slide show of Bonaminio’s life and his funeral.

Sobs could be heard in the courtroom, which was otherwise so quiet that the clock’s second hand could be heard ticking.

Hestrin told jurors the death penalty was right for Green because “he doesn’t care” that he killed the officer.

Deputy Capital Public Defender O.G. Magno will make the closing argument for the defense.

Superior Court Judge Jean Leonard told the eight-man, four-woman jury that she believes they will begin deliberations around noon.

The jurors must decide whether aggravating factors about Green’s current crime and those from his past presented during the penalty phase

Green was convicted of killing Bonaminio, 27, after a foot pursuit along the edge of Riverside’s Fairmount Park late on the night of Nov. 7, 2010, after a traffic stop. Green jumped from the big-rig cab he was driving and Bonaminio chased him. The officer did not know the rig was stolen.

Bonaminio slipped and fell while chasing Green, who then attacked Bonaminio with a solid metal dumbbell bar and beat him on the head. Green then gained control of the officer’s gun and shot him in the head.

Green’s attorneys conceded during opening statements of the guilt phase that their client had murdered Bonaminio, but they asked jurors to consider a second-degree murder conviction. The panel returned a first-degree conviction after a little more than two hours’ deliberation.

Bonaminio was a graduate of Riverside’s Ramona High School and an Army veteran of two deployments to Iraq.

 

RIVERSIDE: Medical marijuana proponents test legal maneuver

As federal authorities have cracked down on Inland medical marijuana dispensaries, including recent raids in Murrieta, Temecula and Lake Elsinore, one dispensary’s supporters tried an interesting gambit to keep it from happening to them.

Attorney J. David Nick is defending Riverside’s Inland Empire Patients Health and Wellness Center in a lawsuit filed by the city of Riverside that is now under review by the state Supreme Court.

In response to Riverside City Attorney Greg Priamos’ announcement that he and Police Chief Sergio Diaz had asked U.S. attorneys to help enforce the federal marijuana ban, Nick in March filed a writ asking the state Supreme Court to block the city from collaborating with the feds.

Nick said by phone Friday that Priamos and Diaz are seeking federal involvement as an end run around the state law allowing medical use of marijuana because they don’t agree with it.

In this way, he said, they are “trying to undo the will of the people of the state of California.”

“They seem to have thrown down the gauntlet to stop medical marijuana, no matter what device they may use,” he said.

His court filing says that, under the state constitution, California officials can’t use federal law as an excuse not to enforce a state law, unless an appellate court has ruled in agreement on the matter.

Priamos said in a Wednesday phone interview he had never seen such an approach before.

“This whole strategy is just absolutely ludicrous,” he said. “I don’t believe that any court would enjoin a local public official from notifying federal law enforcement agencies of violations of federal law.”

Priamos has talked with federal officials and will continue to, he said, but he would not disclose the nature of their discussions.

Since 2010, when the city began pursuing medical marijuana facilities in civil court on the grounds that they violate the zoning code, 35 to 40 dispensaries have closed and 10 to 15 remain, Priamos said.

On Wednesday afternoon, the state Supreme Court denied the writ, which Priamos said he expected.

Nick pointed out that the court didn’t give an opinion with the denial, which he interprets to mean the court isn’t addressing the merits of the writ and may still be watching the larger issue of federal involvement.

Priamos said initial briefs have been filed by both sides in the Supreme Court case, which is expected to decide whether local governments can ban marijuana dispensaries outright. The court may take oral arguments late this year or in early 2013.

The Inland Empire Patients Health and Wellness center remains open.

 

Bloody Kelly Thomas photos draw gasps in court from crowd

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Scruggs later went to UCI Medical Center in Orange to take more photos of Thomas that show lots of blood and injuries over his entire body.  When the photos were shown, gasps were heard from the crowd and one person left the courtroom.

“He was a  bloody mess,” said Register reporter Lou Ponsi, who viewed the photos.

On cross examination, Scruggs testified that Officer Manuel Ramos, charged with second-degree murder and involuntary manslaughter in Thomas’ death,  said: “That was the fight of my life.”

And, she said, Fullerton police Officer Joseph Wolfe said: “This guy wouldn’t stop fighting.”

The next witness was a paramedic who responded to the scene.

Fullerton fire Capt. Ron Stancyk said he arrived shortly before 9 p.m., responding to a call of a man down with police involvement.

He said he initially checked on a bruised police officer, and then noticed Kelly Thomas on the ground, leaning against an officer with his hands cuffed in front.

He said he noticed that Thomas was having trouble breathing. Paramedics loaded  the unconscious man into the amublance for a five minute ride to St. Jude’s Hospital.

While in route, Thomas’ heart stopped beating. At the hospital, they were assisting his breathing and performing CPR. They eventually restored his heart beat and he was transferred to UCI Medical Center.

The judge declared a recess shortly after 10:40.

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Previously reported:

SANTA ANA – Tony Rackauckas, Orange County’s elected district attorney, is expected to stand before a judge at the conclusion of a preliminary hearing next week and ask that two Fullerton police officers be put on trial for the beating death of a homeless man last summer.

That’s significant news for two reasons.

First, it is the first time in Orange County history that a police officer faces a preliminary hearing on a murder charge for actions that occurred while on duty and in uniform.

Second, it is Rackauckas himself who will be handling the prosecution inside the courtroom. Usually, he is represented in court by one of his deputies.

But Rackauckas has been in court with Senior Assistant District Attorney Jim Tanizake for most of the prior appearances in the prosecution of police officers Manuel Anthony Ramos, 38, and Jay Patrick Cicinelli, 42, since he made the decision in September to file felony homicide charges in the July 5 beating death of Kelly Thomas, 37.

Ramos, who is free on $1 million bail – one of the highest bails ever posted in Orange County, is charged with second-degree murder and involuntary manslaughter. He was a 10-year veteran of the Fullerton Police Department.

Cicinelli, free on $25,000 bail, is charged with involuntary manslaughter and excessive force under color of authority for his role in helping subdue Thomas.

‘See my fists?’

Rackauckas contends that Ramos triggered the deadly exchange when he snapped on a pair of latex gloves, leaned over Thomas in a menacing manner and made two fists before telling the homeless man, “Now, see my fists? … They are getting ready to f— you up.”

And Rackauckas argues that Cicinelli, a 12-year Fullerton officer, fired his stun gun four times into Thomas, then smashed him in the face eight times with it after Thomas became nonresponsive.

Many current participants in the Orange County criminal justice arena remember Rackauckas as the Orange County judge who became the first outsider to win election as the district attorney of Orange County in 1998. But some old-timers also remember his days as trial prosecutor on the homicide team who won convictions of more than two dozen murderers in the 1970s and ’80s.

He persuaded Orange County juries to recommend death sentences for convicted killers Michael Seton Thompson and John Galen Davenport. Thompson’s death penalty was eventually reversed on appeal, but Davenport has been on death row longer than any current Orange County inmate.

Rackauckas also obtained murder convictions and life sentences for two men, Ronald Ewing and William Gullett, for kidnapping and murdering the wife of a Los Alamitos grocery store manager during a botched ransom plot where the manager was supposed to get money from the store safe. One of the defense attorneys in that case was John D. Barnett, one of Orange County’s best criminal defense lawyers, who is now defending Ramos.

Barnett and Rackauckas started their legal careers about the same time in the early 1970s – Barnett in the Public Defender’s Office and Rackauckas in the District Attorney’s Office. They have a mutual respect, and now they are set to battle it out in the courtroom in one of Orange County’s most high-profile cases in a decade.

Not overly dramatic

“Tony … has a natural ability to grasp complex factual/legal issues and explain them in plain, persuasive prose. This makes very effective in front of juries,” Barnett said recently. “He is not slick or over-dramatic.

“There is a calm ferociousness to his advocacy,” Barnett added. “He does not lose his temper, but you know he is angry. He does not belittle his opponent, but you know he thinks little of his opponent’s case.”

While Barnett respects his opponent, he told reporters after earlier court appearances that he expects charges will be dismissed after the preliminary hearing, which is scheduled to start Monday.

A preliminary hearing is the first step in the justice system, in which a magistrate or judge evaluates the evidence. In a preliminary hearing, the judge is asked to decide only two things: Was there a crime, and is there a reasonable belief that the person charged committed the crime?

It is a relatively minor burden of proof for a prosecutor compared with what he must prove at trial – guilt beyond a reasonable doubt.

Although almost every defendant is ordered to stand trial after a preliminary hearing, Barnett says the prosecution will not be able to meet the burden of proof in the Ramos case.

“There is insufficient evidence to prove the charges against my client,” Barnett says. “There is no theory of facts upon which a murder charge be sustained.

“The acts of my client were reasonable and appropriate under the circumstances, not to mention that he was not the cause of death,” Barnett added. “My client confronted a non-compliant suspect … (and) used only that force that was necessary to restrain Kelly Thomas. He did what he was required to do and nothing more.”

Ramos faces a potential sentence of 15 years to life if convicted of second-degree murder. A jury could also find him guilty of the lesser crime of involuntary manslaughter, which carries a maximum sentence of four years in prison.

Cicinelli faces a maximum sentence of four years in prison if convicted.

 

Westminster budget layoffs will slow police, other services

WESTMINSTER – Residents will soon see slower response time to police calls, delays in building permits and inspections and many other reductions in city services.

The community got its first look Friday night at how proposed municipal government layoffs will affect city services. And the picture is grim.

Festivals and parades will be eliminated. The “City Hall at the Mall” satellite will shut down. And talking to a live person on the phone or at City Hall will get a lot harder, with fewer employees to staff the front counter.

Faced with a $10.5 million deficit, the city is looking to cut 68 employees, increase dozens of fees, consider new taxes and look at outsourcing services.

“All remaining staff will be stretched in ways they haven’t been stretched before,” Assistant City Manager Eddie Manfro told the City Council during Friday’s study session.

Every day the city delays the layoffs and early retirements, is costing $29,000, City Manager Mitch Waller said. If nothing is done, the city will be broke by 2014.

The Police Department will be among the hardest hit in the plan to stave off insolvency.

Though city officials stress they are not laying off any sworn personnel, they are leaving four positions vacant and a fifth officer is taking an early retirement. Those positions will not be filled and the department will not be able to hire new officers to replace anyone else who leaves, Police Chief Ron Coopman said.

Under the proposed fiscal stabilization plan, the number of officers would be reduced to 88. Five or six years ago, Westminster police had 105 sworn officers, Coopman said.

The department faces the loss of 23 full- and part-time personnel, Coopman said. The impact of the losses will directly affect residents and include:

•A general increase in response times to all calls for services and a “potential for drastic delays” in lower priority calls.

•Police will no longer perform routine crime scene investigation functions.

•Only major crime scenes will be processed.

•Victims may see their cases not investigated “in a timely manner and some cases possibly expiring under the statute of limitations.”

•Increased processing time and customer wait times for parking complaints, while hearings related to parking will shift to sworn personnel, resulting in delayed response to calls and increased overtime.

•Three code enforcement officers will be switched to the department and work under police supervision.

•The department’s front lobby hours will be reduced during weekdays and closed on Saturdays.

•The lobby window will not be staffed and all phone calls will see an increase in “hold time.”

The impact of the layoffs on the department is “significant,” Coopman said after the study session.

The layoffs also are expected to affect services in other departments, including the planning and building divisions, where plan checks, inspection requests and permit applications may take twice as long, calls may not be answered in person and staff at the counter will decrease from nine hours a day to five hours a day. Some of those jobs, particularly inspections, may be outsourced when the demand is high, officials said.

An overflow crowd filled the council chambers and a handful of residents spoke to express their concern about the cuts.

“My main concern is the safety of my kids,” said resident Mark Miller. If the sworn officers are busy filling in with other tasks, “who is patrolling the streets?”

Diana Lee Carey, a city traffic commissioner, questioned the pairing of code enforcement with police and the loss of the police chief’s secretary position. She also said that the city will end up paying more for police in the long run if so many layoffs are implemented: “You are not going to gain anything if you have to pay them overtime,” she said.

The city has been facing a $1.5 million deficit annually since the recession began in 2008, Waller said. This year, the financial situation was compounded by the loss of redevelopment revenue, when the state abolished all redevelopment agencies. Unlike most other cities that have pockets of their community under redevelopment zones, the entire city is under a redevelopment area. Westminster officials used redevelopment money to partly pay salaries.

Councilman Tyler Diep said the city was used to living beyond its means. “We don’t have that luxury anymore,” he said.

Waller, the city manager, said cuts were made across all departments. Future projects, some already in the pipeline, could be jeopardized, he said. And city staff is looking into finding new revenue through a new tax, such as utility or sales tax increase.

Mayor Margie Rice said she would have wanted to see more salary reductions and she questioned why there are three top management positions: city manager, assistant city manager and assistant to the city manager. “I think we’re overloaded on the top,” she said.

The assistant to the city manager position was created last June as an administrative position and “not a top level management position,” Waller said Saturday. And the assistant city manager post also was created last June, combining two department heads: human resources and finance director jobs. Under the proposed plan, Manfro, the assistant city manager, will also take on the duties of the community development director, who is scheduled to be laid off.

The City Council is scheduled to meet again and possibly vote on the proposed layoffs at 7 p.m. Wednesday.

 

Kelly Thomas death investigator delivers findings

FULLERTON – An independent consultant hired by the city to probe into the death of Kelly Thomas has delivered his findings to the acting police chief on the internal-affairs phase of his investigation.

The second of three reports conducted by Michael Gennaco, chief attorney for the Los Angeles Office of Independent Review, focuses on the actions of the officers involved in the fatal confrontation with the unarmed mentally ill homeless man on July 5.

But because the report deals with personnel issues, only Capt. Dan Hughes, the acting police chief, has been privy to its findings. Thomas died from his injuries five days after the confrontation.

Hughes would not comment on specifics of the report, including what actions might be taken by the department against the officers and even when he received the report. It is unclear whether the report will ever become public.

“I don’t know that I will be able to (comment),” Hughes said.

Said City Attorney Richard Jones in a statement: “In accordance with applicable personnel procedures, Acting Chief Hughes will be preparing any appropriate notices to affected members of the department.”

Meanwhile, the criminal case against two officers charged in Thomas’ death moved forward with the preliminary hearing scheduled for Monday at Orange County Superior Court in Santa Ana.

The District Attorney’s Office has charged Officer Manuel Ramos with second-degree murder and involuntary manslaughter and Cpl. Jay Cicinelli with involuntary manslaughter and excessive force. Both officers, on unpaid leave, have pleaded not guilty.

Prosecutors say Thomas, 37, was beaten and suffocated when confronted by officers in the Fullerton Transportation Center. Thomas had been suspected of burglarizing cars when approached by the officers.

In his initial report to the City Council in February, Gennaco offered suggestions on how to handle information releases with future major incidents. He pointed out that at one point Fullerton police said some of their officers may have fractured some bones during the incident. That turned out to be untrue.

“Do your best to make sure that information is accurate,” Gennaco said in February.

A third report – an examination of the department’s overall policies and procedures – is still pending and will likely be presented at an upcoming council meeting similar to the first report, according to city officials.

“He has a very strong reputation of being thorough and direct and providing straight forward recommendations,” Hughes said of Gennaco. “And I expect him to do the same in this case.”

 

RIVERSIDE: Woman in court in murder, arson case

The Riverside woman accused of arson, murder and elder abuse in the deaths of her parents is scheduled to be arraigned Thursday in Superior Court in Riverside.

The 8:30 a.m. arraignment in Dept. 41 for Deborah Marie Clark, 46, was postponed from last week at the request of the defense so she could be examined by a psychiatrist and doctor. Family members say Clark is developmentally disabled and has the mental capacity of a 6-year-old.

A half hour after talking with Deputy Public Defender Christine Juneau for about 10 minutes court last week, Clark did not appear to understand that Juneau is an attorney.

Harley Clark, 75, died in the April 20 fire, and his daughter was charged with murder. Linda Clark, 73, died April 27. Riverside County district attorney’s spokesman John Hall said Wednesday morning that a decision on whether to file a second murder charge had not been made.

 

Man in $5.5 million gold scheme facing 130 years in prison

SANTA ANA – A fugitive who was arrested with a book entitled “How to Be Invisible” and later convicted of defrauding an elderly Laguna Niguel couple of $5.5 million in a gold mining scheme is expected to be sentenced in federal court here Monday afternoon.

An Orange County jury late last year found John Arthur Walthall, 56, of La Habra, guilty of four counts of wire fraud and one count of failure to appear, the FBI said.

Evidence presented at trial showed Walthall purportedly created a partnership to fund the extraction of gold from abandoned mines, telling the couple in their 80s he had conducted research on the gold mining process for 20 years, according to an FBI news release.

Prosecutors argued Walthall transferred the partnership funds to 27 separate bank accounts through which he spent the money, without the couple’s knowledge or approval, on personal items, including paying off vehicles, part of a $250,000 loan he received from a former fiancée, buying a hyperbaric oxygen chamber estimated to be worth $60,000, and paying for his child’s rent payments and $10,000 tuition for a film school, the FBI said.

Walthall remained a fugitive for a short time and was arrested on July 26, 2011, in Mesquite, Nev., under a false name, evidence introduced during the trial revealed. He faces a maximum statutory sentence of 130 years in federal prison, the FBI said.

 

SHERIFF TO START REFUSING CERTAIN SUSPECTS

Sheriff Bill Gore has sent a letter to local law enforcement agencies telling them that beginning Tuesday his department will no longer accept bookings of suspects accused of certain misdemeanors because the jails are nearing capacity.

The change comes seven months after a state law went into effect that allowed some lower-level felony offenders convicted of nonserious and nonviolent crimes to serve their sentences in county jail instead of prison.

Known as public safety realignment, the law was intended to help close a state budget gap and relieve prison overcrowding that the U.S. Supreme Court has ordered California lawmakers to fix by mid-2013.

Now, the crowding problem is shifting to the counties, including San Diego, where some jails are at or nearing capacity.

“We are very concerned that shifting the State’s responsibility to incarcerate felons to the local level is creating safety risks to our communities,” San Diego City Attorney Jan Goldsmith said in an email Friday.

His office prosecutes misdemeanor cases. Goldsmith blamed what he called a “dysfunctional” Legislature and governor for shifting their problems to local governments rather “than take action to cut their unnecessary spending.”

In January, Gore authorized early releases for some inmates, who were serving time on nonviolent offenses, citing an “immediate need to create bed space.”

Then, in an April 17 letter, Gore said the county’s booking criteria needed to be changed because realignment was causing the jail inmate population to swell almost to the limit.

As of Friday, 4,922 inmates were being held at seven detention facilities, according to the Sheriff’s Department website. Maximum capacity, which is set by the courts, is 5,600.

“This was a change that was always one of our strategies,” said sheriff’s Capt. Billy Duke of the department’s detentions support division.

This past Monday, the jail population included about 200 inmates who were being held on misdemeanor charges while their court cases were pending, Duke said.

Sheriff Bill Gore has sent a letter to local law enforcement agencies telling them that beginning Tuesday his department will no longer accept bookings of suspects accused of certain misdemeanors because the jails are nearing capacity.

The change comes seven months after a state law went into effect that allowed some lower-level felony offenders convicted of nonserious and nonviolent crimes to serve their sentences in county jail instead of prison.

Known as public safety realignment, the law was intended to help close a state budget gap and relieve prison overcrowding that the U.S. Supreme Court has ordered California lawmakers to fix by mid-2013.

Now, the crowding problem is shifting to the counties, including San Diego, where some jails are at or nearing capacity.

“We are very concerned that shifting the State’s responsibility to incarcerate felons to the local level is creating safety risks to our communities,” San Diego City Attorney Jan Goldsmith said in an email Friday.

His office prosecutes misdemeanor cases. Goldsmith blamed what he called a “dysfunctional” Legislature and governor for shifting their problems to local governments rather “than take action to cut their unnecessary spending.”

In January, Gore authorized early releases for some inmates, who were serving time on nonviolent offenses, citing an “immediate need to create bed space.”

Then, in an April 17 letter, Gore said the county’s booking criteria needed to be changed because realignment was causing the jail inmate population to swell almost to the limit.

As of Friday, 4,922 inmates were being held at seven detention facilities, according to the Sheriff’s Department website. Maximum capacity, which is set by the courts, is 5,600.

“This was a change that was always one of our strategies,” said sheriff’s Capt. Billy Duke of the department’s detentions support division.

This past Monday, the jail population included about 200 inmates who were being held on misdemeanor charges while their court cases were pending, Duke said.

The average length of time they spend in custody is 13 days.

Those inmates would not have been booked at all under the criteria that takes effect Tuesday, Duke said. Instead, they would be cited and notified when to appear in court.

The Sheriff’s Department would not immediately provide copies of the old and new booking criteria for comparison this week, but U-T San Diego obtained a copy of the revised rules. They show that suspected offenders will continue to be jailed for misdemeanor crimes including driving under the influence of alcohol or drugs, domestic violence offenses and violations of sex offender registration requirements.

It also gives watch commanders, who serve as shift supervisors at the various law enforcement agencies, some discretion when seeking to book misdemeanor offenders.

In his April letter to police chiefs, Gore said the booking criteria was last modified in March 2010, when the county’s jail inmate population was significantly lower and more beds were available. At that time, the criteria was expanded to allow bookings on certain misdemeanor crimes and warrants that were not allowed previously.

The latest changes reflect a return to the standards in place before March 2010, with a couple of exceptions. People arrested on suspicion of annoying or molesting children or for violating probation will still to be booked into county jail until they post bail or are otherwise released.

“I don’t foresee this being a huge overall impact, but we’ll take a wait-and-see approach,” said Acting Capt. Lon Turner of the Chula Vista Police Department.

Jeff Jordon, vice president of the San Diego Police Officers Association, said his initial assessment is that the changes will have “minimal or almost no impact” on San Diego police operations.

Turner said the department books a relatively low number of misdemeanor offenders at the central jail in downtown San Diego compared to felonies.

Gore has said the department is working on custody alternatives, such as home detention and GPS monitoring, to free up space in the jails. He has said that a special unit is being installed within the department to handle the task.

Duke confirmed that the unit has been set up, and the staffing is in place. However, he said, the Sheriff’s Department is still “some time away from putting anybody out on alternative custody.”

 

NORCO: Officials see potential if prison closes

Norco officials said Tuesday they were happy to hear that the state might close the medium-security prison in their city, but some business owners and employees said the shutdown could cut their income or leave them jobless.

Mayor Kevin Bash is one of three city officials who couldn’t resist imagining the prison’s 3,900 inmates gone and the historic Norconian hotel that sits on prison property restored to its original grandeur.

“I’ve been pushing for years to try to get them to close the prison. This is a game changer for the entire area. We’ve been planning this for a long time,” said Bash.

If the state moves forward with its plans to overhaul prisons statewide and save $1.5 billion a year, the Norco facility would be shut down by 2016. Closing the prison is projected to save $160 million a year in operating costs, according to a state Department of Corrections and Rehabilitation report released this week.

Bash and other city officials envision a civic center, commercial developments, office space, possibly a resort and townhouses inside the historic buildings that now house prisoners. They see shops and coffee houses, and a business convention center that Norco lacks.

“That would be what I call the top part of the golden triangle — from Silverlakes to the Norconian to Ingalls Park,” Bash said, adding that he believes surrounding property values would increase with the closure.

Bash said he hopes a developer would purchase the property and turn it into an upscale, commercial and retail center.

Councilwoman Kathy Azevedo said she plans to join with state legislators such as Assemblyman Jeff Miller, R-Corona, whose district includes Norco, to push the preliminary closure plan forward.

State Corrections Officer Joe Baumann, a union official at the prison, said he has been fielding calls from prison employees worried about losing their jobs or having to relocate.

It’s the worst news they could receive, Baumann said, arguing that closing the Norco facility would exacerbate state-prison overcrowding, not help resolve it, as state officials claim.

Baumann, who has worked at the Norco facility since 1986, said local restaurants and gas stations will see a drop in sales, and prison employees who live throughout the Inland area will be forced to leave for jobs elsewhere.

State figures show the prison payroll as $76.8 million for 1,050 authorized employee positions.

“They’ll leave the Inland Empire. You’re not going to get that $80 million plus a year coming through,” Baumann said.

State officials said it was too early to know if employees would be transferred or laid off. California Rehabilitation Center spokesman Lt. Norman Faria said he foresees employees finding work at other prisons as positions open up through attrition and retirement.

Norco Councilman Harvey Sullivan said he doesn’t think the local economy would suffer if the prison closes, saying many merchants he talked with told him they don’t see much business from the prison.

Some businesses say otherwise.

A cashier at the ARCO gas station and AMPM market near the prison on Hamner Avenue said about 50 employees a day patronize the business, and that loss of business would be considerable.

The CRC Federal Credit Union in Norco has 2,000 members, a large percentage of who are employed at the prison.

“CRC has been our main sponsor. We’ve always heard that this may happen but it’s come as a little bit of a surprise,” said the credit union’s CEO Amelia Blair. “We’re developing plans as we speak.”

Blair said the institution has several options. It could merge or expand and has members from other correctional facilities.

Officials at the prison’s neighbor, Naval Weapons Station Seal Beach Detachment Norco, said they have in the past received informal inquiries from the city about using the lake, which is on Navy property near the hotel. If the prison closes, the city might be interested in leasing the lake property as part of development plans, said Bash.

Statewide, the proposed prison-system cuts would reduce corrections payroll by 6,400 employees by 2016, officials said. About 100 employees retire or resign every month, they said.

The state’s wide-ranging prison reorganization plan would also halt $4 billion in prison construction. The plan, released Monday, outlines the corrections department’s recommendations for ending years of federal court oversight, crowding, poor inmate medical and mental health treatment and soaring costs.

It would let the state Department of Corrections and Rehabilitation reduce its annual budget by $1.5 billion, officials said.

Corrections Secretary Matthew Cate described the Norco prison as one of the state’s oldest, most costly and inefficient prisons to operate.

It opened in 1928 as the Lake Norconian Club luxury hotel and served as a Navy hospital from 1941 to 1957. The complex became a narcotics treatment center in 1962. And it has housed low-level offenders since 1980.

Restoring the facility to its prior glory would pose a massive undertaking and involve upgrading a system of leaking pipes, removing asbestos, repairing decaying buildings and replacing crumbling roofs.

Bash said he hopes the state would clean up and restore the facility before selling it. He believes the work would bring millions of dollars into the city.