The former executive in charge of shepherding the vast real estate assets of 165-bed City of Hope National Medical Center, Duarte, Calif., was arrested along with his wife this week on charges that they stole more than $1 million through the rigged auction of center properties.
Joseph Rohn, 40, and Julia Eleanor Castlen, 39, were arrested on Tuesday in Los Angeles and San Diego, respectively, and charged with conspiracy, grand theft, money laundering, and withholding and concealing stolen property. The Los Angeles County district attorney additionally charged Rohn with two counts of fraudulently altering or falsifying corporate papers by a corporate agent. They each are being held on $1.3 million bail. Prosecutors also seized more than $1 million in assets from the defendants, both of whom are attorneys.
Authorities alleged the couple took the money in late 1996 and early 1997 when Rohn, formerly the director of the cancer center's property management department, was asked by his supervisor to sell off some City of Hope assets in an "all or nothing" bulk sale. Prosecutors charged the two swindled the cancer center through a series of transactions involving K&K Oil , a company they controlled.
The arrests on criminal charges follow the filing of a civil lawsuit by City of Hope in June. The suit alleges that after being told to sell off some assets that City of Hope had received as charitable gifts, Rohn and others formed a company that submitted an artificially low bid, said Glenn Krinsky, City of Hope's general counsel. Later, Rohn and the others substituted even more valuable properties for what was to be auctioned and "then when he proudly showed up with a $288,000 check from K&K Oil, he didn't disclose that he and his wife held the controlling interest in K&K," Krinsky said.
City of Hope subsequently brought the civil allegations to the attention of criminal authorities, Krinsky said. Rohn was suspended in the fall of 1998 when a City of Hope employee first raised suspicions about Rohn's conduct, he added.
"It's clear that Mr. Rohn breached his trust and fiduciary duty to City of Hope," Krinsky said, adding that Rohn at one time had "a significant amount of discretion" in managing a large portion of City of Hope's considerable charitable assets.
Rohn faces a maximum state-prison term of 15 years and eight months. Castlen faces a maximum term of 14 years and four months.
Janet Levine, an attorney for Rohn, said the couple denied the allegations. Levine said the charges stemmed from a "misunderstanding."