Ricardo B. Brazziell/American-Statesman file
Editor’s note: This story has been updated throughout
A former Austin Energy employee routed roughly $980,000 in city money to fictitious vendors during a six-year period ending in 2023, according to an investigative report released Tuesday by the Austin City Auditor’s Office.
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The report found that the employee, Mark Ybarra, used his city-issued credit card to make fraudulent payments and then falsified records to conceal them. Some of the sham vendors listed contact information tied to Ybarra or his relatives, auditors said. The scheme came to light after Austin Energy managers flagged suspicious invoices; Ybarra resigned after he was first questioned.
Ybarra paid these vendors for services like debris removal, window cleaning and painting, but the invoices often contained “little to no detail” about the vendors being used like a contact person, business address or phone number, the auditor’s report said.
“Ybarra took advantage of lacking purchasing controls and insufficient reviews by his former supervisors,” the report said.
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Attorney Mark Pryor, who represents Ybarra, did not return phone calls seeking comment Tuesday.
Auditors also concluded that two Austin Energy managers — Sammy Ramirez, who has since retired, and Renee Codina, who remains employed — improperly approved Ybarra’s payments based on invoices they should have recognized as suspicious.
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“There were a lot of suspicious red flags on all those invoices going back the entire time period and so they had an opportunity to catch it earlier,” chief of investigations at the city auditor’s office Brian Molloy said, adding that it only took a new supervisor who started in 2023 a few months to identify the fraud.
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According to the report, Codina approved $170,000 in fraudulent transactions and did not catch noticeable problems like missing vendor information, addresses or contact information.
In a letter attached to the report, Codina said she suspected and reported general overuse of credit cards to shortcut the city’s procurement process, but did not report fraud. Because her reporting brought problems with city credit card usage to light, she added, she did “not feel that the focus should land so acutely on [her].”
“We went back, and we looked at all of her communications where she did talk about credit card usage in that group of Austin Energy and none of the issues she identified had anything to do with what this focuses on,” Molloy said.
Ramirez did not provide written responses to the auditor’s office. Codina and Ramirez could not immediately be reached for comment.
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Austin Energy General Manager Stuart Reilly said in a statement the agency was “deeply disheartened by this breach of trust” and has taken immediate steps to address the situation including working with city auditor’s office and police department investigations, resetting expectations for purchasing procedures and updating purchasing controls and processes to prevent future misconduct. Updated controls include a more stringent approval process for Procard use and “more robust governance framework for procurement, contracting and Procard oversight,” he said.
“This individual’s illegal conduct does not reflect the values or integrity of Austin Energy or the City of Austin, and we recognize the gravity of this situation and the impact it has on public trust,” Reilly said. “We remain committed to transparency and the ethical stewardship of public resources and have taken measures to prevent this from happening again.”
Tuesday’s report further states that Ybarra’s wife Ambrosia Ybarra, who previously worked at the city’s Watershed Protection department, failed to cooperate with Austin Energy’s internal investigation. She left an interview early, refused to answer several questions and declined to schedule a follow-up meeting, according to the report.
Ambrosia Ybarra also could not be reached for comment.
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The auditor’s office referred the case to the Austin Police Department, according to the report. Court records show a Travis County grand jury indicted Mark Ybarra in August on a first-degree felony theft charge. He turned himself in to the Travis County Jail in September and was released the next day on a personal bond, jail records show.
According to the audit report, Ybarra was a facility service specialist for Austin Energy who started with the department in 2014. He was responsible for planning and performing basic building repairs and coordinating with vendors who provide maintenance and repairs. His city credit card was intended to help procure materials and pay vendors, the report noted.
Ybarra’s arrest came amid heightened scrutiny of city spending card use.
The auditor’s office told City Council members in October it had launched a broader review of purchasing card charges, which is expected to wrap up early next year. The auditor’s office also published an investigation in October after they found that Austin Water program manager Nico Heuwert used his city credit card to pay contractors tens of thousands of dollars for work on unauthorized services.
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Molloy said Tuesday the broader review of city credit card charges, launched after the Ybarra case, has identified other suspicious transactions from more than one card holder and that the office is investigating them.
The revelations also came in the wake of American-Statesman reporting on questionable credit card spending among Austin’s top executives that prompted some leaders to pay back thousands.
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Staff writers Tony Plohetski and Alex Driggars contributed reporting