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Carolyn Y. Smith and Dante Dayacap, the former Southeastern Economic Development Corp. officials at the center of a clandestine bonus scheme exposed by, won’t go to jail for their crimes.

The former redevelopment leaders, who had pleaded guilty to one count apiece of embezzling public funds, were sentenced today in San Diego Superior Court. Smith, the agency’s former president, was sentenced to perform 360 hours of community service, in addition to receiving a one-year suspended jail sentence.

Dayacap, the former finance director, received 240 hours community service and a nine-month suspended sentence.

Combined, they’ll have to pay restitution of $435,018.36. They’ll repay the city of San Diego at the rate of $100 per month — which amounts to $1,200 annually each. At that rate, the money won’t be repaid until the year 2193. Both are on probation for five years.

In a lengthy statement, Judge Edward Allard III laid out his reasoning for not imposing the jail time the prosecutors had asked for. He said the defendants had already suffered significantly, losing their careers, incomes and reputations.

“By their pleas, they have now been held accountable,” he said. “I think it rings out loud and clear to other individuals in similar positions to the defendants, that if they choose to ignore the law and perpetrate an economic crime, they will, in fact, be accountable.”

Allard put the restitution repayment at the center of his reasoning.

“The only way that restitution is going to be secure for victims is by having the defendants repay it,” the judge said. “They’ve got to be working to repay it. They can’t repay it if they’re in custody.”

While in power, Smith and Dayacap paid themselves and other SEDC employees significantly more than they had reported to their board, the City Council and the public. By keeping key positions unfilled and obscuring budget documents, they funneled more than $1 million over five years to themselves and others without authorization.

The state Attorney General’s Office had accused them each of five criminal felony counts: conspiracy to commit a crime, three counts of embezzlement of public funds, and one count of misappropriation of public funds.

Before pleading guilty, the two each faced a maximum of seven years and four months in prison.

Smith and Dayacap took turns addressing the court, which was packed with loyal supporters.

Holding back tears, Dayacap apologized.

“I apologize to the city of San Diego, SEDC and the citizens of this community. My family, friends and associates were hurt because of my conduct,” Dayacap said. “I am deeply sorry. But most importantly, I am remorseful for the mistakes I made and I take full responsibility for my actions.”

Looking more composed, Smith added her apologies.

“This has been a difficult time for me grasping just what I did. And I’ve sought counseling to help me with that. I think I’m working through that and I am remorseful.”

Will Carless is an investigative reporter at You can contact him directly at or 619.550.5670.

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Will Carless

Will Carless was formerly the head of investigations at Voice of San Diego.

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