Oceanside City Hall / File photo by Megan Wood

The employee tasked with managing Oceanside’s $500 million investment portfolio was previously convicted of felony burglary for stealing the city’s credit card and thousands of dollars from Home Depot as part of a gift card scam as a teen, public records reveal.

Voice of San Diego discovered Oceanside Treasury Manager Steve Hodges’ prior felony theft conviction while investigating Hodges’ claim elected city treasurer Victor Roy lost the city millions of dollars. It turned out legal callable investments were to blame.

Public records also reveal Hodges has made a habit of complaining about colleagues and public agency employers in the past and has walked away with hefty settlements – a $590,000 payout earlier this year from the Costa Mesa Sanitary District and a separate $49,000 payout from the city of Las Vegas in 2014.

The revelations about Hodges’ history are the latest twists in a saga that has left Oceanside investigating Roy for various alleged misdeeds and seeking a replacement for Hodges, who is still employed but has plans to resign later this year, according to city officials. 

Hodges, 41, did not respond to multiple requests for an interview about his prior work and conviction, which was reduced to a misdemeanor in 2003 and expunged in 2004, according to California Superior Court records. Documentation of the criminal case continues to be held by local court offices and the San Diego County District Attorney’s Office. 

Hodges is paid more than $100,000 a year as Oceanside’s treasury manager, according to Transparent California. In the job, he is the full-time daily overseer of the city’s $500 million investment portfolio, whereas Roy’s elected treasurer job is merely part-time and comes with a $24,000 salary

Oceanside Assistant City Manager Michael Gossman said nothing on Hodges’ prior felony conviction came up in the city’s background check when he was hired in 2019. 

The Criminal Case

Hodges was just 19 and a cashier for Home Depot in 2000 when he stole the city of Oceanside’s credit card information and participated in a credit card scheme with a fellow employee, walking away with more than $4,500. The San Diego Union-Tribune picked up on the story at the time. 

Here is what happened in 2001, according to the court file and information shared by officials in the District Attorney’s Office. “D2” refers to Hodges.

“D1 notices co-worker D2 allowing guy through his checkout line at Home Depot without paying for everything. D1 asks about it later and he says it’s fun and easy and we’d love to have you in on it. D1 agrees. Later on, D2’s ‘friend’ goes through D1’s line and buys numerous $100 gift cards on stolen VISA number. D1 processes this fake transaction. Later on D1 and D2 go to Home Depot stores around the county and buy $2 plants and collect $98 in change. Home Depot employees throughout the county pick D2 out of photo line up because what he did was so strange they remembered him. D1 cops out fully and D2 invokes. No leads on who the third party ‘friend’ is,” reads the DA’s case narrative, provided by office spokesman Steve Walker.

Hodges was arraigned in 2001 and eventually pleaded guilty to felony commercial burglary. Several other charges against him were dropped, including additional burglary and grand theft charges, according to court documents. The other employee charged, a woman, pleaded guilty to felony grand theft, according to Walker. Both had their charges reduced to misdemeanors and later expunged.

The court file shows defendant Hodges obtained an accounting degree from Cal State San Marcos in 2004. The same degree is listed on Hodges’ resume. Hodges was sentenced to three years’ probation, 120 days in custody and ordered to pay restitution totaling $4,589.23.

 “The criminal operation the defendant undertook in committing these offenses was sophisticated,” reads a filing from Deputy District Attorney Anita Spinetta. “The defendant was the ring leader of the offenses, and elicited the co-defendant to commit offenses with him. The defendant took advantage of a position of trust in committing these offenses.”

San Diego County Superior Court Judge Michael Kirkman said he would consider expunging Hodges’ record prior to the end of probation “if petitioner completed college,” according to a court filing by Richard Duquette, Hodges’ criminal attorney

In an affidavit submitted by Hodges also kept in the court file, he writes that he called the California Board of Accountancy and found that “Any theft related conviction will inhibit an individual from obtaining a license. Although one may sit for a test, a license will not be granted by the state if a theft related conviction is present,” Hodges wrote. “I am officially done with school, but I am unable to use my degree with a criminal conviction. Background checks are conducted on a routine basis for accounting related positions. No company is going to hire me to handle their money with a burglary conviction. I have accepted my mistakes and worked hard to overcome them. My hard work seemingly goes to waste without an expungement.”

Hodges received the expungement in 2004. He went on to work for Enterprise Rent-A-Car in Las Vegas as an accounting manager before working with public funds at several public agencies.

Duquette, Hodges’ criminal defense attorney, responded to VOSD’s inquiry about his Oceanside treasury job, writing in an email, “The Honorable Judge, after a hearing, granted a Penal Code 1203.4 motion to expunge his misdemeanor conviction. The effect is to legally relieve him of all penalties and disabilities of that earlier misdemeanor conviction. One of the many positive effects of this law, is to allow people to regain their good name and gainful employment. Due to the attorney client Privilege, that’s all I can tell you. The public records speak for them selfs (sic).”

Oceanside Official Says Hiring Process Was Rigorous

Hodges came to Oceanside from the Costa Mesa Sanitary District, where records show he worked for a year as finance manager before walking away with more than half a million dollars after filing a whistleblower lawsuit alleging wrongful termination. Prior to that, Hodges worked for the San Diego County Water Authority, the City of Carlsbad and the City of Las Vegas, according to his resume obtained from Oceanside under public record laws. All jobs involved overseeing and managing public funds.

 “No convictions were identified in Mr. Hodge’s  background check,” Gossman, Oceanside’s assistant city manager, wrote in an email. “Additionally, when Mr. Hodges was hired he participated in a competitive, nationwide recruitment wherein his credentials, experience, and education were reviewed by Human Resources staff and multiple hiring panels.” 

Hodges has alleged harassment by Roy in multiple emails to city officials, though Oceanside officials told VOSD he never officially filed a harassment complaint.

A Whistleblower Complaint and A Big Payday

Before Oceanside, Hodges worked at the Costa Mesa Sanitary District as a finance manager from January 2018 to January 2019. The short stint at the special district, which collects trash and sewer water for about 118,000 residents in Orange County, would end up paying Hodges $590,000 earlier this year to end his whistleblower lawsuit, which also alleged retaliation and defamation.

According to Hodges’ resume, he oversaw accounting and payroll for the sanitary district, prepared finance documents for auditors, led annual budget creation and implementation, monitored cash flows and provided “administrative and analytical support directly to the General Manager and Board of Directors.” 

In 2018, Hodges complained a former general manager-turned-private contractor was overbilling the agency by hundreds of thousands of dollars for engineering services over a five-year period.

According to Hodges’ lawsuit seeking damages filed in October 2019, he complained to district leadership about the alleged overbillings and reported he “was getting a lot of complaints that the district was engaging in racial discrimination and retaliation and he told them he thought there was substance to some of the complaints.”

Afterwards, Hodges was quickly placed on paid leave for four months until January 2019, “at which time they fired him for a pretextual reason,” his lawsuit alleged. “In retaliation for complaining about the illegal conduct, plaintiff (Hodges) was placed on leave, terminated, and then had his reputation besmirched in the newspapers.”

Hodges also claimed a district official defamed him in statements made to the Orange County Register.  Based on those statements, the Register reported in 2018 that Hodges was put on “paid leave for investigation of unrelated misconduct” following “an unrelated complaint by another employee.”

As for the contractor overbilling concerns, the Orange County Register reported in June, “The investigation concluded there was insufficient evidence that a crime was committed by [the contractor] and his firm. The investigation also concluded that work billed by [contractor’s] company had indeed been done, although the billing was ‘high and unrestricted.’”

The paper also reported Bob Ooten, president of the sanitary district’s elected board of directors, called Hodges’ settlement, “just a horrible waste of money to pay out that kind of settlement to an employee I thought was properly disciplined. … This was not a good thing.” 

Hodges meanwhile told the paper, “No amount of money can make up for what the district has put my family and me through. The extent they went to defend their egregious actions is indicative of just how much there is to hide,” he said. “It is important for me that my daughters see who their Dad is and to always do the right thing no matter what the cost.” 

The sanitary district did not report the settlement publicly when it was first approved in February, according to the Register report.

More Discrimination and Retaliation and Another Settlement

Before the Costa Mesa job, Hodges worked as a senior management analyst at San Diego County Water Authority from September 2016 to January 2018, according to his resume.

The San Diego County Water Authority said it had no records of settlements or payouts with Hodges, but provided records indicating Hodges had also filed complaints. 

“I wanted to submit these items for Discovery as supporting documentation toward my retaliation and discrimination claim,” a records request from Hodges to the agency in October 2017 says. 

The water authority’s general counsel, Mark Hattam, repeatedly declined to release Hodges’ claim report, writing any claims by Hodges are “clearly private personnel records exempt from disclosure.”

Before the water job, Hodges worked for the city of Carlsbad as a management analyst from 2014 to 2016, per the resume. 

Carlsbad city officials also said they did not have any settlements with Hodges but, “The city is withholding certain personnel records the disclosure of which would cause an unwarranted invasion of personal privacy that clearly outweighs the strong public interest in disclosure,” wrote Tammy McMinn, Carlsbad senior deputy city clerk. The city did not respond to requests to clarify whether complaints by Hodges or investigation reports were being withheld.

Hodges’ first public agency job was working for the City of Las Vegas as senior financial analyst from 2007 to 2014, according to his resume.

Documents released by Las Vegas so far show Hodges received $49,000 upon his departure. 

In a settlement agreement signed in August 2014, Las Vegas officials wrote that Hodges was eligible for rehire but indicated he had been on paid leave since May that year. The deal said he would remain on paid leave for about seven months and receive a $40,000 lump sum payout, plus another $9,000 payment.

“Any future requests for information will be handled pursuant to the city’s neutral referral policy,” the settlement states.

In exchange, Hodges agreed to drop his charge filed with the U.S. Equal Employment Opportunity Commission. Hodges’ charge alleged the city violated the Equal Pay Act – a law requiring men and women in the same workplace be paid equal pay for equal work — and Title VII of the Civil Rights Act, which bars employment discrimination based on race, color, religion, sex and national origin.

Other records released by the City of Las Vegas show Hodges had complained of harassment by another employee and said he had taken on new job responsibilities without being compensated for more than a year.

In a June 2014 letter to Las Vegas Mayor Carolyn Goodman, Hodges also connected his firing to a discovery he made about another employee in 2012. Hodges reported to officials that employee was wrongfully padding his pension.

“In April 2012, I discovered potential fraud that was occurring in Leisure Services. An employee had been putting 3 hours of callback overtime (PERSable) on his timecard almost everyday with the same generic explanation… if this callback overtime were allowed to continue, his retirement would then be based on $130k a year vs. $70k yearly (nearly doubling his retirement),” Hodges wrote.

Hodges told Goodman his complaint was brushed off by officials in the city manager’s office at the time, so he took the concern to the internal auditor, who released findings two years later.

“I was fired in retaliation,” the day after the findings came out, on May 15, 2014, he claimed. “… the internal message sent is that if you uncover unethical/fraudulent behavior you will be fired.”

Following the audit, the callback employee kept his job, but the city was going to try to recover some of the pay, according to a May 2014 article by the Las Vegas Review-Journal. Two supervisors also left their city jobs, the parks and recreation department was restructured and the city planned to create a new overtime reporting system that routinely sent reports to the city manager, per the news report.

Ashly McGlone

Ashly is a freelance investigative reporter. She formerly worked as a staff reporter for Voice of San Diego.

Tigist Layne

Tigist Layne is Voice of San Diego's north county reporter. Contact her directly at tigist.layne@voiceofsandiego.org...

Join the Conversation


  1. Why raise Hodges’s teenage burglary conviction.?It happened years ago and the court has since expunged it. This is an example of journalistic dirt turning. Stick to the main issues!

    1. No one should be able to have a felony expunged from their record. No one with a felony history should ever be hired by the city. Having a felony theft record is very relevant and if you can not understand that then no one can explain it to you. There are reasons that felony convictions limit employment. I am amazed you think it is not relevant.

  2. Now his daughter knows Hodges is a professional slime ball (probably already did). How can these pathetic GOV agencies not do their due diligence in hiring highly compensated employees? Why isn’t that a question on every application?
    Side note : there is a bill on Newsoms desk to expunge criminal records so more of this will go on.

  3. Funny how the article never mentions the systematic racism identified by Hodges and testified to by 2 separate employees in court…I am guessing this reporter is white? We need more people like Hodges not afraid to do what is right.

    1. Yes, white and appears to be struggling reporter who hasn’t published much of anything in several years until now. Wonder what the motive is? Sad trying to bring someone else down for personal gain. I am also appalled Voice of SD would roll with this story and will no longer read.

      1. No one should be able to have a felony expunged from their record. No one with a felony history should ever be hired by the city. Having a felony theft record is very relevant and if you can not understand that then no one can explain it to you. There are reasons that felony convictions limit employment.

  4. How would VofSD even allow this to be published? A guy turned around his life from a mistake several decades ago and you attempt to crucify him for it? What an injustice and a disgrace to journalism. I applaud the guy for having the courage to do what is right and it appears he was correct in all instances.

  5. Wow! It easily Googled Hodges identified racism in the hiring process at the entity against blacks and hispanics and it was supported by two additional employees. Why was this left out? Clearly reporter had an agenda and it wasn’t to do the right thing. Are there no ethics in journalism?

  6. What an underhanded way to promote racism and discourage anyone from ever coming forward and doing the right thing…I agree this is shameful and should not be tolerated. I also was able to verify 2 separate employees testified in court documents to the claims. He was right but smeared to be the bad guy??? Clearly an agenda that should not be accepted in today’s society

  7. Haters are alway going to hate…how many millions did this guy save taxpayers? Didn’t catch that anywhere…just saying…isn’t that what matters

  8. $590k speaks for itself doesn’t it? You don’t pay someone that if there is not substantial wrongdoing…the guy probably has more credibility than most

  9. “The Honorable Judge, after a hearing, granted a Penal Code 1203.4 motion to expunge his misdemeanor conviction. The effect is to legally relieve him of all penalties and disabilities of that earlier misdemeanor conviction. One of the many positive effects of this law, is to allow people to regain their good name and gainful employment.” Here we see the investigative reporters take it upon themselves to attempt to reverse the intention of the judicial system and bring the expunged record of a juvenile stemming from 22 years in the past into the forefront of current public discussion. Such reporting for the sake of seeking to expand readership is reprehensible. There is no Pulitzer Prize awaiting these reporters for their questionable behavior. Jesus’ advice to the Pharisees to “Let he (she) who is without fault cast the first stone” (John 8:7) was never more applicable than to the media reporting surrounding Hodges’ past.

    Hodges is a good man, husband and father who has done exceedingly well for himself and his family since his youthful indiscretion. He obviously is aware of what is going on in his work environment and he has been affirmed in his prior observations of improprieties occurring elsewhere. His work legitimately casts him in the role of watchdog. Is it possible that those who here have something to hide themselves might very well seek to sully the reputation of anyone who becomes aware of their misdeeds? Oceanside here curiously is going to implement some of his investment related recommendations which itself is a validation of his thought process while allowing him to leave their employ. I think the city council has some self evaluation to contemplate. The public should expect something better from their city officials in my opinion.

  10. While it seems wild he just so happens to stumble upon issues everywhere he goes, Hodges seems to have uncovered some inflated costs that milked the taxpayers out of some money…. hell their own internal study stated “although the billing was ‘high and unrestricted.” Good for Hodges and the tax payers calling this collusion out!

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