County officials knew by January 2023 that a top executive for an ex-county contractor now embroiled in a criminal case involving public money previously served time for embezzlement – and still awarded the organization she helped lead a contract worth more than $1 million annually the following year.
Rather than order the Harm Reduction Coalition of San Diego to remove COO Amy Knox from her post as the nonprofit’s finance chief, the county conducted an audit of the organization’s then roughly $1.3 million annual contract. County officials called for more financial controls at the nonprofit, yet it’s unclear what they did to ensure improvements were implemented after the review ended.
In 2024, county staff awarded a second contract to the organization worth more than $1 million annually.
Now Knox faces nine felony charges for allegedly spending public money on everything from plastic surgery to purebred dogs, forging a $102,000 invoice to the county and submitting fraudulent tax forms.
The charges came roughly a decade after Knox served about 18 months in prison for embezzling more than $500,000 from a family member’s business. She later began work for the Harm Reduction Coalition, which distributed an overdose reversal drug and tested street drugs for fentanyl.
Months after the Harm Reduction Coalition got its first county contract, a whistleblower spoke with Christy Carlson, then a compliance officer in the county’s Health and Human Services Agency.
Voice of San Diego obtained Carlson’s notes from that conversation after suing the county to force release of whistleblower reports. Carlson’s notes mentioned Knox – who the whistleblower said oversaw grants, payroll and finance at the nonprofit at the time – and “embezzlement.”
Carlson’s notes also mention “3-4 years,” matching the four-year prison sentence Knox received in 2015 and underline the phrase “no background checks.”
Eleven days later, the county notified the Harm Reduction Coalition that it had started an audit.
In late April 2023, the county requested that that the nonprofit address potential conflicts of interest. The county audit called out an accounting consultant – likely Knox – who also served as the contract grant administrator, treasurer and board director. County officials also wanted the nonprofit to create new policies and procedures for finances, personnel, general ledger practices and tracking of contract-related work. The audit also flagged the organization’s failure to file nonprofit tax and payroll forms, to properly reconcile bank statements and questioned certain costs.
In August and September 2023, county officials notified the nonprofit’s leaders that they had accepted changes made in response to the audit. They also confirmed they had received $3,129 in refunds from the Harm Reduction Coalition to address some overcharges and other line items the county deemed inappropriate.
In a statement, county spokesperson Tammy Glenn described those corrective actions. She did not clarify specifically what county officials did or may have discussed after learning of Knox’s criminal history – other than start auditing the nonprofit.
“The county’s responsibility was evaluating HRCSD’s compliance with contractual requirements and monitoring performance,” Glenn wrote. “While monitoring showed HRCSD was able to demonstrate strong reach into the unsheltered homeless community to deliver life-saving naloxone, which was then not widely available, it also identified concerns.”
David Silldorf, an attorney representing Knox, said the former Harm Reduction COO provided the nonprofit’s background check policy to the county at its request twice in 2023, including that March.
“Based on the information that I’ve received, it’s my understanding that the county did not ask Mrs. Knox for her personal background check and Mrs. Knox did not provide one,” Silldorf said.
If true, that means the county only asked for the nonprofit’s policy on background checks – rather than Knox’s own background check.
County spokespeople have said the county relies on contractors to conduct their own background checks and that criminal histories aren’t necessarily disqualifying.
Yet the Harm Reduction Coalition’s 2022 overdose reversal drug contract also required contractors to have documented processes to “determine if criminal history demonstrates behavior that could create an increased risk of harm to clients or risk to services to be performed.”
Harm Reduction Coalition CEO Tara Stamos told Voice she knew Knox had served time in prison but thought she had misspent $3,200 from a business account – not embezzled more than $500,000. Stamos has also said the 2015 embezzlement conviction didn’t show up in her own background check of Knox. She said she didn’t understand the extent of the crime until just before she approached the District Attorney’s Office with her own concerns about potential embezzlement.
If she had, Stamos said, she wouldn’t have hired Knox.
But Stamos said both she and Knox told the county they had previously served time in prison. Many workers use past experience with addiction to help others use drugs more safely and proponents consider incorporating and hiring people with lived experience a best practice. (Stamos said she served about a year in prison in the 1990s for petty theft and prostitution and spent time in jail in the years after that for charges including drug possession.)
Stamos also said the county never let her know what the whistleblower reported about Knox’s 2015 embezzlement conviction.
“They knew way more than I knew and I don’t understand how they didn’t say anything,” Stamos said.
Silldorf said Stamos was “100 percent aware” of the extent of Knox’s criminal history.
One thing Stamos and Silldorf seem to agree on: The county didn’t follow up on what it recommended in its 2023 audit.
Stamos said Knox took the lead on responding and that she was kept out of the loop.
“I was under the impression that we had passed our audits with flying colors,” Stamos said.
Knox’s attorney said the nonprofit created new policies and procedures in response to the audit and submitted them for review – and then the county dropped the ball.
“The county did not follow up to determine if these procedures and fiscal policies were ever implemented other than random invoice audits performed on two invoices per year which did not require policy or procedural review,” Silldorf said.
He said Knox blamed Stamos for making it challenging to implement policies that might increase internal controls and structure.
Silldorf said the Harm Reduction Coalition hired a bookkeeper, tax accountant and auditor to minimize conflicts but struggled to enact other recommendations.
For example, the nonprofit never established a board of directors beyond Stamos and Knox. State law requires nonprofits to have boards though it doesn’t specify a number of board members.
“(Stamos) was nervous that if they brought on a true board of directors that they would fire her,” Silldorf said.
Stamos acknowledged she left administrative and financial work to Knox, but said Knox wasn’t interested in more oversight.
“I talked to [Knox] about having a board and she said we didn’t have to have a board with the size of the nonprofit we have,” Stamos said.
Stamos said she had five to six people she regularly consulted with who served as an unofficial board but never got around to establishing a formal one.
Asked to respond to claims that the county failed to follow up to ensure its recommendations were followed, Glenn pointed back to the 2023 audit records.
Two years later, the county cancelled its two contracts with the Harm Reduction Coalition last June after an investigation triggered by complaints from Knox and a subcontractor that went went unpaid for months. Around the same time, District Attorney Summer Stephan’s office began a criminal probe.
In March, the county announced it hired an auditing firm to review its contracting process.
“We take stewardship of public funds seriously, and we want to understand where the checks and balances may have broken down and what improvements may be needed,” county Chief Administrative Officer Ebony Shelton wrote in a statement at the time.
Glenn, the county spokesperson, said the review by certified public accounting and advisory firm Eide Bailly could be completed and released by the end of this month.