Peter Bang Credit: File photo

This story was updated at 2:45 p.m. June 8, 2021, to correct the spelling of Rich Madaleno’s name. 

The county’s Office of the Inspector General says the government should take more steps to prevent potential fraud when awarding contracts to outside contractors.

Inspector General Megan Davey Limarzi issued the report last week and announced it on Monday. It’s a follow-up to one published in late 2018, when county officials were investigating Byung II “Peter” Bang, a former economic development executive with the county.

Bang was convicted of embezzling about $6.7 million from the county under the guise of creating an incubator space for South Korean businesses. Instead, he used the money to fund his gambling habit, according to court documents.

Bang was sentenced to 15 years in state prison and ordered to pay the $6.7 million back, but county officials said they only expected to receive $1 million of it. 

Last week, a judge ruled Bang, his wife and associates must pay an additional $215,000 to the county in a separate civil suit. 


The inspector general’s new report praises county officials for making improvements after Bang’s plea, but says there are still “vulnerabilities” in the contracting process.

The report urged the county to make sure each contract awarded can be traced back to a proper invoice, and to make sure smaller payments, even less than $10,000, are approved through the proper safeguards and systems.

More specifically, county officials introduced a process that requires matching more transactions involving county funds with a specific invoice. The report recommended that county officials use “unique identifiers” to ensure invoices are matched with the appropriate agreements.


The report recommended that the county also:

  • Maintain an inventory of agreements with information like the parties involved, total agreement value and identification number
  • Ensure all agreements are shared with the county attorney’s office
  • Update the county’s business application software
  • Enforce more restrictions on direct payments
  • Expand policies to include oversight on payments less than $10,000

Chief Administrative Officer Rich Madaleno wrote in a response to the report that county officials took great strides to prevent fraud and embezzlement within economic development contracts, but acknowledged that more could be done.

Madaleno said a Financial Analysis, Audit and Compliance unit with the county controller’s office was established to monitor transactions greater than $10,000 to watch for irregularities.


“Where previously there had been no set policy or procedure for the development of agreements for certain non-procurement transactions, there is now a clearly delineated set of procedures to be followed to obtain approval by the necessary County personnel,” Madaleno wrote.

The Inspector General responded to Madaleno by saying: “The review goes beyond the County’s stated interest in mitigating fraud by incorporating the [Office of the Inspector General’s] broader mission of promoting efficiency and effectiveness in government, while identifying opportunities to mitigate not only fraud, but waste and abuse as well,” the report reads.

Steve Bohnel can be reached at