Change of Plea Hearing Set in Fair Embezzlement Case 

U.S. District Court Judge Charles Breyer has scheduled a change of plea hearing for the Humboldt County Fair Association's former bookkeeper, signaling she may be nearing a plea agreement to resolve the wire fraud charges facing her.

Nina Tafarella, who was indicted by a federal grand jury on Oct. 11 and faces five counts of wire fraud stemming from an alleged "ghost payroll" embezzlement scheme that prosecutors allege saw her defraud the fair association of approximately $430,000, was recently in court for what was scheduled as a status conference. But according to court records, Breyer then set the matter for a Sept. 25 change of plea hearing, offering the delay to allow for "effective preparation of counsel."

The Journal's attempts to reach Tafarella's public defender, David Rizk, for information on a potential plea agreement in the case were not immediately successful.

Tafarella remains free after posting $15,000 bond in the case and pleading not guilty to all five counts and, according to court filings, has been "compliant with the conditions of her release." She was arrested Nov. 15, 2022, by Ferndale police at a local casino after allegations surfaced that she'd embezzled from the fair association and a Eureka nonprofit over the course of almost two years.

Prosecutors allege she primarily used a "ghost payroll" scheme to bilk funds from the fair association, creating fictitious employees in the association's accounting records she used to route electronic payments to her own accounts.

Each of the federal counts facing Tafarella carries a maximum sentence of 20 years in federal prison, a fine of up to $250,000 or both, if convicted. The U.S. Attorney's Office is also seeking the forfeiture of all property "derived from the proceeds" of the fraud, or a forfeiture judgement of $456,911.

The judgment would allow prosecutors to seize "substitute property" in the event that the embezzled funds — or what was purchased with them — cannot be located, have been transferred to a third party or have been "substantially diminished in value."

Fair officials, who have now spent a year and a half working to untangle the fiscal mess left in the wake of Tafarella's alleged theft have voiced hope that a successful prosecution of Tafarella may result in the fair recouping some of the allegedly embezzled funds. But a Jan. 30 court filing casts doubt on whether that's possible, with Tafarella's attorney describing her as "indigent," or impoverished and unable to meet her basic needs.

Previously, prosecutors have alleged that Tafarella used the embezzled funds "on personal expenditures, including Amazon purchases, restaurants and gambling."

In April, The Ferndale Enterprise broke news that Tafarella had also faced another embezzlement allegation in 2019, years before she moved to Humboldt County and started working for the fair association. Those allegations, reported to the Santa Barbara County Sheriff's Office and investigated before the district attorney opted not to file charges and sent the case back for further investigation, accuse Tafarella of stealing almost $6,500 from a wellness company she worked for.

According to a Santa Barbara County Sheriff's Office police report, Tafarella was employed by Acacia Counseling and Wellness, working in the office, when she was accused of forging a supervisor's signature on five company checks totaling $6,946, three of which were made out to her and two made out to the "Gordon Family Trust." A spokesperson for the Santa Barbara County District Attorney's Office said prosecutors determined there was insufficient evidence to prosecute Tafarella when the case was submitted and sent it back to the sheriff's office for further investigation.

Brett Donley, the former founder of Acacia Counseling and Wellness, said the FBI is investigating the Santa Barbara allegations, possibly looking to incorporate them into the case currently facing Tafarella, though the status of that investigation is unclear.

Tafarella is slated to personally appear at the Sept. 25 change of plea hearing in San Francisco, which is scheduled to begin at 10 a.m.

Editor's note: A version of this story was first published in the June 20, 2024, edition of The Ferndale Enterprise.

Thadeus Greenson (he/him) is the Journal's news editor. Reach him at (707) 442-1400, extension 321, or [email protected].