A small town in Northern California has a big problem. More than a quarter of a million dollars in public funds is missing. Five people are now facing criminal charges – and police say the greed in Gridley is a family affair.

The story starts with Gloria Gonzalez, a longtime Gridley city employee, now facing a total of sixteen counts of grand theft and receiving stolen property.
 Embezzlement Complaint 1 | Complaint 2

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CBS 13 tried interviewing Gloria Gonzalez outside the Butte County Courthouse in Oroville.

“Anything you want to say about the embezzlement charges?” I asked Gloria Gonzalez.
Gloria was silent, but an attorney walking next to her said, “She has no comment, she has no comment. Here get in this car here Gloria.”

Gloria Gonzalez tried to make a quick getaway at the courthouse, but authorities in Butte County allege she was caught in a web of deception – and a scheme that involves the theft of $261,000 from the town of Gridley, where she worked for 16 years at City Hall – most of them in the payroll department.

Authorities say Gloria Gonzalez had plenty of help in drawing checks from city funds.

“Yes it was very much was a family affair,” noted Robert Thomas, a Deputy District Attorney for Butte County.

In the criminal complaint, authorities describe the family affair as involving Gloria’s husband Vicente Gonzalez, who faces two counts of receiving stolen property. The couple’s two daughters, Bianca and Miranda Gonzalez, are also charged with grand theft.

“Yes we have both Bianca and Miranda on tape, on film depositing these checks,” Robert Thomas told CBS 13.

And Bianca’s boyfriend Jose Ramirez, is also facing charges.

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“There’s ten counts of grand theft. We’ve entered a not guilty plea,” said Roberto Marquez, attorney for Jose Ramirez.

Gridley has only 6,000 people. Residents here say they feel betrayed.

“It’s a disappointment,” said Gridley Police Chief Gary Keeler. “Embezzlement is spending money that you’re entrusted with. And she was clearly entrusted.”

But where did the more than a quarter of a million dollars in missing money go?

Authorities say much it went for new purchases inside Gloria Gonzalez’s rented home in Live Oak. Police executed a search warrant there and say they found dartboards, pool tables and iPhones.

They also found, “Foosball tables, things like that. New beds we found receipts for,” Keeler told CBS 13.

CBS 13 also went to Gloria Gonzalez’s home seeking comment, but no one answered the door, even though there were signs of activity inside the house.

The motive in Gridley is still a mystery. But in Gloria Gonzalez’s suburban neighborhood, nestled in the shadows of the Sutter Buttes, a family – and a town are torn apart – over a scandal that could affect the city’s ability to make payroll and provide basic services.

The investigation is still ongoing and the District Attorney has hired a forensic auditor to follow the money. The case goes back to court on Wednesday, October 27th.

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If you see examples of fraud, waste or questionable government spending, send us an e-mail to onthemoney@kovr.com. You can also follow On The Money stories in progress via Twitter at http://twitter.com/#!/mikeluery