City Attorney Dennis Herrera’s office has demanded the return of the embezzled money and referred the matter to an unnamed law enforcement agency. Because wire fraud may be involved, it would most likely be a federal investigation

The Association of Bay Area Governments official suspected of embezzling $1.3 million has resigned from the agency, an ABAG spokesman has confirmed, although it’s unclear where he was when the resignation was tendered or whether he intends to cooperate with an investigation.
Clarke Howatt, now ABAG’s former director of financial services, is wanted for questioning in the disappearance of $1.3 million from a South of Market fund meant for parks and other public improvements. He has not been indicted and no warrant for his arrest has been issued.
“It appears that Clarke Howatt ... executed a sophisticated scheme to defraud the agency by creating illegitimate documents, creating false identities, and deceiving (ABAG’s Finance Authority for Nonprofits) board and bank trustees to wire these funds,” ABAG Deputy Executive Director Brad Paul said in a statement.
Howatt, who was scheduled to be in New York at a conference this week, has hired a defense attorney, Mary McNamara. She could not be reached for comment. His daughter, reached by telephone Friday, would not comment on Howatt or where he might be.