Clarke Howatt, the former public finance official suspected of embezzling $1.3 million in funds intended for beautifying a fast-changing part of San Francisco, has been indicted on charges of wire fraud.

The incident occurred Aug. 12, according to the charge filed Friday at the U.S. District Court in San Francisco, and it involved the transfer of money that had been paid as community impact fees by the developer of the One Rincon tower next to the Bay Bridge. The $1.3 million was wired from the Finance Authority for Nonprofit Corporations, an independent arm of theAssociation of Bay Area Governments, to a Citibank account that Howatt had opened the previous month.

At the time, Howatt served as the finance authority’s financial services director. He resigned in late January, one month after an audit revealed that the South of Market Community Stabilization Fund, where the money was supposed to be available for public improvements, was depleted.

Howatt “did knowingly and with the intent to defraud devise a scheme and artifice” to pull off the Aug. 12 transfer and obtain “unused development project funds and surplus cash from (public) bond accounts,” according to the indictment. The money was wired to an account that supposedly was held by representatives of One Rincon as reimbursement for money spent on street upgrades. But the fund had no connection with the tower developers, and no request for such a reimbursement had been made.

Three days after the transfer, Howatt purchased a beach house in Oregon for $1.53 million. The government seeks forfeiture of that property, as well as a Moraga condominium owned by Howatt and purchased in June for $301,000.

Since his resignation from ABAG, where he had worked since 1995, Howatt has retained an attorney, Mary McNamara, who in 2012 was called “one of Northern California’s best federal criminal defense lawyers” by the San Francisco Daily Journal, a legal trade publication. The piece described her success at reaching a settlement with prosecutors on behalf of a businessman who had pleaded guilty to defrauding an independent federal agency.

“Mr. Howatt is fully cooperating with law enforcement and ABAG,” McNamara said in an e-mail to The Chronicle on Friday evening. “He deeply regrets his actions and is in the process of restoring the funds that he took. He waived indictment and is working with the government on a speedy resolution.”

ABAG’s executive director, Ezra Rapport, said in an e-mail that “we are pleased to hear that Mr. Howatt's attorney has stated that he has the resources to make full restitution.”
The executive committee of the Finance Authority voted last week to replace the missing $1.3 million with money from its reserves.

John King is a San Francisco Chronicle staff writer. E-mail: jking@sfchronicle.com Twitter: @JohnKingsfchron
Some will rob you with a six gun and some with a fountain pen..