Second Sheriff’s Custody Sergeant Arrested for Alleged Overtime Pay Fraud

For the second time in less than a year, a Santa Barbara County Sheriff’s Office custody sergeant has been arrested on suspicion of stealing taxpayer funds through fraudulent overtime pay.

Sgt. Jeffrey Koeller, 39, was arrested Thursday on suspicion of embezzlement by a public officer, grand theft, and forgery. The Santa Barbara County Sheriff’s Office alleges that Koeller claimed and received more than $93,000 in compensation for hours he did not actually work while assigned to the Northern Branch Jail.

Koeller was booked into the San Luis Obispo County Jail, where he remained in custody as of Thursday afternoon. Authorities booked him into the San Luis Obispo facility rather than a Santa Barbara County facility for safety and logistical reasons, given his prior employment working inside the local jail system.

Koeller, who was originally hired by the department in December 2013 and promoted to the rank of custody sergeant in 2021, has been placed on administrative leave pending the outcome of the criminal proceedings.

A Follow-Up Investigation Reveals More Anomalies

Koeller’s arrest is the second major timecard fraud scandal to rock the county's custody operations in recent months. In January, Custody Sgt. Segun Ogunleye, 34, was arrested and charged for allegedly falsifying his timecards and stealing more than $175,000 in overtime pay for shifts he never worked.

Following Ogunleye’s January arrest, the Sheriff’s Office initiated an extensive, sweeping audit of its internal payroll practices. Department spokesperson Raquel Zick noted that investigators conducted a rigorous review of 688 separate timecards that contained overtime entries. Ultimately, this deep dive identified only one additional timecard containing significant anomalies. That specific discovery led investigators to open a second criminal probe, culminating in Koeller's arrest this week.

Santa Barbara County Sheriff Bill Brown did not mince words regarding the breach of public trust. Brown stated that the alleged actions betrayed the public’s trust and the fundamental mission of the agency. He emphasized that the overwhelming majority of sheriff's personnel are dedicated public servants who perform their duties lawfully and with honor, vowing that the department will thoroughly investigate any internal violations and hold those responsible fully accountable to both internal policies and the law.

Rooted in Runaway Overtime Costs

The arrests cast a harsh spotlight on the Santa Barbara County Sheriff's Office's ballooning personnel budget. Over the past two consecutive years, overtime spending for the Sheriff's Office has reached staggering heights, hitting roughly $20 million annually.

The crisis caught the attention of the Santa Barbara County Civil Grand Jury, which launched a formal investigation into the county's financial management. The Grand Jury ultimately concluded that a systemic lack of administrative oversight, compounded by the logistical difficulties of operating two separate correctional facilities—the Northern Branch Jail and the Main Jail—were the primary drivers behind the runaway overtime costs.

In response to these findings, the Santa Barbara County Board of Supervisors has stepped in, demanding regular public reports and formal audits regarding the Sheriff's Office overtime expenditures. The board has maintained pressure on the department to reign in spending and fix the systemic vulnerabilities that allowed such large-scale embezzlement to occur unnoticed.

New Oversight Measures for the 805

For Santa Barbara residents, the financial implications of these arrests go beyond the direct theft of public funds; they highlight critical vulnerabilities in how local government manages its resources. To address these blind spots, the Sheriff’s Office has introduced new oversight measures intended to prevent any similar misconduct from occurring in the future.

During an April update to the Board of Supervisors, Undersheriff Brad Welch detailed some of the specific operational changes implemented to curtail excessive and fraudulent overtime. Administrators have focused on decreasing mandatory overtime shifts at both correctional facilities and capping the number of supervisors allowed per shift to better balance staffing ratios.

Furthermore, the department has fundamentally changed how overtime is requested and approved. The office transitioned back to utilizing paper overtime sheets—a move away from potentially opaque digital systems—that now require direct supervisory review and signatures to verify that the extra shift was genuinely needed for regular jail operations.

While the implementation of these new paper trails and administrative caps marks a significant shift in department policy, local officials are keeping a close eye on the financial returns. Moving forward, the ultimate success of these oversight measures will be judged by the county's bottom line and whether future audits reflect a return to financial integrity for Santa Barbara's law enforcement operations.