Case against former city employee will proceed |

Case against former city employee will proceed

William Ferchland

Dan Thrift / Tahoe Daily Tribune Mary Kay McLanahan, a former South Lake Tahoe city employee who was 20 minutes late for her preliminary hearing, heads to court Wednesday with attorney C. David Eyster.

Former associate city planner Mary Kay McLanahan used her position in the planning department to forge documents on the transfer of building rights to a real estate agent for thousands of dollars, prosecutors said Wednesday during a preliminary hearing.

McLanahan, who spent 15 years working for the city of South Lake Tahoe until 1999, will be charged with embezzlement, falsification of records and grand theft after Judge Suzanne Kingsbury decided enough evidence exists for the case to continue. McLanahan faces up to four years in prison.

At focus during the proceedings at the El Dorado County Superior Court were precious building rights, called Existing Residential Units, which allowed owners of lots to build homes.

The prosecution believes McLanahan forged transfer documents for three rights that were obtained by the city through eminent domain. Deputy District Attorney Lisa Serafini believes McLanahan had the authority, knowledge and computer technology to make the crime work.

The building rights were a way for the Tahoe Regional Planning Agency to limit growth. In the early 1990s a lot owner could be on a waiting list, in a lottery or buy a unit to proceed with construction. Without purchasing a unit, a person could wait seven years before being allowed to build.

The investigation began when one buyer discovered a unit wasn’t considered valid.

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“He was told by the city planning department that a majority of the files or all of the files were missing,” said South Lake Tahoe police Detective Robbie Hight, one of two witnesses who testified Wednesday.

The three building rights, originally tied to a residential complex at Osgood Avenue, were going to be used by the city for redevelopment purposes.

Instead, McLanahan transferred the rights to real estate agent Timothy Roslansky, according to testimony. FBI Agent Chris Campion, who interviewed McLanahan in December 2002, said the two met through dealings at the city office. McLanahan would do “special favors” for Roslansky then committed “fraudulent activity on his behalf,” Campion said.

During one FBI interview, McLanahan estimated Roslansky gave her cocaine and $5,000 for the rights. Roslansky had a different story when questioned by authorities. The real estate agent said he paid McLanahan a total of $58,000 for the rights, Campion testified.

Defense attorney C. David Eyster stated McLanahan’s cooperation doesn’t mean she’s guilty.

“People say if you cooperate why don’t you walk into the courtroom and fall on a sword? That’s not how it works,” he said.

Roslansky, who was approached by people seeking building rights, may or may not have known the three units were fake, authorities said.

The real estate agent sold the rights to three individuals for $105,000. One person used it to build a house in El Dorado County. The other two, which were tied to private land in Douglas County through Roslansky’s sales, were also used by the city for redevelopment.

During the tail end of the hearing, Campion disclosed the FBI has two boxes of documents relating to the case. The admission caught Eyster off-guard.

“Were there surprises? Yes. The surprises was the government has (boxes) of papers they didn’t bring to the attention of the (district attorney) or myself,” he said.

Eyster hopes some of the paperwork would help his previous submission of a demurrer, which contends that while the charges might be true, they don’t hold water in court.

McLanahan will next appear in court Aug. 26 at 1:30 p.m. for an arraignment.

Serafini said Roslansky could be prosecuted down the line.

“All I can say is he’s not relieved of criminal responsibility,” she said.

– E-mail William Ferchland at