Former San Carlos mayor allegedly admitted to embezzling from ‘all of his clients’

Former San Carlos Mayor Andrew Klein admitted to embezzling over $2 million from clients after they confronted him over missing funds from apartment properties he managed, according to two lawsuits filed in San Mateo County Superior Court.

Read more Summer monsoon could bring dry lightning to Bay Area

Andrew Klein, who launched Klein Property Management in 2023 and served as the Silicon Valley city’s mayor for 10 months from June 2011 to April 2012, allegedly confessed during two May 19 meetings with clients and commercial real estate brokers after property owners confronted him over missing money and unpaid property taxes. 

According to the first complaint, filed June 8, nine property owners and investors across the Bay Area sued Klein and his property management company for breach of contract, breach of fiduciary duty, conversion, constructive fraud, financial elder abuse and other claims. Several plaintiffs are in their 70s or 80s. 

Representatives for several property owners met with Klein on May 19 at a Palo Alto real estate firm after uncovering discrepancies in financial records, according to the complaint. That day, Klein twice admitted that he was “embezzling money from all of his clients,” the lawsuit says. The plaintiffs allege that Klein diverted money entrusted to him for rent collections, security deposits, reserve funds and owner distributions while managing apartment buildings across the Peninsula. The plaintiffs claim at least $1,914,242.51 is missing, though they say their investigation remains ongoing.

Klein did not return an SFGATE request for comment. 

During one meeting, plaintiffs allege, he estimated taking about $300,000 from one apartment complex and wrote out a confession because the property’s managing member is hearing impaired. The lawsuit includes Klein’s alleged handwritten note, which concludes with “I am so sorry.” The next day, the lawsuit says, Klein emailed another ownership group acknowledging he had misappropriated at least $238,000, calling it a “first-pass review” and saying he planned a “deeper investigation.” Plaintiffs say they later uncovered another $100,000 transfer unrelated to property expenses.

The allegations expanded weeks later after a second lawsuit was filed by another investment firm on June 25, alleging Klein improperly withdrew at least $226,000 from trust accounts while managing three South San Francisco properties. The complaint filed by Andrews-Bloom Investments LLC in San Mateo County alleges Klein concealed the withdrawals by providing altered bank statements and inaccurate financial reports showing account balances that were hundreds of thousands of dollars higher than the actual amounts held by the bank. 

The allegations against Klein mark the latest chapter in an often turbulent public career. Klein joined the San Carlos City Council in 2009 and became mayor in June 2011 following the death of predecessor Omar Ahmad. Just one month before taking office, Klein was arrested on suspicion of driving under the influence while returning from Ahmad’s funeral. The San Mateo County District Attorney’s Office later declined to file charges after tests found his blood alcohol level was 0.07%, just below California’s legal limit, according to the Almanac. 

Klein resigned from his company on May 21, 2026, citing a “serious medical issue,” before the alleged fraud came to light, the second complaint states. After the property owner terminated the management agreements, the complaint says, Klein’s attorney informed the company that he was in a rehabilitation center through June 30.