A current and a former employee of the microscope services department at the University of California, Davis, were arrested this morning by campus police and charged with multiple counts of felony embezzlement, forgery and conspiracy. Peter Karl Labermeier of Davis and Randall Lloyd Butler of Sacramento are being held in Yolo County Jail and Sacramento County Jail, respectively, on $10,000 bond. Labermeier resigned from the university Feb. 1. Labermeier is charged under sections 503, 504, 508, 470 (a) and 182 (a) (1) of the California Penal Code. Butler is charged under sections 503, 504, 508 and 182 (a) (1). Suspecting irregular activity, the campus's internal audit office initiated an extensive audit of microscope services about two months ago. Auditors discovered what they believed to be criminal behavior and referred the case to the UC Davis Police Department. Both the audit and the police investigation concluded that Labermeier and Butler had embezzled equipment, misused the microscope services facility and conducted personal business during work hours. Losses were preliminarily estimated at $3,400. When campus auditors have completed their study, they will prepare a report of their findings plus recommendations for preventing such irregularities as those alleged to have occurred in the microscope services department.