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Conducted by: Made at the request of: Submitted to: Regarding complainant: Completed on:

Nedy Warren, Esq. Los Angeles Memorial Coliseum Commission Donovan Main, Esq. and David Michaelson, Esq. Tony Estrada February 28,2011

Scope of Investigation ................................................1 Witnesses Interviewed................................................ 2 Allegations and Factual Findings ........................................ 3

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Allegationl................................................... 3 Allegation 2 ................................................... 7 Allegation 3 ....................... .......................... 10

Allegation 4 ............. ..............................:..... 10 ................................................... 11 Allegation 5 .._... _ ,__, _...r., ~ -~ , r .- ~... ,.._ r.. -.., ,, , ,,,,,,,,, r . , r.,. ,.., ,....a_~.. _ ..... _ . ---------~I~gatio~_6...r., . ................................................... 13 Allegation 7 Verification ........ ................................................ 13

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Privileged &Confidential -- Report of Investigation

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The Los Angeles Memorial. Coliseum Commission, by and through its legal counsel, retained Investigator Nedy Warren, Esq. to investigate numerous allegations made by Tony Estrada, Owner of Services for All Events( "SFAE") regarding the improper management and operation of the Los Angeles Memorial Coliseum and Sports Arena ( "LAMCSA"). Estrada, through SFAE and other entities, has provided labor services to LAMCSA for over a decade. In a series of facsimile transmissions to counsel for LAMCSA (collectively at Exhibit 14), Estrada alleged that (1} former General- Manager Patrick Lynch accepted money from SFAE which belonged to LAMCSA; (2) former Assistant General manager Todd Destefano's dealings with outside promoters was a conflict of interest with his employment with LAMCSA; (3) Des#efano and Director of Operations Michael Jacobo used SFAS employees during working hours to perform non-LAMCSA work at Destefano's home in Pasadena, CA;(4) Destefano was paid with cases of vodka in exchange for placing liquor ~~ advertising on LAMCSA's freeway sign, without a contract; (5) Jacobo allowed stadium ~~ field paint to be stolen and/or taken off premises by his workers;(6) Lynch allowed payroll irregularities to continue for years at LAMCSA; and (7) Jacobo directed the staging of a workplace injury so that it would negatively impact the workers' compensation premiums __. _..__., __ _......_ __ ------fot~F~E. (~ee-F~chibit_14,_~~~~;-1-4;~5~r~~~5r --------_~___ _ In this ~ report, factual findings are classified as substantiated, unsubstantiated or un#ounded. Substantiated allegations are those established by actual proof or competent corroborating evidence. Unsubstantiated allegations are those which may be true, but unable to be verified, corroborated or confirmed by the available evidence. Unfounded allegations are those contradicted_ by competent evidence or not based on factual or realistic considerations. Based on the information and evidence available, I am able to make the following factual determinations: Substantiated: Sufficient evidence reveals that from August 10, 2006 through January 20, 2011, SFAE made weekly payments to Lynch representing approximately $1.00 to $1.25 for every hour of labor billed by SFAS to the LAMCSA. While the intent behind this arrangement is in dispute, Lynch did accept a total of $394,716.01 in payments frorrr SFAE during this time frame.

_ _... _.

Privileged & Gon#ic~~ntia! -- Repzrt~ csg Investic~atior~

Substantiated: Sufficient evidence reveals that, with Lynch's approval, Destefano accepted compensation from at least one outside promoter (Insomniac).for his work on this promoter's events at the l~4MCSA while he was still employed by the LAMCSA. Substantiated: Sufficient evidence reveals that Destefano, with the assistance of Jacobo, utilized the services of at least.two SFAS employees during working hours to perform non-LAMCSA work at Destefano's personal residence. Unsubstantiated, in part: There is insufficient evidence to corroborate the allegation that Destefano was. paid with cases of vodka in exchange for placing liquor advertising on LAMCSA's freeway sign; there is, however, sufficient evidence to determine that no contract existed for that signage and ~LAMCSA received no compensation in exchange. Unsubstantiated, in part: There is insufficient evidence to corroborate the allegation that Jacobo allowed stadium field paint to be stolen and/or taken off premises by his workers; there is, however, sufficient evidence to determine that are no controls in place at LAMCSA to monitor inventory, creating an environment where loss could easily occur. Unsubstantiated: There is insufficient evidence to corroborate the allegation that Lynch allowed payroll irregularities to continue for years. Unsubstantiated: There is insufficient evidence to corroborate the allegation that Jacobo directed the staging of_a workplace injury so that_it would negatively impact the workers' compensation premiums for SFAE.

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interviewed the following witnesses on the dates indicated. I recorded each interview with the permission of each witness. The transcripts of those interviews are attached to this report as Exhibits 1 through 13. I informed each witness that (1) I had been retained by the LAMCC to conduct an independent investigation into complaints regarding the operation and management of LAMCSA; (2) I did not represent LAMCSA or any of its employees; (3) I would keep the interview confidential from other witnesses and outside sources and requested they keep the interview confidential as well; and (4) it was illegal for LAMCSA or its employees to retaliate against them for participating in the investigation. interviewed Patrick Lynch three times in an attempt to obtain his response to, among other things, allegations regarding his improper receipt of LAMCSA funds via SFAE. He declined to fully answer those questions and, instead, submitted a written statement
Privileged & ~anfidPntia -- Repor# of lnvesfiigakian 2

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through his attorney, CarF Capozzola, Esq. (Exhibit 16}. I also attempted to interview Todd Destefano a second time in an attempt to obtain more details regarding his involvement with outside promoters. Destefano did not return my telephone calls for a second interview. ,. .. :. r~ j~
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Bracamonte, Miguel Destefano, Todd Estrada, Antonio R. J~cobo, Michael A. Joyner, Robert Lederkramer, Ron .Lee, Jon Lynch, Patrick

Exhibit 1 F~chibit 2 Exhibit 3 Exhibit 4 Exhibit 5 Exhibit 6 Exhibit 7 Exhibit 8 Exhibit 9 Exhibit 10 Exhibit 11 .Exhibit 12 E~chibit 13

December 17, 2010 January 21, 2010 December 1, 2010 January 21, 2011 December 7, 2010 :November 16, 2010 December 10, 2010 November 16, 2011 January 20, 2011 February 22, 2011 December 17, 2010 December 17, 2010 December 17, 2010

Renderos, Maribel Sepulveda, Albert Smith, Thomas

A~6~~~~~+ar~~ end F~ct~a~1 F6~~ir~gs

1. Allegation: Patrick Lynch has accepted money from SFAS which belongs to the LAMCSA. Factual Finding: Substantiated. By way of background, Lynch and Estrada have known each other since at least 1994, when Lynch came to the LAMCSA. At that time, through another company called Mastercare, Estrada provided labor services to LAMCSA and continued to do so for a few years until Estrada left the business. In February 1999, at Lynch's request, Estrada returned and agreed to provide consulting services to LAMCSA. In 2002, Estrada created Event Support Services and began to also provide labor services to the LAMCSA. (Exhibit 3, p. 8). He later changed the name of his company to Services for Alt Events; whrch continues to provides labor for cleaning, event setup and event changeover. He bills the LAMCSA weekly for all hours his employees worked the prior week. (Exhibit 6, p. 4). In

Priviieg~c~ & ~oflfidentiai -- R~~ort of Investigation

addition, Estrada receives a consulting fee, from which he pays his two administrative assistants who also work at the LAMCSA facilities. (Exhibit 3, p. 6, 14-15; Exhibit 6, p. 2). In mid-2006, the idea of Lynch managing or taking over Estrada's business was created. Lynch claimed it was Estrada's idea. Estrada claimed it was Lynch's idea. Estrada alleges that Lynch asked him to raise his hourly fees so that Lynch would not look bad by having to raise them after he took over the- business. Lynch denied making the request. Nevertheless, both Lynch and Estrada admit that Estrada increased his rates in June 2006 by $1.25 per hour. (Exhibit 14, p. 54; Exhibit 16, pp. 3, 7). Estrada claimed he confirmed this arrangement in writing with Lynch in .July 2006: Upon approval of billing rates increase requested 06-15-06 and effective 07-02-06, Event's Facilities Services Inc. agrees to pay Patrick Lynch for Event Consulting Services $1.25 per each hour paid to workers providing change over, porters &maids, special projects, preparations and clean ups services, at Los Angeles Memorial Coliseum and at Los Angeles Memorial Sports Arena. This agreement is subject to changes per annual changes on the different insurance premiums. This agreement shall be for one year commencing on August 1st 2006. This agreement is subject to renewal per both parties agreement. At renewal time Event's Facilities Services Inc. shall retain Watch one &two services, Mr. Estrada shall retain the consulting fee plus renegotiations terms and conditions, to be reached at renewal time. Mr. Lynch shall take over all other services August 1st 2007 or sooner per both parties agreement. (Exhibit 14, p. 55). Lynch denied ever seeing this document. (Exhibit 9, p. 7). However, it is undisputed that Lynch at least entertained the idea long enough to speak to then LAMCC President Yvonne Burke, who apparently told Lynch it was not a good idea to manage Estrada's business while acting as General Manager. (Exhibit 3--Estrada, p. 13; Exhibit 16--Lynch, p. 3).1 Lynch claimed that was the end of the idea. Estrada claimed that even though Lynch decided not to take over the business, Lynch told Estrada to go ahead and pay him the difference in the increased rates anyway (i.e., $1.25 per hour. Estrada began making those payments on August 10, 2006. Exhibit 17 is a summary of every payment made from SFAE to Lynch from August 10, 2006 through the
In my second interview with Lynch, he vehemerrtly denied talking to Yvonne Burke (Exhibit 9, p. 5) but later admitted to doing so in his submitted statement(Exhibit 16). Privileged &Confidential -- ~2~port of Investigation 4

. ~ -

last payment on January 20, 2011? Exhibit 18 are the documents which form the basis of the summary at Exhibit 17. Each check from SFRE to Lynch is supported by a breakdown of hours billed to the LAMSCA, in apparent compliance with the unsigned July.6, 2006 agreement. The checks from August 10, 2006 through January 25, 2007 appear to have been endorsed by Lynch and deposited into a personal account at Washington Mutual Bank. (Exhibit 18, pp. 1-59). On February 1, 2007, Lynch opened two accounts at Washing#on Mutual Bank in Miami, Florida (Accounts 100-81 2291 1 and 884-0334241). (Exhibit 18, p. 60). The remainder of the payments from SFAE to Lynch were deposited into Account 100-81 2291 1. By March 2007, Estrada began endorsing the checks with a stamp of Lynchs signature and depositing them directly into the account. (Exhibit 18, p. 73). The account statements were mailed to Estrada's home address in Miami and Estrada would-later give_ Lynch the bank statements along with copies of the weekly checks. In my first interview with him, Lynch initially stated that it was Estrada who opened the account in .Miami and denied having any knowledge about its purpose. (Exhibit 8, p. 12-13). He denied having any involvement in the arrangement for SFAS to pay him a weekly fee based on SFAE's hours billed to the LAMCSA. (Exhibit 8, p. 18-19). In our second interview, he declined to discuss the topic altogether, except to say that it was a personal matter and had. nothing to do with LAMCSA business. (Exhibit 8, p. 6-7), By the time of our third interview, Lynch was represented by counsel and. did not allow any questioning on this topic. Instead, in his written statement, submitted by his attorney, Lynch claimed that he "set up an account with Estrada in February 2007" for the purpose of maintaining and- improving a boat they purchased together back in 2000. [I)n 2000 we bought a boat together. When we were closing we had a disagreement as to negotiations and contribution of funds. I ended up paying the downpayment, closing costs and doing the financing myself. At the time I had a reasonable house mortgage, was making $275,000 per year and had no other debt and have never needed his financial assistance as is evidenced by my excellent credit rating. After further discussions he requested to become a full partner and (allowed -him to do so. I was responsible for maintaining watch over the boat and paying for other

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2 After the January 20, 2011 payment, Estrada stopped making the weekly payments to Lynch. Although he continued making the payments, he made the checks out to LAMCSA, essentially returning LAMCSA's monies back to it. Estradas reason for not discontinuing these payments long ago is that he wanted direction ftom the LAMCC and have it instruct him on what should be done. (Exhibit 14, p. 61). Privit~ged &Con#iden~ia# -- ~t~part caf Investiga#ian 5

incidental expenses. I agreed to watch over the boat, clean it, do upkeep etc.. He contributed toward repairs during this time. [Estrada] deposited monies to the account which I accepted as a contribution to the purchase, expenses, maintenance and contemplated improvements to the boat. Up until this time he had taken the payment book and made all the mortgage payments for the boat. -4J. I do not find Lynch's explanation credible for several reasons. First, (Exhibit 16, pp. 3 the bank statements.reveal that the account is in Lynch's name only. (Exhibit 18, p. 477). Second, the boat was not a joint pchase as is evidenced by the Bill of Sale and related ownership documents. (Exhibit 19). Third, even if Estrada agreed to become a "full partner" as Lynch claims in his statement, the purchase price of the boat was $140,000, leaving Estrada's obligation at $70,000 plus cost of maintenance, etc3 However, the amount of money SFAE paid into Lynch's accounts--$394,716.01--far exceeded Estrada's obligations- on .the purchase price and maintenance costs of the boat. Finally, SFAE's payments to Lynch began in August 2006, well before February 2007 when Lynch claimed they agreed to open an account for boat maintenance. The payments to Lynch more logically coincide with the unsigned July 2006 agreement (Exhibit 14, p. 55) more than they do with Lynch's boat agreement explanation (Exhibit 16, pp. 3-4). Even assuming that the money paid to Lynch was for the boat--or even some other unknown personal arrangement between Lynch and Estrada4-there is no explanation for why Lynch would accept money from Estrada in the form of SFAE checks based on hourly wages billed to LAMCSA. Lynch did not deny accessing and using the funds in the account for personal reasons. 1Nhile there are many unexplained withdrawals from the account, Lynch admitted to withdrawing roughly $100;000 to purchase a home in Massachusetts for a family member. (Exhibit 16, p. 4). Although $323,914.39 was deposited into the second account (No. 1 00-812291 1), only $70,856.13 remained as of January 20, 2011. (Exhibit 17, p. 8). It is clear that Lynch engaged in a long-term transaction which was in conflict with the proper discharge of his duties. He accepted money from someone other than his
Estrada admitted to once being partners on the boat and paying Lynch monies for the mortgage and mainte3 -44; Exhibit 1 ~. nance of the boat--$28,500 from September 2007 through April 2010. (Exhibit 3, pp. 43 ~! -~~ civil Estrada also alleges that Lynch was going to use the money in that account to "pay ofP' or settle an existing 4 claim against LAMCSA. (F~ct~tibit 3, pp. 30-32; Exhibit 14, p. 25). Pr'svilegeci &Can#identia( -- Report of 1r~vestigation 6

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employer, LAMCSA, which could reasonably be interpreted as an attempt to obtain .personal financial gain or influence his actions with respect to LAMCSA business (e.g., continuance of, or favorable rates for, SFAS services). It is also clear that Estrada voluntarily participated in this arrangement for years, without any duress or coercion from Lynch, and without any regard for the financial loss to the LAMCSA. 2. Allegation: Todd Destefano's dealings with outside promoters was a conflict of interest with his.employment with LAMCC. Factual Finding: Substantiated. According to Lynch, he promoted Destefano to Assistant General Manager for Events approximately five years ago. (Exhibit 10, p. 3). While Destefano was still an Assistant General Manager, he told Lynch that he had created his own company "and he was doing some things and he was starting to branch out into some other areas and that it wouldn't impact anything that he was doing. He was doing it on his own time and it wouldn't impact anything he was doing for [LAMCSA]." (Id., p. 5). In early 2010, Destefano came to Lynch and said "he was going to be dealing with these guys on a more significant level" and would be compensated by Insomniac and possibly other promotors. (Id., p. 6). Lynch stated that he spoke with counsel for(JaMCSA, Donovan Main, about the arrangement: told him that Todd was going to be working with the promoters, and I gave him a conceptual layout that said okay, he's going to be working with them, but he's not making any financial decisions -- those are done by me and Ron Lederkramer -- and that we do the financial settlements. He works on behalf of both parties accumulating all the information, all the bills, et cetera, from the different people, but the financial settlement would be done by us and then with the president of Insomniac and that we would be doing the financials. (Id., p. 8). He stated that Main "thought it sounded fine." I spoke with Main on February 22, 2011 (unrecorded) who did recall a conversation with Lynch regarding Destefano. According to Main, Lynch said that Destefano was thinking of doing consulting work for some promoters. He said they were not promoters doing events with LAMCSA but could be in the future. Main told Lynch that he could not give him a verbal legal opinion. He said that in order to give a legal opinion, it would have to be in writing and fact intensive. Because Lynch did not give Main any, details regarding the promoters or the financial arrangements, Main gave Lynch an overall lay of the land regarding conflicts of

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Privi9eged ~ Confiderstial -- Re~aart of investigation

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interests (i.e., conflict forms with the County of Los Angeles, financial disclosure forms from the State of California, no financial interest in the contract with the outside entity, etc.). Lynch said that if the arrangement happened, there would be a complete financial firewall: Main responded that would be wise but it would have to entail more than just who is signing off on the contracts. Main did not speak to Lynch again about the topic. Lynch then approved Destefano's proposed involvement with outside promoters and did not feel that the arrangement would hinder Destefano's ability to fulfill his duties at LAMCSA. (Id., p. 9). He removed Destefano's Assistant General Manager title in early 2010 and reverted him,back to Senior Event and Sales Manager. (Id., p. 3). At that time, Destefano earned a salary of roughly $90,000 and an annual bonus of $60,000. After the title change, he earned only his salary but not his bonus. (Id., p. 11-12). Lynch did not, however, change Destefano's duties (Id.). Destefano managed at least three events during 2010 with Insomniac and Go Venture. (Id., p. 10). When Lynch recently shared with current LAMCC President, David Israel, that Destefano worked for both LAMCSA and outside promoters Insomniac and Go Ventures, Lynch stated that Israel asked Lynch to put a stop to the arrangement: Q: -- to 90K? So what happened in late 2010 or early 2011 that prompted his resignation? A: Vt/ell I -- we were preparing for a Commission mee#ing and f brought up to David Israel, the president -- we're going -- I always talk to the president about setting the agenda for the next meeting and doing all the details of how the meeting is going to run, who's going to say what. t told him that the presentation for the Electric Daisy Festival for this coming year we knew was going to be very controversial, that I would be doing a lot of the work, presentation. Todd would be my backup but because Todd was working for both sides -- both companies, that I had to be the lead with the other law enforcement agencies and officials. And he said, "What?" You know, he was very shocked. And so I told him. I said, "Yeah." I said, "Todd works for them and for us." Q: Okay. Got it. Okay. So he learned that this was --

A: So -Q: -- the situation.

Privileged & ~onficlentiat -- Report of inv~stigatior~

A: -- Israel told me that there's no way. He can't work both sides. He's got to work one or the other. Go confront him right now. Ask him to make up his mind right now. So i did. I went and confronted-Todd. And I said;. "Todd," you know, "here's the situation." And he said, "Okay. i don't like it, but I understand and I'll go work for the promoters."

In my first and only interview with Destefano, he stated that he began working.at LAMCSA in 1999 as an Event Manager and was responsible for bringing revenue to the venue by booking events and film shoots. (Exhibit 2, p. 2). Roughly five years later, he was promoted to Assistant General Manager. That title was removed approximately a year ago due to his increasing involvement with outside promoters. (Id., p. 3). On February 2, 2011, Destefano resigned his position to "have better opportunities to work on events, to be an event producer instead of a venue. guy, to go out and be an event producer basically" (Id.). Prior to his resignation, he had done work for Insomniac as a producer, "in charge of trying to make sure. everything ran as smooth as possible--front of house," and was compensated with a set fee. (Id., p. 14-15). He denied having done.any previous work for Go Ventures. (Id., p. 15). It is clear that Destefano engaged in transactions which were in conflict with the proper discharge of his duties. He accepted monies from sources other than his employer, LAMCSA, which could reasonably be interpreted as an attempt to influence his actions with respect to LAMCSA business (e:g., favorable treatment for these outside sources). At the very least, he engaged in outside business activity which could reasonably be expected to interfere with his ability to properly execute his duties. A simple example is his successful effort on behalf of Insomniac and Go Ventures to secure a favorable sponsorship from Russian Standard Vodka for those producers` events at the LAMCSA. LAMCSA received no monies from that sponsorship and even provided freeway signage at no cost, without a contract. (See Allegation No. 4, below). In that instance, the LAMCSA was essentially paying Destefano for work that did not directly benefit it.

f~rivtleged ~ Confidential -- Report of roves#igatian

3.

Allegation: Todd Destefano and Michael Jacobo used SFAE employees during work hours to perform work at Destefano's home in Pasadena, CA. Factual Finding: Substantiated.

Destefano admitted having Jacobo take LAMCSA trucks to his house one day to remove trash and that they "might have had one or two guys with us." (Exhibit 2, p. 18). He claimed it was after the workday, occurred once or twice at best, and he paid them $20 or $40 cash. (Id., pp. 19-20). Jacobo confirmed that Destefano asked him for help to remove trash-from his house using the company trucks. (Exhibit 4, p. 14). He and another LAMCSA employee brought a couple of guys who were working that particular day and, although he did not recall the time of day, he did- have to pull them off of whatever they were doing at the momeRf. (Id., p. 15, 17). Thomas Smith, a SFAE employee, recalled #hat he was driven to Destefano's house on October 27 and 29, 2009 during the middle of the day to remove trash from Destefano's home. (Exhibit 13, pp. 2 Exhibit 14, p. 7). -3; It is clear that, at least on these two occasions in October, Destefano and Jacobo utilized_ the labor of SFAS .employees to perform non LAMCSA work off premises during working hours. It is also clear that it is not.out of the ordinary for LAMCSA management to use the services of its employees, when they are off duty, for personal projects. (Exhibit 6, p. 7; Exhibit 2, p. 16-17; Exhibit 5, p. 30). 4. Allegation: Todd Destefano was paid with. cases of vodka in exchange for placing liquor advertising on LAMCC's freeway sign, without a contract. Factual Finding: Unsubstantiated, in part. In connection with a Russian Standard Vodka sponsorship deal that Destefano brokered on behalf of promoters Insomniac and Go Venture, he offered to Russian Standard Vodka the opportunity to have signage on LAMCSA's freeway sign for 60 days: [BJasically the idea was -- my concept with him was let's move past just triggering 1000 cases equals X dollars. Let's do some advertising on it as well. I can offer the 110 freeway sign. We can do some other things inside the events -- inside all the events and then we would make aclear-cut separation of a marketing deal and a usage deal. So all I was trying to do was take our usage deal and increase it by showing him what we could do for him.

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Privileged &Confidential -- Re#~ort cif I~vestig~tEan

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(Exhibit 2, pp. 6; 8). Destefano did not prepare a contract for the signage and denied having knowledge of the process for doing so. (Id., p. 10). Destefano denied receiving any compensation, either in the form of money or product, in exchange for the signage. (Id., p. 11). LAMCSA had no contract with Russian Standard Vodka and received no compensation for the placement of the 60 day sign. (Exhibit 6, p. 5; Exhibit 7, p. 8). Jon Lee (Director of Marketing) is responsible for advertisements on the freeway sign and he indicated that advertisers normally go through him for placement. (Exhibit 7, p. 5). In this instance, they went through Destefano who, in turn, instructed Lee to put up the advertisement. (Id., p. 6). Lee asked during a weekly staff meeting whether the advertisement should go up and Lynch said to put it up. (Id., p. 6-7). Thus, it is clear that no contract existed for the signage and LAMCSA received no payment from Russian Vodka; however, there is insufficient evidence to determine that Destefano personally was paid anything in exchange. 5. Allegation: Michael Jacobo allows stadium field paint- to be stolen and/or taken off premises by his workers. Factual Finding: Unsubstantiated, in part. Jacobo stated that he orders a significant amount of paint each year_ based on LAMCSA's calendar for the upcoming year and that there is usually paint leftover. (Exhibit 4, pp. 17-18). He explained this year's surplus on events and filmings that were scheduled but did not occur. (Id,, p. 19). He denied any knowledge of missing paint. (Id., p. 18-19). He admitted that he does not have an accurate accounting of LAMCSA's paint inventory (his "field guy," Salvador Negrete keeps track on a piece of paper) and admitted it is not a wellmaintained record. (Id., p. 21). The only witness who indicated he saw LAMCSA employees take paint from the premises was Alberto Sepulveda, a SFAE employee. I found his statement less than credible primarily because he claimed to have seen every employee who reports to Jacobo stealing materials, drinking on the job, leaving early for lunch and coming in late at Jacobo's direction. (Exhibit 12, p. 9). He had never personally seen Jacobo take materials or engage in these activities. (Id., p. 4). Sepulveda believed that Jacobo's workers meant him harm and he had to watch his back. (Id., p. 12). He made broad accusatory statements, but without any supporting details. (Id., p. 14). Ron Lederkramer (Assistant General Manager/Finance) along with Rob Joyner (Special Projects/Facility Operations) conducted an audit of LAMCSA's paint inventory in November 2010. (Exhibit 15, pp. 1-2; Exhibit 6, p. 17-18; Exhibit 5, p. 8). Joyner looked at field paint for the last two fiscal years by reviewing the event calendar and cross referencing it with
~ridiieged & Coa~fiden#ia[ -- Repcart of Investigatian 11

specific event files (i.e., bills, invoices, costs, etc.). (Exhibit 5, p. 8-9). The problem with the audit is that it did not review actual inventory but instead operated on an assumption of "no inventory" to start with and assumed how much paint would be used for particular events. (Id., p. 9). His audit revealed that in the year prior,. there was no surplus of field paint, but during the current year (when Jacobo presumably was aware of an audit being conducted), they were estimated to have a significant surplus. (Id., p. 12). When asked what his conclusions were from his audit, Joyner replied "I don't know. The only thing that can- anticipate is that we ordered way too many during this period." (Id., p 15). He denied seeing Jacobo or any of his workers take field paint from the premises. (Id., p. 16). Without more, I cannot factually conclude that Jacobo himself stole LAMCSA paint or directed his employees to do so. 6. Allegation: Patrick Lynch has allowed payroll irregularities to continue for years. Factual Finding: Unsubstantiated. When Lynch brought Estrada back to the LAMCSA in 1999, Estrada began auditing the operations and- found payroll "ghosting" or irregularities where workers were paid even though there was no proof that they were present. He claimed to have saved IJaMCSA money by decreasing costs and increasing basic controls. (Exhibit 3--Estrada, p. 6-7). Estrada referenced timecards from as far back as 1999 and presented many timecards without even a year designation. (Exhibit 1, pp. 16-24, 26-46). Given the scope, cost and time allocated for this investigation, it was impossible to go back and evaluate the veracity of each timecard. For purposes of this specific allegation, it is clear that Estrada's efforts curbed, if not eliminated, the payroll discrepancies over time and it no longer occurs the way he alleged it used to. (Exhibit 3, p. 29-30). There is no evidence that Lynch had any direct involvement in how or when employees filled out their timecards or how those timecards were submitted for payment. If anyone had the responsibility to review and monitor the veracity of timecards, it would have been Lederkramer, not Lynch, since Lederkramer was responsible for oversight and payment on those timecards. (Exhibit 6, p. 8).

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Privileged & Gonfidentia! -- F~e{~or~ of Envestigation

12

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7.

Allegation:. Michael Jacobo directed the staging of a workplace injury so that it would negatively impact the workers' compensation premiums for SFAS. Factual Finding: Unsubstantiated.

On Aprif 24, 2009, one of SFAE's employees, Maria Rodriguez, fell through a piece of plywood while cleaning the seats and fell down several feet to the coliseum floor where she suffered injuries. While several SFAS employees were near the vicinity of Rodriguez when she fell, no one actually saw her fall.5 SFAS employee Maribel Renderos was also cleaning near Rodriguez but did not see the fall.- The statements of the employees present during. the- set up and changeover differ regarding whether Jaeobo was aware of the existence- of the plywood and/or whether a repair needed to be made: Miguel Bracamonte indicated that he told Jacobo there was a hole near some stairs but he did not know if that was where Rodriguez fell (Exhibit 11, pp. 17-18; Exhibit 1, p, 2). Jacobo was not present when the accident happened. (Exhibit 4, p. 7). He did not recall any issues with placement of plywood or missing panels. (Id., p. 9). He acknowledged that there was a section that was blocked of with wire and yellow tape to prevent access but did not know whether that was where Rodriguez fell. (Id., p. 10-11). He denied having any conversations with Rodriguez,or her husband regarding the accident. (Id., p. 12). There is no corroborating evidence that Jacobo directed Rodriguez to purposefully fall through the plywood and injure herself.

conducted this investigation and prepared this report without assistance, influence or review from any other person or entity. I made my factual determinations based only on the facts, evidence and testimony presented to me. This concludes my investigation. remain available to answer any questions or conduct any requested follow-up.

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5 Miguel Bracamonte who worked set up did not see her fall. (Exhibit 11, p. 9). He also did not know who was responsible for placing the piece of plywood at the site of the accident. pd., p. 10). Francis Gonzales and Jose Juarez were also present during the changeover with Rodriguez and they did not witness the accident. (Id., pp. 14-15). Privsie~e~! & ~onfidenti~t -- ~tepos-~ oaf 6naestigati~n 13