LTC 085-2011 Transmittal - Internal Affairs MIAMIBEACH
OFFICE OF THE CITY MANAGER ,, 5 , s -_r F �'
NO. LTC # 085 LETTER TO COMMIS IN
I -
J
TO: Mayor Matti Herrera Bower and Members of the City Commission.
FROM: Jorge M. Gonzalez, City Manager
DATE: April 11, 2011
SUBJECT: Transmittal --Internal Affairs Investigation Report of the Miami Beach Police
Athletic League
The purpose of this Letter to the Commission (LTC) is to provide they Mayor and City,
Commission with the Internal Affairs Investigation Report of the Miami Beach Police
Athletic League.
Attached please find the memorandum report submitted by Carlos Noriega, Chief of
Police.
Please contact me if you have any additional questions.
JMG:CN:RAM:MG:tr
F\CMGR \$ALL \LTC 2011 \LTC PAL lA Report Trarismittal.docx
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MIAMI BEA H
City of,Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida.33139, www.miamibeachfl'.gov
MEMORANDUM
TO: Jorge M. Gonzalez, City Manager
FROM Carlos Noriega, Chief of Police
DATE: April 11.; 2011
SUBJECT: Internal Affairs Investigation Report of the Miami Beach Police Athletic
League
This memorandum , wild serve to provide information relative to the concerns voiced by
Mr. Steve Cohen during the March 9,` 2011 City. of Miami 'Commission meeting. with
regards to the Miami Beach Police Athletic League Internal Affairs Investigation Report.
.It is important to note that in response to Mr-.- Steve Cohen's remarks the following is
significant to. consider:
1. Mr. Cohen was a member of the P.A.L. Executive Board, including Vice
President, during the period of time where most, if not 811, of his allegations of `
inappropriate activity by the P.A. L. were occurring.
2.: The Internal Affairs - investigation was initiated by Chief Noriega (not Mr. Cohen)
once the allegations of possible .criminal . activity were brought to his attention.
3. Mr. Gregg Francis, the past president of the P.A.L. as mentioned several times
by .Mr. Cohen, resigned from his position but subsequently did not lose. his job at
Mango's as a result of anything having to do with the P.A.L. (according to
Ma'ngo's owner David Wallach):
4. Chief Noriega directed Division Chief Riley to resign from the P.A.L-. Executive
Board, at Feast until the Internal Affairs investigation was concluded. . This was
done as a precautionary measure. to 'remove any perception of a conflict of
interest in this matter between the P.A.L. and the. Police Department.
5. Finally, the P.A.L. is a private organization which is not. run by the Police
Department. Due to the close partnership with the Police Department however,
Chief Noriega made an immediate determination to provide "investigative.
oversight ..over the allegations in question through the, Internal Affairs Unit
ensuring accountability and transparency throughout.
Attached please find copies .of the completed Internal Affairs Investigation Report of the
Miami Beach Police Athletic League. This report was initiated by the Chiefs :Office on.
July 21, 2009. and completed on September 28, 2010 by Sergeant Osvaldo Ramos. ..
If there are questions regarding this matter, please feel free to contact Captain J. Elmore
of the Miami.Beach Police Department, Internal Affairs Unit at 305.673.7920.
CN /MG
MIAMIBEACH
INTERNAL AFFAIRS REPORT
I.A. CASE NUMBER: 12009 -030
M.B.P.D. CASE NUMBER: None
_ .. COMPLAINANT(S): .Office of the Chief
- DATE OF INCIDENT: Previous36 mornths from date reported.
DATE REPORTED:, July 21 2009
INVOLVED PARTIES: Police Athletic Leag "ue (PAL-) Board
Members
INVESTIGATOR: Sergeant Osvaldo Ramos"
ALLEGATION:
Mr. Steve .Cohen, a formes vice-
president of the PAL board, alleged PAL
funds and assets were being
misappropriated by members of the PAL
Board: Mr. Cohen first raised his
concerns to the Miami -Dade
Commission on Ethics and Public Trust,
V who referred him to the Criminal
Investigations ` Division .:(CID) of the
Miami Beach, Police Department. The
investigation . was forwarded to the
Internal Affairs Unit of the Miami Beach
Police Department by the . Chief of ;
Police.
FLORIDA STATE STATUTES: Violation 1: Theft FSS 812:014, by _
Misappropriation of Police Athletic
League (PAL) funds; a non for profit
organization
DISPOSITIONS:
Violation 1: UNSUBSTANTIATED.
2009 Page 1 of 27 _ 12009-030
.Complainant: Office of the Chief
Subject`. PAL Executive Board
PERSONS INTERVIEWED:. Mr. Steve Cohen (Complainant)
Mr. Gregg Francis (Witness)
Ms. Lori Freedli,ne (Witness)
Mr. Matthew Krieger (Witness)
" Mr. Bernard•Winer. . (Witness)
Mr.. Robert Jenkins (Witness)
Officer Michael Veski (Witness)
PERSONS NOT INTERVIEWED: Ms: Lynda Veski
Received certified letter: failed to respond
Ms. Maria Calzon Cruz
Received certified letter: failed to respond
Mr: Kenneth Stowe
Received certified letter: failed to respond.
Mr.- Lyle Stern
Received certified letter: failed to respond
At the conclusion of the criminal
investigation, it was determined that
there were no administrative violati ons
in connection with this allegation, Based
on the Lack of 'administrative violations,
the following employees were not
i ntervi ewed Detective Al kareem Azi m,
Division Chief William Riley and 'Officer.
_. Harry
C HRONO,LOGY OF FACTS:
July 15, 2009
A Special Committee of the Board of Directors of the PAL convened. The members of
the Special Committee" present for the meeting were, Mr. Gregg Francis (the President
)Chair, g ( Director), Officer Robert .
of the Board and the Chair , Officer Harr Morgan Executive Director ,
l Jenkins (Vice President), - Division Chief William Riley. (Treasurer), Ms.. Lynda Veski
(Past President), and Mr. Daniel H. Aronson Esq. Ms. Veski was, elected by the Board.:
to represent them in the meeting. Mr: Aronson was invited by the Special Committee to
oversee the legal issues concerning matters related .to :Mr. Bernie Winer (Contracted
Consultant). A s.ynopsis.of the meeting is as'follows:
• Mr. - Winer Was• a contrasted consultant for the calendar year of 2009 with an annual
compensation of $49,750. His principal duties were related to fundraising. The
Committee believed that Mr. Winer's involvement in the DNA Life •Program was not
_ authorized pursuant to established PAL protocols' and the program was run by a friend
of. Mr. Winer. Mr. Winer's involvement in a PAL sponsored white water rafting trip was
also questioned. Mr. Winer- not only participated in the trip but also brought his grand* -
son along. In the Committee's opinion, the trip was, not approved in accordance to
established PAL protocols.
= complainant: Office of the Chief Page 2 -of 27 i20 -
09 030
subject: - P'AL Executive Board
j
In the June 12, 2009 Special Committee meeting Division Chief Riley and Ms.. Veski
were. tasked to audit Mr. Winer's credit card charges, check requests and expense
reimbursements. Ms. Veski. advised that although s,he had reviewed all. the 2008
checks and charges,- she had only briefly reviewed the 2009 records. Division Chief
Riley stated that he had "serious concerns" about Mr. Winer's numerous charges,
checks and reimbursements. A synopsis of their review is as - Follows:
Mr. Winer had an American Express credit card , issued under his name for PAL
related purchases which. was tax- exempt.
* On May 2, 2008.a charge on his American Express card for an airline ticket on
I South West Airlines for his grandson (Jesse Roberts) from St. Louis to Ft.
I Lauderdale for $368.00.
o A note was attached to the .charge saying Mr. Wine'r owed the money and
a second note was attached saying . that, a donor, Mr. Mark Pickard had
paid it.
o This charge was related to_.the white water rafting trip.
Numerous charges on Mr. Winer's PAL credit card for unknown Lunches, dinners;
gifts, alcoholic beverages for payments totaling $2,5,00.00,
g a g pY g
Several, instances where, Mr. Winer made documented personal purchases on
the PAL credit card were he would keep a- "running balance or tab" for the
purchases without immediately paying them for several months.
A monthly American Online (AOL) charge of $25.90 o his PAL American
Express card for internet service at his home.
Monthly charges for a cell, phone he and other.PAL staff had purchased with PAL
funds.
Mr. Winer had a PAL Costco membership card - under his name - and ,his wife's
name and for other PAL, and non PAL staff. This card also provided for tax
exempt purchases.
o The membership fees were being paid by the PAL with 'no legitimate PAL
benefits.
On December 12 2008,. check # 8253 was issued to either'Mr. Peter Matthews
or Restaurant Depot for an invoice from Restaurant Depot which indicated -a .
purchase for large and expensive cuts of meat.
o No one including Officer Morgan (who had co= signed the. check) was
aware of any PAL event or function associated with this purchase..
Mr. 'Aronson discussed his preliminarily findings and the following.is a synopsis of those
findings:
Several inconsistencies between . the - PAL charter documents, filed with the
Florida Department of State and the PAL by- laws.
Several versions of the PAL by -laws are available and it was unknown which had
been properly authorized as Florida State Statues (FSS) 617 dictates.
o Mr. Aronson advised that by -laws cannot contain provisions -inconsistent
with the articles of incorporation.
Mr. Aronson- noted that it appeared to him that the PAL had beeri operating
without consideration of its Charter or its voting membership.
o Mr. Aronson advised that although FSS does not require not -for- profit
corporations to have members,.the PAL's charter specifically provides for
Complainant: Office of the Chief Page 3 Of 27 12009 -030
Subject:. PAL Executive Board,
a
and empowers both voting and non- voting members. f
o Mr: Aronson advised that in this regard, "members " -of the organization are
similar to shareholders. in for- p rofit organizations. with certain important
rights, which are separate and_ distinct, from the directors and officers of
the organization.
o Mr. Aronson advised that the PAL's Charter clearly states that the -voting
membership are all members in good, standing of the Miami Beach Lodge
B of the Fraternal Order of Police and*Associates.
o Mr. Aronson advised that according to the PAL Charter, amendments to
the charter and by -laws require a two - thirds (2/3) vote of the members -
present and voting at a regular or special meeting called for that purpose
with certain advance notice.
o Mr. Aronson advised that two PAL officers and directors are required to be ,.
elected by a vote of the PAL's members and .a meeting with that purpose.
o The Committee Commented on how none of the directors or officers had
been selected in the outlined fashion °in recent history.
Mr. Aronson advised about the various federal tax law requirements and
restrictions which apply. to PAL as an exempt (501 c3) non - profit organization to
include the requirement to prepare and file an annual information return on Form
990.
Mr. Aronson discussed the restrictions. and_ - sanctions under federal 'tax laws
regarding private_ increment and /or benefits.
Mr. Aronson requested an opportunity to address the PAL's Board of Directors
' and /or Executive Board.
During the meeting, Mr. Francis requested the Committee to reach a consensus and
recommendation on how to proceed in regards to the suspension of Mr. Winer. Officer
Jenkins commented that Mr..Winer's past with the PAL should be taken into account
when reaching a determination on , his future. Officer Jenkins felt that due to Mr. Winer's
contribution to the PAL, the Committee should settle with him and allow him to continue
collecting his contract pay through the end of the year in exchange for his resignation
and voluntary removal from the PAL.
Mr. Aronson advised the Committee that Mr.. Winer, contractually, was ' entitled to 60
days notice of termination, the possibility of Litigation is viable, additionally the expense,..
distraction, and, potential harm to the PAL should be considered. The Committee
unanimously determined and agreed upon these following recommendations:
® Mr. Winer would resign immediately as a consultant and member: of the PAL.
o Mr. Winer would• agree. not to seek or accept election or appointment to the
Executive Board prior to January 2011.
-Mr. Winer upon accepting the above requirement, would receive his. pay at his
current pay level through 12/31/2009..
Mr,. Winer would be •permitted, if he chose, to remain on the board of directors but
would play no active role prior to January 2011
Mr. Winer would agree to reasonable confidentiality, to non - disparagement
provisions and would fully cooperate with.'the internal investigation and audit o.f
the PAL.
Mr. Winer would be required to repay all amounts found improperly charged, paid
12009 -
Complainant: office of the Chief Page
4of27
_
Subject: RAt Executive Board .
or reimbursed to him, promptly upon request:
Mr. Winer's last three consulting . payments of the year would be withheld to
assure payment.
I Mr. Aronson advised that he believed that the Executive Board should be counseled
- regarding its fiduciary and other obligations under FSS and federal tax Laws . and
regulations before any settlement with or payments to Mr.. Winer was either authorized
or approved. The meeting was adjourned.
July 16, 2009
- Officer. Michael Veski sent an email to Ms:-Maria Cruz, resigning as the: Sergeant of
Arms of the PAL. Ms. Cruz the secretary of PAL:.at that time.. In that email,
Officer Veski wrote, "as, a police officer, I cannot allow myself to be a part of an
organization whose actions and /or decisions may be unethical, if not illegal.'
July 21, 2009
Sergeant Scott Flanagan and Sergeant Carolyn Chin of the,. Internal Affairs Unit
conducted a recorded interview of Officer Michael Veski, a current police officer.of the
City of Miami Beach Police Department. When Officer Veski was asked -for specifics of
the un- ethical practices, he, was not cooperative and was subsequently ordered to
answer the questions, posed .to him during the interview. Officer Veski stated he was
: not aware of any specific illegal acts committed by a member of the policedepartment:
Officer Veski stated that during the July 15 ' Executive Board meeting, which was open
to . the public -, .an attorney made allegations that the .board was conducting themselves
unethically. According to Officer Veski's statement, .that allegation prompted, him to
resign from the board so as to not associate ' himself with those accusations. Officer
Veski alleged that the current PAL President, Robert Jenkins, Chief Carlos Noriega and
other members of the Executive Board may have been privy to the specific allegations.
Officer Veski stated he believed the accusation was probably based on' violations of
either. by -haws, Federal laws, IRS regulations or ° violations (an IRS form.) in relation
to laws that govern non - profit organizations. Officer Veski did not share any other
pertinent information with the investigators and affirmed that his decision to resign was
solely based on the commentary made during the July 15 meeting._ He reiterated he
had no specific information of any illegal and/or unethical behavior by any member of
.the board.
For further details refer to the* audio recording or the transcript.
July 23, 2009
This investigation was assigned to Sergeant Wayne Jones of the Internal Affairs Unit.
Sergeant Jones compiled a list of all. the former and active members of the board. He
reviewed the resignation letter generated by Officer Michael Veski and the recorded
statement. All available documentation was gathered, and reviewed.. -As-- of:July 15,
2009 - the PAL Executive Board was comprised of the following individuals:
President Gregg Francis
Vice President Steve Cohen
Complainant: Office of the Chief Page 5. of 27, 12009 -030
Subject P'AL'Ezecutive °Board
® Vice President Lori Freedline
Vice President Reserve Officer Jenkins
- .Vice. President Matthew Krieger; Esq.
.Treasurer; Division Chief William Riley
Sergeant at Arms, Officer Michael Veski
�. Secretary -Maria Calzon Cruz
Executive Director, Officer Harry "Rocky" Morgan
July 31, 2009 .
The- Miami -Dade County Commission on Ethics and..Public Trust initiated their
investigation. reference the allegations by Mr. Cohen.
August 24, .2009
The Miami -Dade County Commission on Ethics and' Public Trust ended their
investigation when the investigator, Mr. Pinochet, was advised. the Miami Beach Internal
: Affairs Unit was conducting an investigation: ' Mr. Pinochet explained that due to the .
nature of the complaint, his office would defer the investigation to the police agency
which held the jurisdiction over matter:
August 3'1; 2009.
Mr." Cohen made 8 public records request for Officer_'Morgan's email for the period of
July 15 through August 31, 2009,
September 2009.
Sergeant Jones:' made a public records request for Officer Morgan and Mr. Winer's
email for the period of September 1, 2008 through September 1, 2009.
O.cto.ber 30 2009
was assigned as the new. investigator to. the case and reviewed all the information
pro vided'. to me: This - included Officer Morgan's emails, Special Committee Meeting
notes and other various information.. In reviewing Officer Morgan 's email , l found the
following emails to be pertinent to this investigation
On. April 29, 2009, at 0031 hours, Mr. Cohen authored an email and sent it'to
various individuals including Winer Morgan, Riley, Jenkins, Cruz, and: others
unidentifiable from. the .email address. The email was directed to the Executive
Board. The email's subject was questioning the relationship between. the
Kindergarten Cop and the DNA Program. Mr. Cohen in his email advised that
the original DNA program test had been done for kindergarten classes and that
the program was ready to, expand into the first and, second grade but he asked
that the .program wait until after the May Executive Board meeting ' because he ,
wanted to discuss some issues. Mr. .Cohen in his email outlines three. issues.
The first issue was that the first and the second graders are not served by the
Kindergarten Cops. The second issue was that the Program had' not been
Complainant: Office of the Chief Page 6. of '27 i 9
200 030
_ PAL..Executive -Board
subject:. = ..
approved to serve the first and second grades.. 'The,.third issue was Mr. Cohen
questioning the relationship between the Kindergarten Cop and the - DNA
Programs. Mr. Cohen stated in the email that the DNA program had over
$25,000 and that he wanted to delay the program a week so the Board could
approve the expenditures and ensure the money was spent "prudently."
On April 29, 2009, at 1457 hours, Officer Morgan responded to Mr. Cohen's
email and forwarded the email to all original recipients, advising that he was `ry
-going to respond to him .from the last issue to the first:. Officer Morgan in ,his
response - stated that "No relationship between the DNA- program. and
Kindergarten Cop program..." Officer Morgan stated the program was started at
the kindergarten .level because the officers were already in the schools at that
level. Officer Morgan advised that the program was already "set up" since the -
releases had already been sent to the children's parents and that - the donors had
stipulated the funding for First and second -graders. Officer'Morgan reiterated in
his email that the Kindergarten Cop Program was not part of the DNA program,
but they. used it because the, officers had already established a rapport with "the
kids schools and teachers."
® On April 29, 2009, at 1611 hours, Mr. Cohen responded to Officer: Morgan's
email and also forwarded it to all its original recipients. In this email Mr. Cohen
posed several questions to Officer Morgan. He confirmed no relationship existed
between the Kindergarten Program and the DNA program and that the
Kindergarten Program had been used since they were already in the schools. Mr.
Cohen also confirmed that the program was going forward because the release
and the information of the program had already been sent to the parents. Mr.
Cohen - advised Officer Morgan that in April was the first time he had heard of the -
DNA program being expanded to the first and second graders. Mr: Cohen
admitted he had heard of the money being raised for the project but had not
heard that the program was already in motion: Mr, Cohen then posed a series of
questions to Officer Morgan:
o "At what Executive Meeting was the DNA program for the 1 St and 2 nd
grade mentioned ?"
o "Who approved the DNA program for the 1St and 2`' grade ?"
o "What is the budget for the 1, and 2 nd grade?
o "What is the cost for the DNA program per student ?"
o "Why was the DNA program for the 1 St and 2 " grade rushed out to the
public without Executive Board approval and who ordered this?
® On April 29, 2009, at 1625 hours, Ms. Cruz responded to .the email. thread and
forwarded her response to all the original recipients: Ms. Cruz stated she could
not find any mention of DNA for first. and second, graders anywhere in the
Executive Board minutes.
On April 30, 2009, at 0917 hours, Officer Morgan replied to Mr. Cohen'.s_ email
and again forwarded it all the original recipients. Officer Morgan reconfirmed that
no relationship existed been the Kindergarten Cop - program and the DNA
program,. The DNA program had been. "piggybacked" and that the information
about the program had been released. Additionally, "make ups" had been
completed for the - kindergarten classes. Officer Morgan stated in his email that
he as the Executive Director, made the decision .to offer the program based on
- . several factors; the program was already -in existence, the. availability of funds,
the donor specifically requested the funds be used for first and second graders
Complainant: Office of the Chief Page 7 of 27 12009 -030
Subjects RAL Executive Board
DNA program, the school year was almost over and time was" short, and that
funds would still be left over for the continuation of the program the following
year. Officer Morgan further advised that the budget for the program was based
on 975 students at $20.00 each totaling $19,500. Officer,Morgan in his response
stated that nothing had been rushed and requested an explanation from Mr.
Cohen as to what his concerns were with the "program, because it seemed to him
that he was the only individual questioning the program,
'Ont April 30, 2009; at 1034 hours, M.r. Gregg Francis responded to the email .
thread and forwarded his to all original recipients. Mr. Francis in
his response stated that he wanted to speak to the entire Executive :Board about
'the recent issues among the board.. Mr. Francis suggested they speak about the
problem so }that they can move forward. Mr. Francis believed the issues and
separation among the board commenced on April 1 St after discussing' Mr. Winer's
salary. Mr. Francis expressed` his concern about the constant question of
people's principles and - motivations. Mr. Francis suggested that the members
should either move on or quit their positions. Mr. Francis reminded the recipients.,
of the email.to focus on the positive that - had been accomplished.
On April 30, 2009 at 1211 hours, Ms. Veski responded to the email thread and
- forwarded her response to all the original recipi -ents. Ms.. Veski advised in her
email that she believed the board had been divided much before Mr: Winer's
salary had been discussed, but that in her opinion the discussion of his salary
made it more personal. Ms. Veski: voiced concerns over the lack of analysis on,
the PAL's expenditures especially.with the drastic reduction in school funds. Ms.
Veski was.also concerned with promises made by prospective donors who had
not followed through with either donations or fundraisers. Ms. Veski. stated in
her email that the Vice President was correct in questioning the DNA program
since it had. such a large price tag attached to it; and that the prospect o not
spending the money or using it for something else should be - evaluated. Ms:
Veski suggested approaching the donors and asking them to reconsider using
the funds for something else, which she believes they most likely would have.
accepted.. Ms. Veski also voiced her concern with depleting the funds and
possibly having to close the PAL, at which time the DNA,program would not be
µ , as important and that other current programs had a - much deeper7meaning to the
League and to the children. Ms. Veski cited examples such as the - Police
Explorer Program, YDC; Kindergarten Cops,, and Pin Pals. Ms:, Veski stated in
her email that she had a, conversation with Officer Morgan. where "she expressed
her Jdeas to him of what the PAL programs should be. In her opinion, the
programs should prevent child delinquency, illiteracy, crime. and abuse. Ms.
Veski believed that the children would be better served by programs to teach
children to identify dangers - such as abduction - and molestations, and on hove to
not become victims_ of crime. Funding a program that helps the children be
identified after they became victims is not.part of the PAL's core principals. Ms.
Veski also urged that the, programs the PAL became involved in be selected in a
logical..'manner. M"s. Veski in her email called upon the board to quit fighting and
focus their attention on the: children. Ms. Veski believed' that, this could be
accomplished when rules are followed. pertaining the approval of programs with
big price tags.
On April 3'0, 2009, at 1932 hours, Ms. Cruz responded to the email.thread and
forwarded the response to all the originakrecipients. Ms. Cruz addressed Ms.
- '
Complainant: Office of the chief Page 8 Of 27 ' 2009 3 0
Subject:. PAL-Executive Board
' 1
Veski specifically and advised her that, she was on target, Ms. Cruz. went on to
quote from the PAL by- laws: -
"Article 11 'DIRECTORS, Section 4. POWERS The general.
management and supervision of the. program, affairs, funds and property
of the corporation, disbursement of its money and disposition of its
property in fulfillment of its corporate purpose ,shall be vested in the
Executive Board.. The board is hereby empowered to direct the Executive
Director to carry out its corporate purposes."
Ms. Cruz advised that it also limits the amount of. money that can be spent
without the approval of the Executive Board and quoted:
"Article III OFFICERS, Section 9. EXECUTIVE_ DIRECTOR: He /she
shall be responsible for coordinating_all PAL programs and shall have a
limit of $2,500.00 expenditure without approval of the Executive Board of
Directors of the Corporation."
Ms. Cruz in her email, accused the Board Members of simply rubber stamping
decisions made arbitrarily. Ms. Cruz reminded the board that they had, a
fiduciary duty to ascertain that monies are spent judiciously and that they could
be held personally liable for either decisions made or failures of the board. Ms.
Cruz suggested that all decisions be :placed on hold until the next meeting
scheduled a week from the date of the email.
On April30; 2009, at 2026 hours, Officer Morgan responded to the email thread
and forwarded his response to all the original recipients: In his email Officer
Morgan asked that no more discussions on this topic be conducted over email
and that this was a topic for the Executive. Board to discuss., Officer Morgan
acknowledged that many different opinions existed over this topic but that they
were just that, opinions.
On May 19; 2009, at 1537 hours, Mr. Winer received i an email sent from
- florid aho(a gamil.com The email was signed by Mark & Kristina Pickard and was
solely addressed to Mr.. Winer, The email stated that they were excited about all
the positive press the DNA program had received. Mr..& Mrs. Pickard stated in
the email that after meeting with Officer Morgan and Mr. Winer a month prior,
they donated $1.8,000. According to the email, the donation was to cover the
DNA ,program for grades kindergarten, first and second. Mr. & - Mrs. Pickard
pledged in the email that as soon as their children return to school 'in the fall they
would cover the expense of the - DNA program for the school year 2009 — 2010
for grades 3, 4, 5 and 6. Mr.. & Mrs. Pickard requested in their email to Mr. Winer
that any money left over from the .origi.nal $18,000 should 'be spent to cover'fhe
other grades. If a deficit occurred, they pledged they would cover the difference
in addition to the prior pledge.
® On May 20, 2009, at 2206 hours, Mr. Winer sent an email to Mr. Francis and
Officer Morgan stating that he was aware of the accusations of "serious
improprieties" made against him at the May 6,'2009 Executive Board meeting
involving the DNA program. -In his email, Mr. Winer demanded a w ritten
explanation of the "alleged" improprieties so that he could respond to them at the
next meeting scheduled for June 9th
Complainant: Office of the Chief Page 9 of 27 12009 -030
- Subject: - -PAL Executive Board _ _
I
On May 21, 2009,. at 1539 hours, Mr. Winer responded to Mr. & Mrs. Pickard's
email. Mr. Winer thanked them for their support and advised them he would
forward their email to Chief Noriega and the Executive Board. Mr. `Winer
expressed that he was hopeful to have answers for them on June 4 t1i , a day after
the Executive Board meeting. Following that, it-Would be proposed to the entire
board on June 9 th ,
On May 21, 2009, at 1546 hours, Mr. Winer, forwarded the email thread to Chief
Noriega and Officer Morgan... Mr. Winer advised ,Chief Noriega in his email that
approximately $10,000 was left of all the money raised for the DNA program for
grades K, T, and 2. Mr. Winer advised that he would .forward the email to the
Executive Board for "their discussion and decision...
On May 21, 2009; at 2049 hours, Mr. Winer forwarded the email thread to Mr.
Francis and Officer Morgan. Mr. Winer in the email advised Mr. Francis that he
had forwarded the email to Chief Noriega and Officer Morgan, and, pointed out
that it was clear Mr. and Mrs. Pickard wanted their donations to used specifically
- for the DNA program and "not" for any other programs. Mr. Winer placed an
emphasis on the word "not" by changing the font color to red. Mr. Winer also
pointed out in his email that Mr. and Mrs. Pickard were willing to expand the
program to grades 4. and 6. Mr..Winer in his email requested that the topic be
placed on the Executive Board's agenda to be discussed.
On May 21 2009, at 2227 hours, Officer Morgan responded only to Mr. Winer.
In this email Officer Morgan requested that Mr. Winer thank Mr Pickard for his
present and past donations, and posed a question that he did not believe it had
ever been brought up that monies restricted for something be spent elsewhere or
on other programs. Officer Morgan assured Mr. Winer that they would bring this
issue up before the board but at an alternate meeting.
On May 21, 2009, at 2324 hours, Officer Morgan responded to Mr. Winer's email
where he demanded the specific allegations in writing. Officer. Morgan
responded only to Mr. Winer by stating "put it on the agenda."
On May 22, 2009, at 2203 hours, Officer Morgan sent an email to Mr. Winer,
advising him that he had just received a letter which advised him, that the PAS'
was being audited between the periods of October 2006 to,the present. Officer
Morgan indicated in the email that the auditor had chosen November 2006,
March 2007, October 2007, August 2008 and April 2009 as test months. Officer
Morgan also indicated to Mr. Winer that the auditor was looking for policies,
procedures, general ledgers, financial statements, deposit slips, bank
statements, vendor invoices, payroll time ,sheets; etc.. Officer Morgan expressed
his concern since this would take a lot of work in order to compile alI the listed
information and wanted to make sure the information was in order.. Officer
Morgan advised Mr. Winer that the audit was to commence after .Memorial Day.
He also stated that he told .them Mr. Winer was out of town during that,time.
On May 23, 2009, at 1049 hours, Mr. Winer responded to Officer Morgan's-email
about the audit wondering what had brought the audit on and also advised
Officer Morgan to make "Mike" aware of -the audit since they had worked on "it"
before.
On May 23, 2009, at .1910 hours,
Officer Morgan responded to-Mr. Winer's email
.saying that they can give "guty" their internal audit and that they would work out a
"game plan" later.
Complainant: 'Office of the Chief Page 10 of 27 12009 -030
Sdbject: PAL'Executive Board ""
® On June 2; 2009 at 134'9 hours, Officer Morgan sent an email to Mr. Winer -
attempti.ng to coordinate with him and "Joe" in order to receive an award from the
Miami Dade School Board "big thing"... Officer Morgan was relating the
information he had received from Mr. Marty Karp : through his aide Jerold
Blumstein. The award ceremony was scheduled for June 17 t1i at 1300 hours.
On June 2, 2009 at 1546 hours,, Mr. Blumstein (Administrative Assistant to
School Board Member Dr. Martin Karp . of the Miami Dade County Public
Schools) sent an email to Ms. Freedline, ,Mr. Winer;. Officer Morgan, Greg (DNA
Life Print), 'Detective Juan. Sanchez, Chief 'Noriega and Ms. Denise lzquierdo.
The subject of the email was titled "Dr. Karp. Mr, Blumstein advised the
recipients that Dr. Karp wanted to recognize the PAL for the. DNA Life Print.
Program at the June 17 School Board Meeting. 'Mr. Blumstein believed this
award would be a great way to recognize the great work of the PAL and the
Miami Beach Police for this project.
On June 2' 2009, at 1358 hours, Officer Morgan forwarded the above,email to
Mr. Winer with no comments.
On -June 3, 2009, at 2130 hours, Mr. Winer sent an email to Officer Morgan
advising him that he had received a call from someone who advised that a
couple of Executive. Board members were at Chicken Kitchen on 41 Street and
were overheard_ by a member of the media . "badmouthing" him and Judge
Howard Gross with regards to the PAL. Mr. Winer stated in his email that
although he did not know what was said he planned to speak to the media about
it as soon as he returned from vacation,
On June 4, 2009, at 0723 hours, Officer Morgan responded to Mr. Winer's above
email; with "ok." -
On June 10, 2009, at 1015 hours, Division Chief Riley sent an email to Officer
Morgan; the subject was titled ``New Bi Law. In his email, Division Chief Riley
wrote that in light of the new by -law, he requested Officer Morgan collect "ALL" of
the PAL credit cards and that until, the signers on the checking account were .
changed, he, was to keep the: check books secure. In addition, when checks
required two signatures Officer Morgan should sign last.
On' June 10, 2009,. at 1402 hours, Officer Morgan forwarded the above, email to
Mr. Winer with no comments.
On June 10, 2009, at 1607'hours, Off cer Morgan sent an` email to Ms. Cruz. The
email was forwarded to Mr.`.Winer and the subject was titled "By- laws." In this
email, Officer Morgan advised Ms. Cruz that as per Article IV, section #1 page 5
of the by -haws, the: executive board consists of Past President and Past,
Executive Directors including Winer.. Officer Morgan requested that she
forward all emails sent . to the board and Mr. Winer also.
.On June 22, 2009, at 1.210 hours, Officer Morgan sent an email to Mr. Winer. In
the email Officer Morgan advised Mr. Winer of the following:
o The Executive Board designated a "committee to review matters :in relation
to Mr. Winer.
o The Committee on that day decided to suspend Mr. Winer with pay until
such time they could agree what further actions to take.
o Mr. Winer could not act on behalf of the PAL in any fashion and was to
refer any and all communications to Officer Morgan.
o Mr. Winer was advised to not destroy any records or property belonging to
Complainant: Office of the chief Page 11 of 27 12009 -030
Subject:... PAL•Executive Board-
quested.
the PAL and to turn them over to Officer Morgan as re
o Officer Morgan believed that the actions taken by the Board were
responsible and he look forward to Mr. Winer's full cooperation.
January 14, 2010
I mailed certified letters via United States Postal Service to Mr.- Gregg Francis, Mr:
Steve Cohen, Ms. Lori Freedline,, Mr. Matthew Krieger, Esq., Mr. Bernie Winer, Mr.
Robert Jenkins, Ms. Lynda Veski (never responded), Ms. Maria Calzon Cruz (never.
responded), Mr. .Kenneth Stowe. (never responded) and Mr. Lyle Stern (returned
"unclaimed ") requesting they contact me in order to schedule a mutually agreed time for
an interview.
February 2, 2010
At 0712 hours, I conducted a sworn recorded statement of Ms. Lori Ellen
Freedline at the Internal Affairs Office ,located at 6840: Indian Creek Drive. A
synopsis of Ms. Freedline's statement is as follows:
Ms. Freedline advised that she resigned as Vice President of the PAL Board back in
November or December of 2009. She remained as a member of the general board. Ms,.
Freedline stated that during her tenure, she never became aware of any criminal acts
committed by any of the member of the Executive Board:
For further details refer to the audio recording. or the transcript.
- February 3, 2010
At 1413 hours, I conducted a sworn recorded statement of Mr. Matthew Evan
Krieger, Esq. at the Internal Affairs Office Located at 6840 Indian Creek. Drive. A
synopsis.of Mr. Krieger's statement is - as follows:
Mr. Krieger - advised that he was a current member of the PAL's Executive Board. Mr.
Krieger advised that he never reported any criminal. acts to any investigative agencies
because he had no.knowledge of any acts involving the Executive Board.
For further details refer to the audio recording or the transcript.
r.
February 4, 2010
iD►t 1132 hours, l conducted a sworn recorded statement of Reserve Officer Robert
Louis Jenkins at the. Internal Affairs Office located at 6840 Indian Creek Drive. A
synopsis of .Officer Jenkins' statement is as follows:
Mr. Jenkins'is the present President of the PAL. Mr. Jenkins advised that he was not
aware of any criminal acts committed by the PAL nor its Executive Board and therefore
never contacted any investigatory agencies.
Complainant: Office of the Chief Page 12 of 27 12009 -030
Subject: PAL-..Executjve.Board ... __..
For further details'refer to the audio recording Or the transcript.
February -5y 2010
At 0714 hours, I conducted a sworn recorded statements of Mr. Bernard Morris
Winer at the Internal Affairs Office located at 6840 Indian Creek Drive. A synopsis
of Mr. Winer's statement is as follows:
Mr. Winer is presently anon- active member of the Executive Board. As a former
Executive Board Director he is automatically a board member but is inactive due to his
termination agreement until January 2011. 'Mr.. Winer stated he was not aware of any
criminal acts committed by the Executive Board nor its members and that he never
contacted any investigatory agencies:
For further details" refer to the audio recording or the transcript.
At 1019 hours, I conducted a sworn recorded statement of Mr. Steven M. Cohen at
the Internal Affairs Office located at 6840 Indian Creek Drive. Mr. Cohen was
accompanied by Counsel, Mr. Ab.e Laeser. A synopsis of Mr. Cohen's statement is
as follows:
Mr. Cohen advised 'he did not contact any agencies to share his concerns, other than
Mr. Centerino of the Miami. -Dade State Attorney's Office (SAO) Public Corruption Unit.
Mr. Cohen alleged that Officer Morgan did not have the authority to go forward with the "
i .
DNA LifePrints Program. Mr. Cohen advised- Officer Morgan had not received the
approval of the Executive Board. According 'to Mr. Cohen, Officer Morgan used the
excuse that since the program was already inexistence he (Officer Morgan) simply
continued to fund it. Mr. Cohen referred to an email dated April 29, 2009 at 0031: hours,
mentioned earlier in this report. During the interview, Mr. Cohen read Officer Morgan's
response directly from -the email. Mr. Cohen advised that Officer Morgan had admitted
he had not followed proper procedure. Mr. Cohen also `stated that he reviewed the
ledger associated to the DNA program and found the hand written entries, referring to
this practice as "an accounting nightmare." Mr. Cohen advised, that the handwriting on.
the Ledger belonged to Mr. Winer. Mr. Cohen claimed he requested the general ledger
on several occasions in order to inspect the disbursements of monies, but was not
provided that information. Mr. ,Cohen stated that the person who inputs the information
-into the ledgers was, "Carlos," a part time employee of the PAL who was employed full
time with the Miami Beach Parks and. Recreation Department. , Mr. Cohen did not know
a last name for Carlos. Mr. Cohen believed that the Treasurer would be the person
responsible. for the maintenance of the ledgers during that period. The Treasurer was
Division Chief Riley. Mr. Cohen's opinion is that the fundraising. and collection of,
donated money earmarked for a DNA program should not have been done, because the
program had not been.approved by the board. Mr. Cohen advised he was not sure if all
the programs funded by the PAL in the past had been approved by the board.. Mr.
Cohen cited the by -laws of the PAL, which dictate that the Executive Director only has
the authority to makes purchases of $2,500.00'-or less without the approval of the
Board. Mr. Cohen stated that his /second concern dealt with a White Water Rafting trip,
Complainant: Office of the Chief Page 13 of 27 12009 -030
Subject PAL Executive Board
I
where Mr. Winer took his grandson.. Mr:` Cohen questioned if Mr. Winer had ..received
approval prior to the trip from the donor, to incur these expenses: Mr. Cohen found the
documentation from the donor agreeing to pay for Mr. Winer's grandson suspicious Mr.
Cohen explained there was a. within the PAL. regarding fundraising. Mr. Cohen
explained the trend as monies collected were being placed in restricted funds for
programs which had not been appro ved. by the Board. These monies were then
claimed to. be earmarked by a particular donor for a specific purpose. Mr. Cohen stated
the overage from the tripe (expenses in._ excess of the d.onated' money) was
approximately $4,000.00 =and was paid bythe PAL without the Board's approval.
Mr. Cohen .explained his next area of concern was related to Thanksgiving baskets
given by the PAL, which' was a program in existence for 'at least: the past 30 years
where needy families receive baskets containing turkeys and other .groceries. The last
a
ye ars., event in 2009 *was suspiciously more expensive than previous ye Mr. Cohen also
questioned who the recipients were for additional turkeys purchased by the PAL. The .
additional turkeys were significantly larger than the donated ones. He also questioned
the expenditure of $265.00 paid to Mr. Pete Matthews for deep frying turkeys.
At 1125 hours, the recorded portion of this interview, concluded .because the. digital
recorder ran out of storage room. Prior to the end of the interview, ],advised Mr. Cohen,
with his attorney present, that this investigation of the PAL was confidential until the
investigation seized to be active. I also advised Mr. Cohen to contact me directly if he
had any additional information or evidence' relating to this investigation. Mr. Cohen
assured me he understood both. I asked Mr. Cohen if he had any additional information
in reference to this investigation and he advised me he did not.
After our interview, Mr: Cohen not only divulged information about this confidential
investigation to other individuals of this government, but *also to media outlets. Mr.
Cohen apparently had. additional' concerns and failed to share those. concerns with this
investigator.
For further details refer to the audio recording or the transcript.
. February 8, 2010
i received an email from Mr..Cohen. A synopsis of the email is as follows:
Mr: Cohen in his email thanked me for meeting with him, but was disappointed I had
only asked him two questions. Mr. Cohen stated that the question I had posed to him
about speaking to the IRS or other law enforcement agencies left him confused
regarding the purpose of my investigation.. Mr. Cohen believed that the question
asked. him regarding his knowledge. of wrong doing in the PAL was broad and non -
specific. Mr. Cohen made suggestions, via his email on how to conduct this
investigation and suggested I interview Chief Noriega and Chief Martinez. He alleged
they were aware and condoned the wrong doings in the PAL. He made several other
suggestions as to who needed to be interviewed. He questioned when the - IA
investigation was opened and requested - a copy of the - recorded interview he provided. -
Mr.; Cohen attached the draft of the minutes. for the Special Committee marked
"confidential" and an unsigned draft copy of the audit.
Complainant*. Office of the Chief Page 14 of 27 12009 -030
_.....Subject: „PAL - Executive- Board... .. L . . ..
f
,
February 9, 2010
At 1509 hours, t conducted a sworn recorded statement of Mr. Gregg. Francis at.
the Internal ,Affairs Office located at 6840 Indian Creek Drive. A synopsis of Mr.
Francis' statement is as follows:
Mr. Francis advised he served as the President of the Executive Board until being
replaced by Mr. Jenkins. Mr. Francis along with Ms. Veski and ivision Chief Riley,
reviewed credit card receipts from the PAL. Mr. Francis advised they had uncovered
charges totaling approximately $1 ,.0.00,00 in "fine cuts of meats" and 'grills" never used
by the PAL in any of their fundraising events or picnics. Mr. Francis stated that he first _
became aware of these findings during the Special Committee meeting dated July 15 ,
2009.. During that meeting, he ,was able to review those findings. Mr. Francis stated
that although he cannot prove the items purchased were used for anyone's personal
gains he found them suspicious. Mr. Francis also found suspicious a donation made by
Mr. Pickard for $27,000.00, apparently earmarked or restricted for a rafting trip, which
never appeared - in the meeting minutes and was not approved by the Board. Mr.
Francis was also not sure why Mr. Winer's grandson was allowed to attend the trip.. Mr.
Francis explained that any money donated to the PAL where the donor restricts the
money -to a specific program, has to be in accordance with the mission of the
organization. Mr. Francis explained that it is up to the Board whether or not to accept
donations with restriction: Mr. Francis' interpretation of the by -laws was that the
Executive Director did not have the authority to accept money with restrictions unless
previously approved by the board, Mr. Francis' concerns with the DNA Program
j included approxirnately $27,000.00 dollars of PAL funds used to fund this project
without the Board's approval and with no comparative quotes. Mr. Francis advised the
kits- were being purchased from a close ' friend of Mr. Winer, which added to an
appearance of impropriety, Mr. Francis agreed these were violations. of the by -laws and
not necessarily illegal. Mr. Francis mentioned he had received harassing phone calls at
his job. Mr. Francis advised the caller, in one of the instances, told his boss "Gregg
better shut the F... up." In another instance the caller "said, "keep his mouth shut." The
caller did not name or elaborate on who he meant. Mr. Francis was concerned for his
safety and assumed the calls were. related to his involvement with the PAL, which Led to
his resignation from the Board. He suspected a member of the PAL was involved and
believed a "retired police officer_" was behind the phone calls, Mr. Francis was referring
to Mr. Winer
Mr. Francis stated that the. Executive Director had the discretion to. spend up to
$5,000.00 on a single incident and the ability to make "tacit approvals." Yet, Mr. Francis
believed that "tacit approval" is "nonsense and i,s a fancy way of saying "this wasn't
' voted upon." I posed the ,question to Mr. Francis, "If the Board of 'Directors found the
1 Executive Director misappropriating funds and concluded they wanted him /her removed
from his position would . the Board have the power to remove him ?" Mr. Francis.
answered that in his personal opinion the Board probably could remove the person, but
morally they would not want to. Mr. Francis felt 'that removing someone would make
some people upset and that they did not want to cause problems. Mr. Francis reviewed
a copy.of the general ledger which was handwritten and in his professional opinion, as
an accountant, it seemed as if someone was "scrambling" and writing y stuff down at the
Complainant: Office of the Chief Page 15 of 27 12009 -030
Subject:._
I'ast minute. Mr. Francis admitted he signed checks that were not complete or missing,
the supporting documentation when'asked to do so by the Executive Director. Mr.
Francis advised -that he also found Costco memberships under wives names and he
found that to be improper.. Mr. Francis was hesitant in fully assisting me with this
investigation, citing that he may he putting himself in "harm's way." Mr. Francis would
not elaborate even after I explained to him the different Statutes that protect witnesses.
The interview with Mr. Francis concluded at 155.5 hours. For further details, refer to the
audio recording or the transcript. -
March 19, 2010
The Miami Beach Internal Audit regarding operations of the PAL was finalized and
approved by Mr. Jorge Gonzalez, the City of Miami Beach City ,Manager. The audit
found several shortcomings with the operation of the PAL. The shortcomings found by
the auditor were quoted as follows;
1. PAL made tax- exempt purchases on behalf of two :independent taxable
organizations, Neostar Sports.& Entertainment and the Miami Beach Fraternal
Order of Police, William Nichols Lodge No. 8 (MBFOP)'during the audit period.
2. PAL's lease agreement contained contradictory language . regarding
responsibility for paying the building's utilities. A Memorandum of
Understanding (MOU) was signed on 11/05/2007 to provide future clarification
and its terms , followed, but it was not approved by the City Commission.
Additionally, the City has continued to pay for -the building's water and sewer
charges, which should be paid by the PAL.
3. The PAL building (located at 999 11 Street) has several maintenance issues
that should be repaired. In addition, $31,143.00 of janitorial services for twelve.
months were paid by Police internal service charges rather than ,allocated to
the building occupants.
4. Internal controls were not sufficiently implemented and followed concerning
gym membership payments to help prevent the misappropriation of monies by
a recently terminated gym manager.
5. An unannounced cash count on 6/17/2009 found that a new gym employee did
not follow stated .verbal procedures in the receipt and reimbursement of
deposits for temporary access cards. Also, cash was not properly
safeguarded or timely deposited,at City National Bank to help reduce PAL's
risk exposure.
6. Deficiencies in the non- profit's accounting records are identified that hinder the
audit trail.
7. Deviations from PAL's by -laws and, sound business practices for the.
Thanksgiving Day Food Drive and DNA Life Print Kit Programs are listed.
Complainant: Office of the Chief Page 16 of 27 12008 -030
r_ :._ Subject: PAL-Executive Board
8. PAL did not - fully comply with all the terms listed in Florida Statue 561.422
regarding the attainment of temporary - alcohol permits for not- for - profit
r organizations.
9. PAL made purchases - on behalf of the City for the Parks & Recreation
Department's Biggest Loser Contest, the Police Department's. Citizen's Police
Academy and for the Citywide Take .Your Child to Wok Day that were either
partially or fully reimbursed. PAL has a close working relationship with these
departments that should be re- evaluated.
10. American Express corporate credit cards were also used personally by PAL's
Outside Consultant (Mr. Winer) thereby creating additional work for their
bookkeeper, increasing the possibility of mistakes, etc.
11. .PAL funds were used to pay registration fees for. an employee's spouse;
flowers and food for funerals; wedding gifts; etc. that do not appear'to adhere
with the organization's mission statement.
12. Two Miami Beach Police Department employees missed . work to attend out -of-
town PAL sponsored events but were charged administrative leave time and
were paid in full by.the City.
13. One City employee who worked part -time, at PAL did not prepare and submit
the required "Outside Employment Statement" for the 2006 and 2007 calendar
years. .
i Some of the shortcomings documented in the audit were consistent with the allegations
brought forth, by Mr. Cohen. The first listed shortcoming was that the PAL was found to
be making purchases using their tax exempt classification for organizations that do not
share the same privileges. It seemed these exchanges were done for donations and in
other situations for full reimbursements, saving the other entity both sales tax and resort
tax. The auditor found an occasion where the PAL allowed a company called Neostar
Sports & Entertainment uses their certificate of exemption to organize an event at Nikki
Beach. Club during Super Bowl weekend of 2/1/07 to 2/4/07. The event cost $400,000
and the $36,000 in taxes (7% safes tax & 2% resort tax) was circumvented. The PAL in
return was supposed to receive a minimum of $25,000 donation from the proceeds.
The company actually filed for bankruptcy and only remitted $195,000 Penrod's and,
$12,500 to the PAL. On other occasions occurring in 2007, 2008 and 2009, a similar
arrangement was made with the MBFOP (which is a non but not a 501.c3 and
does pay taxes) where luncheons for retired police officers were hosted -by the MBFOP.
In the 3/26/2009 luncheon the PAL paid $1,600 and was. subsequently reimbursed by
the MBFOP $1,000, The PAL donated $600 and the MBFOP circumvented the $144 in
taxes.
The City and the PAL in their separate response to the auditor agreed that policies &
procedures need to be adopted and adhered to so as to insure these, practices do not
. ,
1.
continue.
The second listed shortcoming was that the auditor found some contradictory language
Complainant: Office of the Chief Page 17 of `27 12009 -030
Executive Board ....... ._.. .
in the .pease agreement between the City and the PAL. Confusion existed on which
entity was responsible for paying 'For the' utilities. Also, the City was responsible for
contributing off -duty surcharges to the PAL and had not done so, A. MOU drafted
between - the City Manger and the PAL on 11/5/2007 clarified the problems. The. City
paid the PAL a sum of $214,128 dollars. The back dated surcharges were paid in
quarterly installments and a onetime sum of $50,000 dollars in July 2007 to assist with
previous . utilities bills, The auditor found - that the PAL owed the City .$18,924 dollars
for water and sewer charges paid incorrectly by the City.
: The City in their response admits the water and sewer bill was incorrectly paid for, but
will negotiate a resolution due to multiple entities being serviced from the separate
meters. The PAL pointed out that there were City entities not associated with the PAL
on the same meters and they will draft another MOU to address this.issue.
The third listed shortcoming was that the maintenance of the building was found to be
deficient. The auditor cited water damage, Leaks, broken treads in stairwells as well as
others. Additionally, the Property Management Division was not bulling the PAL for.
janitorial services accumulating a debt of $31
The PAL and the City in their separate responses to the auditor agreed to re- negotiate
the conditions of the janitorial services. There was no mention of the necessary building
repairs- except for the City's assertion that the PAL was responsible for some of the
repairs.
In the fourth listed shortcoming, the gym memberships and the handling of the fees and
reimbursements were found to be deficient. In April of 2009, a full time gym manger
was terminated - when it was,.discovered he was stealing membership ' fees, The
employee was issuing receipts from the back of a .generic "Office Depot" receipt book
and then destroying the last receipt copies, thus destroying evidence of the existence of
those monies. The administration's lack of securing the receipt books, tracking of -
receipt numbers, documenting the receipt numbers in use and lack of reconciliation. of
the receipts with -the voided receipts, contributed to .the misappropriation. An on -site
i inspection of `the. receipt books conducted by the auditor demonstrated missing receipts,,
no accountability of the receipt books and' the lack of reconciliation. The terminated
gym manager.was estimated to have stolen $500.00 dollars in PAL monies.
The PAL's response to the auditor's finding was to obtain receipt books with the PAL's
logo, keep voided receipts in Order to reconcile the account, maintain a work sheet by
the staff handling the membership fees and implement other safeguards as part of their
updated polices.& procedures.
The fifth listed shortcoming iwas found by the auditor when he conducted an
unannounced cash count. The auditor found. that the members of gym, depending on
their circumstances and how often they decide to pay, paid different amounts. The cash
count was short $40 dollars, and it appeared that the new employee lacked sufficient
guidance and incorrectly reimbursed two customers $20 dollars each. The auditor also"
found $3,270 dollars had not been deposited but instead stored in a less secure drawer
with a padlock instead of another, more secure option. The auditor- recommended more
frequent deposits to be made in order. to reduce the cash on hand.
. a
Complainant: Office of the Chief Page 18 of 27 12009 -030
Subject : -, PAL-Executive- Board :..........:.. _, .
The PAL's response to the auditor's finding was that they would adopt new policies &
procedures based on the auditor's findings.
The sixth listed shortcoming stemmed from the annual audits performed by an
independent accounting firm where . the PAL received unqualified opinions indicating
their lack of compliance with the Financial Accounting Standards Board (FASB)
accounting pronouncements for not- for - profit companies, reporting on a cash basis.
The PAL was basically ignoring the matching principal, The auditor did' not- test the
accounting. methods and instead checked its accounting records. The auditor found
supporting documentation for canceled checks' missing and checks payable to
restaurants not properl ' with that purpose. The auditor noted an example of
check #8190 dated 10/21/2008 to Monty''s Stone . Crab & Seafood :Hou'se for $2,179
dollars. The auditor also found occasions where checks were given to staff as an
advance prior to a trip with no supporting documentation of the exact monies used by
the staff: The auditor also noted that although the checks were. safeguarded properly,
he found two blank checks signed by both Mr. Winer and Officer Morgan in the drawer.
The by -laws do require than all checks have two signatures and approval of the
Executive Board of Directors for any amount in excess of .$2,500 dollars. The auditor
also found cancelled .checks which were cashed by the bank containing only one
authorized signature, although it appeared they were for legitimate expenditures. This
practice did circumvent the requirements set forth by the by- laws. The auditor also
noted that the PAL should, by contract, receive a monthly check from the MBFOP for
$535 dollars for rent but instead was receiving $523 dollars. The PAL was unable to
furnish a contract to the auditor for the rented space the Miami Beach Policeman's
Relief and Pension Fund occupies. The Fund was paying $300 dollars a month for their
! space to the PAL. The auditor found that 2008 voided checks were destroyed and not
entered in their accounting - software.
The PAL responded to the auditor's finding agreeing to make some procedural changes
and to seek guidance from their accounting firm-on which account practices.to follow.
some larger
The seventh shortcoming found by the auditor dealt with a review of
programs run by the PAL. The auditor looked at two specific programs, the
Thanksgiving Day Food Drive and the DNA Life Prints Kits. The Thanksgiving Food
Drive traditionally had received donations from a multitude of businesses . and
individuals. This program had cost the PAL approximately $15,000 dollars annually.
The. turkeys purchased for the giveaway weighed approximately 8 pounds each, In
2008, the PAL purchased an additional twenty -four (24) turkeys weighing 16/18 pounds,
four (4) weighing 22/24 pounds and six .(6) 8 /10 pound turkey breasts. The
administrative staff claimed that 15 of those turkeys-
were distributed to Parks' &
' Recreation staff, nin=e (9) were distributed to Municipal Service Workers who worked in
the building, three were distributed to PAL's administrative staff, four (4) were
distributed to PAL's gym employees, five (5) were distributed to Miami Beach Police
Evidence' Staff and the remaining turkeys were distributed to others who helped
. throughout the. year. The. auditor did not find any supporting documentati=on to confirm
the aforementioned turkey distribution,
Th e. D NA Life Print Kits consisted of a package which included 10 digit certified
Complainant: Office of the Chief Page 19 of 27. 12009 -030
.......... Subject: .- _...,:PAL: Executive Boerd'.
biometric fingerprints cards, a DNA identification kit, a high quality digital photograph,
and a Comprehensive Ch identification lcit. The package was stored by the parent ;
and if the child should become missing, they would use the information acquired to
assist in the identifying and /or Locating . ,of their child: The auditor showed that
$23,4.16:09 was raised in donated..monies for.the purchase and the distribution of the
kits, to kindergarten; first and second graders during March /April of the 2009 school
year, The auditor found that different purchases made for the DNA kits were over the
. $2,500' dollar threshold set forth by the =by`-1aws for, purchases made without the
Executive Board's approval. The only mention , of the program, according to the
minutes, was the board of directors discussing the .purchase
and $7,500 dollars in.
restricted monies being received. In the auditor's opinion, the DNA Life Print did not fit
the PAL's mission :statement. The auditor also found a discrepancy with the purchase
price ($14:95 dollars)�listed in the company's web page and the price paid for by PAL
($20.00 dollar)-for each kit. The auditor noted.in his report that thePAL explained the
difference in' price due to the additional benefits they receive such as a bio- metric
- fingerprint analysis, a journal and other non - specified benefits.
The. PAL's response to the auditor was that future purchases that, exceed_ ed $2
dollars would be done so with the approval of the board. They would also seek. ,
competitive bids for future programs The -PAL in their response also.. asserted . that the
Board had approved the DNA Life Print program for the 2010 school year:
'The eighth shortcoming .identified by the auditor was: their past vi °olations of FSS
561;422. This statute states:
_ ...the director of the division may issue a permit authorizing a' bona fide nonprofit civic
organization to sell alcoholic. beverages for consumption on the premises only for
period not to exceed 3 days, subject to any state law or municipal or county ordinance
I regulating the .time for selling such beverages. ALL 'net- profits from sales of alcoholic .
i.
beverages collected during the permit period must be. retained by. the nonprofit civic
organization..."
Yp
During the audit period, the PAL obtained permits ermits for Volle alozza 2007, Miami
Beach World Cup. Polo 2007 and .Miami Beach World Cup Polo 2009.. In return for a
negotiated fee, the PAL allowed independent 'Vendors such as Boucher Brothers
' (current members of the Board of Directors) and the Playwright Pub to operate the
alcohol concessions an the beach, _ Thi.s violated FS& by the sales not being conducted
on the premises of1he PAL (999 -1.1 Street) and by. not receiving all net profits from the
sales, instead receiving a fixed negotiated ,amount.
In the PAL's response to the auditor's findings, they agreed not to deviate from FSS in
the future and adopt policy that addresses the authorized use of - the agency's tax
exempt: status.
` - The riinth shortcoming found by the auditor was an, apparent comingling of monies with
different City entities. During the audit period, the PAL purchased. items on behalf of
. other City entities. The PAL was either fully, reimbursed or partially refunded for their
expenditures for the City entities. The auditor outlined numerous occasions where
thousands of dollars in PAL funds were used' in City sponsored projects. One of the
occurrences noted was a $3,000 dollar payment by PAL on 2/27/2008, for the purchase
of- table at the annual Law Enforcement: Officers Awards Banquet on behalf of the
Complainant: Office_of the Chief Page 20 of 27 12009- 9 030
..Subject.. ....r- PAL-Executive Board. _ . _,
Miami Beach Police Department...
The PAL's response was to no longer sponsor or assist in many. of the outlined events
and to adopt and utilize a "Program Assessment" form which would clearly ind"enfiify and
record the board's approval of sponsored and financed events. .
The enth shortcoming found by the auditor was about the, use of the American Express
Corporate credit cards. These cards were issued to the Executive Director Outside
Consultant and the Bookkeeper. On June 9,'. 2009, the cards were recalled by the
Executive Board and were no longer used unless prior approval was granted. Prior to
the recall, the auditor questioned a monthly bill of $25.90 charged to the card .by AOL.
The investigation revealed that in the year 2000 when the computer lab in the building
was first opened, an AOL account was necessary in order to provide AOL. email .
accounts for th staff. As time progressed,` the need for AOL membership became
unnecessary yet no one in the PAL .questioned the charges.. In October 2009, the
membership. was finally canceled. The auditor also noted 'that the cards were being
used by Mr.. Winer to pay for some of. his personal expenses. The card holder is
supposed to review his /her bill monthly and decipher .which charges are personal and
which are not.- The personal charges are supposed to be reimbursed to the PAL in a
timely fashion so as to not, indirectly, receive a non - interest bearing, short term loan
from the 50.1 c3.organization. The audit "showed that during the audit period; Mr. Winer
charged a total of $2,402 dollars in: `personal.- items such as air fare for family and
friends, meals locally and out -of- tow_ n, assorted items at Home Depot and Costco, etc.
Mr. Winer did reimburse the PAL a total . of $2,327 dollars leaving an outstanding
balance of $75.84. The auditor also noted that, Mr. Winer had earned Delta Air Line,
miles by the use of the credit card in general and had used some of those. miles to
garner reduced air fare for personal travel.
The audit also showed ,a charge for a $124 dollar wireless earphone and a $487 dollar
charge for two new cell phones paid for by PAL funds: The earphone and one of the
cell phones were for Mr. Winer, although his contract stipulated he would not receive
any additional benefits besides his salary and reimbursement for. reasonable expenses
associated with attendi g State and National PAL - Conferences. The auditor noted that
j the card, was used to` purchase meals which included alcoholic beverages that were
marked. as, business related expenses. During . the audited period, there were
approximately fifty -nine (59) meals purchased averaging $71.00 dollars each. In the
auditor's experience, the meals purchased were not excessive and amounted to
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approximately two (2) a month.
The PAL's responded to the auditors: findings was the implementations of more
stringent polices_ for the use of the corporate credit card and the? delineation of the
approved uses.
The eleventh shortcoming found by' the .auditor were expenditures made by the PAL,
which were not consistent with the PAL's mission. The auditor found a total of
$3,721.00 dollars,, in such purchases. The supporting documentation for those
purchases extended from conf erence registrations for a spouse, Costco membership for
staff and family members' food and /or flowers for family and friends' funerals, donations
Complainant: Office of the Chief Page `21 of 27 12009 -030
Subject:-- -
to : Coo per. City athletic organizations, wedding gifts; etc. Tie .audit showed that a
donation was made for $25,000.00 dollars, which was-deposited on April 2 2008
sponsoring a rafting trip to Hell'.s Canyon, Idaho.. The documentation also showed that
the donor did approve Mr. wiper's grandson (Jesse) to participate in the trip, although
he 'lived in Missouri. The total cost-of the`trip - was $28,704.00 dollars; :3,704.00 dollars
exceededr the donated money: 'The difference owed was paid for by the PAL. The
minutes of previous meetings made mention of the trip a`nd no documented- .approval
from the board found. This violated the by -laves of the organization. Also, no
documentation was located indicating that board's, approval of the disparity between the
donated money and the actual cost of the trip.
The auditor found an invoice dated December 4, 2008 from Restaurant Depot for $577
dollars`. A purchase of seven (7) racks of iamb, 14 pounds of skirt steaks, 15 pounds of-
flank steaks, nine (9) pounds of Angus ground chuck, two (2) packages of smoked
salmon with cracked pepper, meatballs, 22 pork "tend erloins, six (6) boxes of shrimp and
breaded shrit were made. The info
breaded to -the auditor was that the meats
were given to three needy individuals. No documentation existed nor did was the
Executive Board's. approval obtained. The PAL did make donations to the several
organizations during the audited period; Boy Scouts, Girl Scouts, .American Cancer
Society, and March -of Dimes' etc. - The auditor believed these _organizations do not
adhere to the PAL's mission statement.
The PAL's responded t0 the auditor's findings by the - implementing policy di - ctating that
expenditures of any amount that do not meet the PAL's mission statement shall first be
approved by the Board.. Additionally, closer scrutiny will be placed on future
expenditures submitted for reimbursement. -
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The twelfth shortcoming found by the auditor was the use of administrative Leave given
by the City to their employees involved in .PAL travel_.. The auditor recommended that
city employees, with the exception of the Executive Director, should not be afforded
administrative leave unless all other:options have been explored. -
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The City agreed to the auditor's recommendations.
The thirteenth and last shortcoming documented by the, auditor was an instance where
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a, part-time employee of the PAL, who was' also employed by a City agency, had not
filled the appropriate outside employment form as dictated by City and County policies.
The City. in their response advised that the employee Was currently in accordance with
the rules and did file his outside employment form with the City Clerk's Office. .
The auditor's report continued' with a summary of the. August 29, 2005 audit, which had
similar shortcomings to those found in the current audit. Some issues were either
ignored or remained unchanged.
For details on - the findings, recommendations and responses refer to the Miami Beach
Internal Au'di.t Report completed by Internal. Auditor Mr. James J. Sutter and signed off
by City Manager Jorge Gonzalez; dated February 25', 2010 on ,the Miarimi Beach Police
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Athletic League -for the period of October 1 2006 to May 31,. 2009.
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Complainant: Office of the Chief Page 22 of 27 12009 -030
Executive Board _.
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July 26, 2010
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In a meetin with City Mana er - Jor e Gonzalez, he informed me that Mr. Cohen was
g ` Y g
alleging. the PAL 'had in .,made a purchase for Glock pistols, several years
ago. After the meeting, f contacted Officer Morgan and requested he provide me with all
documents associated with the purchase of the Glock pistols mentioned by Mr. Cohen.
July.27, 2010
Officer Morgan provided me with the following documentation in reference to the
purchase of the Glock pistols:
r PAL payment record from Check #7399 dated 9/7/2007 documented the
purchase being made for the Explorer Program. "Firearms for Training &-
Competition Events" for $3,630.00." A note was written stating Firearm to
Remain at MBPD Range ".
A letter signed by Chief Noriega on City letterhead addressed to Lou's Police
Security and Equipment Company, dated September 7 2007. * In the letter the
Chief advised the Company .firearms were for Miami Beach departmental
use. -
nd Security. Equipment, Inc., dated September
A paid invoice from Lou's Police a
7, 2007, listing 10 Glock pistols model 1.7 for $363.00 each and totaling
$3,630.00. The serial # of the pistols bought according to the invoice were
LCC405, , LCC406, LCC407, LCC408, LCC409, LCC410. LCC411, LCC412,
LCC413, and LCC414.
A copy of check #7399 of. the PAL used 'to purchase the pistols, dated
September 7, 2007, for $3,630.00 made out to Lou' Police Supply signed by
Officer Morgan and Mr. Winer. The note on the check read. "Explorer Program
10 Glock firearms."
contacted Sergeant Guerrero, the Department's Range Master; and a sked him to
conduct an inventory of the Glock pistols !n the armory available for use by the Police
Explorers. Sergeant Guerrero advised me he had 10' Glock pistols model 17 for.use by
the Police Explorers and listed each serial number as indicated . in the invoice. All the
firearms were accounted for. A copy-of his e-mail 1s attached to the case file.
August 11, 2010
Captain Jennifer Elmore and l attended a: meeting at the State Attorney's Office with Mr.
Jose Arrojo and Ms. Johnette Hardiman. We discussed the investigation and !provided
Ms.. Hardiman with a .. Memorandum, which detailed the finding' s
and all applicable
exhibits that included the internal audit for her review:
-August 23, 2010
Assistant State` Attorney Ms. Hardiman drafted a Close Out Memo concluding :thafi the
State Attorney's' Office would not pursue any criminal charges as a result of this
Complainant: .Office of the Chief Page 23 of 27 12009 -030
'PAL Board
investigation.. As stated in the memo, their investigation is closed. A copy of the Close
Out Memo is attached to the, case file.
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FINDINGS;
Mr. Winer made purchases .using a PAL 'credit card for personal expenses, which :
does not rise to a level where criminal prosecution could be considered, but is in
violation of PAL policy. Ala the purchases :were reimbursed to the ` PAL. His
employment with the PAL was subsequently terminated. Mr. Winer and the
Board raised monies for the PAL, at times in violation of statutes which govern
. 501 c3.
® O.n several occasions the. PAL violated section 56:1.422 Florida Statutes dealing
with temporary alcoholic beverage permits, .but the statutes does not :have a. ;
criminal penalty.
The PAL- used their tax - exempt' statutes to purchase items for other
organizations. Although inappropriate, the Department of Revenue is'.the agency
responsible for investigating - those allegations.
;.: Officer Morgan approved several expenditures. in excess $2;500.00. Examples
of such expend itures. were the rafting trip and. the DNA Life. Print program. The.
practice, although condoned in the past by previous Executive Boards, was in
violation- of PAL by- laws. Mr. Francis; the: previous PAL president, advised that
Officer Morgan did have tacit approval. 'Although he confirmed Mr. Morgan's tacit
approval, he also condemned the practice stating it Was merely away of making-
purchases with no Executive Board approval. -Mr. Francis did . nothing to stop the
practice.
The Executive Board, in general, violated several of their own -policies, In .one.
instance, they created a. Committee to oversee Mr. Winer's situation.
That Special Committee, which in part consisted �of the . President and the
Executive Director, hired and paid for ti services of an attorney without first
in Executive Board s approval.. The Board did condone the Executive
obtaining cJ pp
Director having some freedoms without their direction, such as purchases of food
or shirts for Police Department, functions, which were at. times either-fully or.
partially reimbursed or not reimbursed at all.
The PAL's bookkeeping was questioned and found„ to not be as accurate as it
should.
Programs such as. the Thanksgiving Turkey. giveaway were not accurately
Complainant: Office of the 0hief Page 2 4 of 27 12
. - - _ 009 -030
- -.- Subject:.,_.- PAL - •Executive <Board.:.,. _.. _ :, _ ...m
documented. Hence, the amount of turkeys donated and to who they were
specifically donated was not documented.
The Gym wiled 6. have. concise polices and furthermore, failed to train
their Gym managers properly.: F °'
Several similar shortcomings were found in the 2005 audit , which were never
improved upon. The PAL continued to do business the same _way without
improving their operation, even after those shortcomings were brought to light.
The PAL's ,business operation was very, lackadaisical:
During the open criminal investigation, Detective AZim, Division Chief Riley end
Officer Morgan were not interviewed in order to safeguard a potential prosecution
brought forth ;by the State Attorney's ,Office and to avoid - conflicts with Garrity.
After consurlting with The State Attorney's Office, the +criminal investigation was
closed. At the conclusion of the criminal investigation,- it was determined that
there. were no administrative. violations in. connection with this investigation.
Based on the lack of ` ad.ministrative violations, the aforementioned employees
were not asked to provide an administrative statement.
The Miami Beach Police Department's Internal Affairs Unit received a Close Out
Memo from the Miami -Dade. State Attorney's Public Corruption Unit dated
September 2, 2010, This memo states any action that may be taken by the
- Department of Revenue, will. be handled separately. :
12009 0
Pa e 25 of 27 30
Complainant: Office of the Chief : g
Subject: PAL executive Board
CONCLUSION:
The PAL has been mis managed for at least a decade. The responsibility of this mis-
11 members of past Executive Boards, including
management is shared collectively by`a
Mr. Winer,- the past consultant: It seems the 'commonality shared amongst all
mentioned members is their sincere interest in the true cause and mission, of the PAL.
The PAL, like most organizations, businesses' or . private company has policies,
procedures and by -laws which guide them.. This investigation revealed that the policies,
procedures and by -laws of this - PAL are lacking, - outdated and for the most part not
adhered to. 'It is evident that "past .practice" has been the guiding light in this
organization: These failures do not fall under the purview of the Miami Beach Police
Department and are not governed by this Department's Standard Operating
Procedures.
The investigation noted 'a number of shortcomings found by the internal 'auditor, the
organization's accountant, past members 'of - the Executive Board and _myself. The
shortcomings have breached the PAL's inner policies,. procedures and its 'by -Taws. The
auditor did find some instances where some Federal tax laws and Florida Statutes
may have been ignored. Consultation with .Ed Tetterton, Investigation Manager of the
Florida Department of Revenue (Department), brought to Fight the complexity of an
investigation into matters of this type. Though not usually pursued as criminal matters,
the Department of Revenue has administrative and civil remedies that maybe pursued.
To date, Ms. Veski, Ms. Cruz; Mr. Stowe and Mr. Stern have not contacted the Miami
'Beach Police Internal Affairs Office in order to schedule an interview: During the
criminal investigation, Detective Azim, Division Chief Riley and Officer Morgan were not
interviewed in. order to safeguard a, potential prosecution brought forth by the State
Attorney's Office. At the conclusion of the criminal investigation, it was determined that
there was. insufficient evidence of any type to pursue Miami Beach Police Department
administrative violations. The -PAL is,a completely independent entity which is governed
by their Policies, Procedurea and their Board of Directors, not by the., Miami Beach
Police Department or the City of Miami Beach.' As per, an agreement the City has with
the PAL, the Department detaches a sworn police off cer to the P:AL- who in turn holds
the position of Executive Director, The PAL is an independent organization; neither the
Department nor the City has the ability to enforce violations of PAL Policies and
Procedures. The officers involved in this investigation did: not violate any Department or
City, Policies and Procedures.
The Miami -Dade State- Attorney's .Office ,reviewed this investigator's- findings, and
concluded to not pursue any criminal'. charges.
Violaion 1: Theft FSS 812.014 by Misappropriation of PAL Funds an Assets:
UNSUBSTANTIATED.
' Complainant: Office of the Chief Page 26 of 27 12009 -030
-.PAL,Executive.Board_ -v..-
"l,- the undersigned, do hereby swear, under penalty of perjury, that, to the best of my
personal knowledge, information, and belief, 1 have not knowingly or willfully deprived,
or allowed another to deprive, the subject of the investigation of any of the rights
contained in SS. 1 12.532 and - 112,533 , Florida Statutes. "
j Investigator: Sergeant Osvaldo Ramos Dat
Internal Affairs Unit Sergeant
VlOitness• 'lieutenant Julio Yero Date
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Internal Affairs Unit Sergeant
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Reviewed by: Captain Jennifer Elmore Date
Internal Affairs Unit Commander
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Approved by: Chief Ca Date
Chief of POlice
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Complainant: Office of the Chief Page 27 Of 27. 12009 -030
- Subject:.. . PAI- Executive. Board