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Doing Well by Doing Good: Investigators hot on his trail, Armand Tiano, pictured here in a 1994 campaign flier, in February incorporated a new nonprofit with a familiar-sounding name: Police and Sheriffs' Athletic League Community Fund, Inc., currently accepting donations. Badge Calls Former sheriff candidate Armand Tiano's 'charity' pitches pulled in more than $2.6 million since 1995. Now, authorities are trying to determine just where the money went. By Will Harper WHEN POLICE RAIDED the Sunnyvale office of the Santa Clara County Police and Sheriffs' Athletic League (PSAL) on April 13, the filing cabinets were mostly empty except for hanging folders. According to a follow-up search warrant affidavit, the office manager told investigators that weeks earlier he had emptied the cabinets and sent the paperwork inside them to the San Jose office to be shredded. He said he was told by one of the organization's fundraisers, Sam Marino, "to box up anything that had the PSAL logo on it." When asked by Metro if he shredded documents, Marino said at first, "Not really." Then he insisted no records had been destroyed. But by now the PSAL knew authorities were on its trail. Investigations into the nonprofit "social club" had started in late 1999. At the center of the inquiry was the club's president and founder, a man well-known to authorities and local voters: 61-year-old retired lieutenant Armand Tiano, a 25-year veteran of the Santa Clara County Sheriff's Department and candidate for sheriff in 1994. On Feb. 9, investigators met with the former candidate and lawman and asked him about some of his organization's activities. As DA investigator John Pedersen tells the story, a 90-year-old Palo Alto woman received a phone call in May 1998 from a representative of the "Santa Clara County Deputy Sheriff's office" who "told her that they urgently needed donations." The woman gave the caller her credit card number and made a $100 donation. The following month when she got her Visa statement, it showed eight charges totaling $800 paid to "S C CO. Deputy Sheriff/At San Jose, CA." Prosecutors say the address listed for the "S C CO. Deputy Sheriff" merchant account is Tiano's home address. After initially refusing to return the money, PSAL fundraiser Sam Marino of Marino and Associates refunded it after her attorney threatened legal action, authorities contend. Tiano told prosecutors he was not aware of the elderly woman's complaint. Pederson quoted Tiano as saying "it was probably an example of an employee of the fundraiser who acted inappropriately." Prosecutors then brought up another complaint. An attorney told authorities that in 1998 the PSAL had been selling Easter baskets for $40 apiece--an item valued at $9.95--supposedly to raise money for the Lucile Salter Packard Children's Hospital and its foundation. However, hospital attorneys said the PSAL and its commercial fundraisers never obtained permission to solicit for the hospital or its foundation. Tiano apparently remembered this complaint. He told investigators the PSAL no longer solicits money on behalf of the hospital. For months, investigators pressed for an accounting of the PSAL's finances. But according to Pedersen's affidavit, Tiano only produced bank and tax records for 1998. Tiano's attorney, Bernie Allard, insists, "We've cooperated with the DA's office from day one. Whatever documents we had, we gave to them." Nonetheless, authorities obtained a search warrant and seized business records and equipment from the PSAL's two offices and the offices of its accountant and fundraisers, as well as Tiano's south San Jose home. Assistant District Attorney Al Weger says police seized those records to determine how PSAL has really spent its money. Since 1995, PSAL and a related Tiano "social club" have raised more than $2.6 million, records show. But prosecutors say that nearly $300,000 is still unaccounted for because Tiano never bothered to file state-required financial documents. Investigators suspect PSAL president Tiano and his associates may have committed grand theft--although to date no charges have been filed. Although Tiano claimed donations to the PSAL were being used for charitable purposes, Weger says, "We had evidence that they weren't." Athletic Supporters ACCORDING TO its own literature, the goal of the Police and Sheriffs' Athletic League is to "promote athletics and education over drug use and gang involvement." Deputy District Attorney Martha Donohoe says the PSAL itself is not a charity, but it participates in charitable activities and thus is subject to state oversight and reporting requirements. Earlier this year, Tiano provided local and state investigators with a list of organizations to which the PSAL has contributed money, clothes, food or services, including several Little League and Pop Warner football teams, schools, churches and shelters. He did not specify exactly what or how much was donated in each case. Authorities say 1998 PSAL banking records do show payments to schools and sports teams. But investigators say it also appears that Tiano has exaggerated how much money the PSAL has donated to charity. Investigators contacted several of the organizations Tiano listed as having received cash donations from the PSAL. Of the seven that replied, only one charity had any record of receiving any PSAL cash--a total of $1,000--from 1995 through 1999. Based on documents they obtained, investigators believe that money raised for charity by the PSAL paid for fundraisers, telemarketers, cell phone costs, employee loans, political contributions, Tiano's monthly $500 stipend and race-truck fees. Tiano regularly races a 1997 Chevrolet truck on the National Auto Sport Association circuit. Many checks obtained by authorities are made out to "Cash." Tiano's attorney, Allard, insists all funds raised by the PSAL for charity "went exactly where they were supposed to go. This is all trial by innuendo." Proving that the money went where it was supposed to go won't be easy. Tiano himself apparently told investigators in February that he did not keep records of his charitable donations. STATE RECORDS filed by the PSAL's two commercial fundraisers--Marino and Associates and Family Entertainment Group of California--show they have been the primary financial beneficiaries of Tiano's venture. Of the $2.62 million the two companies raised for PSAL and Tiano's previous social club since 1995, they took 85 percent off the top in fees and expenses. The remaining $392,747, the fundraisers' reports show, went to the PSAL--which investigators characterize as an accounting black hole. Except for records Tiano recently turned over that show PSAL's 1998 financial activities, Tiano has never accounted for how his charitable club has spent the money raised on its behalf, authorities say. Regarding the fundraisers' fees, Donohoe says, it's not uncommon for commercial fundraisers to keep more than half of what they raise for charity. Prosecutors are more interested in what they call "potentially deceptive fundraising practices" by those telemarketers on behalf of the PSAL. In one case, which appears in the search warrant, a telemarketer claimed to one potential donor that more than 90 percent of all proceeds go to charity. And in spite of its name, authorities say the Police and Sheriffs' Athletic League has no affiliation with local law enforcement agencies. Sheriff's spokesman John Hirokawa says PSAL telemarketers allegedly have misrepresented themselves as calling on behalf of the sheriff. "We've received complaints," Hirokawa says, "about the attitude [of the telephone solicitors] who would be like, 'Why don't you donate to us? We're from the sheriff's office.' " PSAL fundraising letters--including one for its 1999 Christmas show at the San Jose Civic Auditorium--list Tiano simply as "Lt. Armand Tiano," forgetting to mention he's retired. Donohoe says the PSAL and its fundraisers have duped donors into thinking they were contributing to an organization affiliated with local law enforcement. "There's been a theft," Donohoe argues, "because people misunderstood the reason they were being solicited and what the money was being used for." And until police seized PSAL financial records earlier this month, only Armand Tiano probably could say with any certainty how the money was being spent. The Bad Lieutenant: In an infamous photo that circulated during his 1994 campaign, Tiano (far right) poses outside the Pink Poodle Strip Club. The snapshot was a defining moment for Tiano, who wound up losing the election. Alpha Bits THE CHIEF FINANCIAL officer of an organization usually knows where the money's going. But in the PSAL's case, the person listed in legal documents as CFO says he wasn't even aware that he was part of the organization. Last year Sgt. Frank Damiano of the sheriff's department, who was working in the transit division at the time, bumped into a familiar face he hadn't seen for a while. The visitor to the office that day was retired Lt. Armand Tiano. In the early '90s, the two cops became acquainted when they were both assigned to the jails. Damiano says he liked the loquacious lieutenant and thought "he had his heart in the right place." Damiano hadn't seen much of Tiano since being reassigned out of the jails in 1995. He estimates having spoken with the former union president maybe once or twice in the intervening years. The two chitchatted for about 10 to 15 minutes, catching up. During their exchange, Damiano says Tiano never mentioned anything about the PSAL or its activities. "It was more of a friendly conversation," Damiano says, "between a couple of acquaintances." Tiano seemed to view their relationship differently. In February 1999, he listed Damiano as the PSAL's chief financial officer on a document filed with the secretary of state. But Damiano says he has never been involved with the PSAL. In fact, Damiano says he didn't even know he was the organization's CFO until Metro informed him of the filing. Damiano does acknowledge having been approached by Tiano in 1993 or 1994 about participating on the board of directors of a new organization he was forming. That organization later became the Santa Clara County Deputy Sheriffs' Athletic League, or DSAL. Tiano told Damiano at the time that the DSAL would do things like donate money to Little Leagues and clubs. Damiano agreed to help out. "It seemed like a great idea," Damiano says. "He [Tiano] said, 'I'll take care of everything.' ... Quite honestly, that was about the extent of my involvement." In a corporate document filed with the state in 1995 for the DSAL, Tiano listed himself as president and CFO. He listed Damiano as secretary. But Damiano insists he never attended a DSAL board meeting or was ever even notified of board meetings. "I completely forgot I was on any board," Damiano says. And after the DSAL changed its name to the Police and Sheriffs' Athletic League in 1998, Tiano neglected to inform Damiano of his role as the new group's CFO. "Had I known that was my position," Damiano says, "I would have started inquiring about what was going on." This isn't the first time Tiano's charity work has come under scrutiny. A few years ago, complaints from the public got Tiano into hot water with the Deputy Sheriffs' Association--the union for which he served as president--and forced him to adopt the name of Police and Sheriffs' Athletic League. In 1995, some union board members began expressing their displeasure with the PSAL's predecessor, the DSAL. Sgt. Jose Salcido, now president of the union, says that the DSA office was "getting a lot of calls from people complaining about the way he [Tiano] was raising the money," Deputy Joe Charvez, the union's vice president, recalls being miffed at the time because the DSA ended up taking some of the blame for the activities of Tiano's unrelated group. "With the names being so similar," Charvez explains, "people couldn't tell [DSA and DSAL] apart from each other. ... We didn't like the negative image it was generating [for the DSA]." Party of None IN 1996, union officials in the DSA began keeping a log of the complaints they were getting about the DSAL. Here's a sample of a few recorded gripes: * May 21, 1996: Woman "called and complained regarding a telephone solicitor who called her back several times and then swore at her." * Oct. 18, 1996: "No name given, caller was very angry. Her husband and grown children were traveling out of town. They [DSAL] called at dinnertime and told her not to be alarmed that this was the Deputy Sheriffs' Association and she could put her hands down now! Scared the hell out of her because she thought something had happened to her husband or children." * Dec. 3, 1996: Woman "was solicited by the DSAL and was told that 100 percent of her money goes to the charity and that the person who was calling was strictly a volunteer." Charvez says that DSA officials considered suing Tiano to change the name, but legal costs made it prohibitive. Instead, the DSA negotiated a deal with Tiano in October 1997 to pay him $7,500 for costs relating to changing his organization's name. Tiano later settled on the Santa Clara County Police and Sheriffs' Athletic League. The PSAL is a mutual benefit corporation or, more simply, a social club--a club that prosecutors say appears to have no members. Following the Money AS METRO GOES TO PRESS, investigators are poring through the financial records they seized from Tiano and his accountant and fundraisers. No criminal charges have been filed at this time. Deputy District Attorney Martha Donohoe says, "We're going to study our records we have and see what's there." Deputy Attorney General Belinda Johns says her office is closely watching what county prosecutors turn up. The attorney general's office opened its own investigation in late 1999 in response to consumer complaints about the PSAL, Johns says. According to Johns, Tiano has flouted financial reporting requirements going all the way back to 1993 and the days of the Deputy Sheriffs' Athletic League. That means that $437,630 donated to PSAL and DSAL are unaccounted for and state officials have no idea how much of that money actually went to charity. Local and state investigators are also looking into whether Tiano and fundraisers used by the PSAL committed felony payroll tax violations. Tiano did not respond to repeated requests for an interview. Attorney Allard says he's confident that after local prosecutors go through all the records they seized, his client will prevail. "I doubt very much that they'll have a case that comes close to their primary allegations," Allard predicts. Metro has learned that in February, as investigators were breathing down his neck, Tiano incorporated a new nonprofit with a similar name: Police and Sheriffs' Athletic League Community Fund, Inc. And according to investigators, the new organization was busy before the holiday raising money for its Easter basket drive. [ San Jose | Metroactive Central | Archives ]