FORENSIC ACCOUNTANT’S REPORT

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Written By: Ken Tam Pg. 1 March 11, 2020

Type of Investigation:

Theft and Perjury

Docket / File / Police Report No.

013-1000597

Subject / Defendant:

Joe Canciamilla

Inspector Assigned:

Wallace

Date Assigned:

January 15, 2020

FORENSIC ACCOUNTANT’S REPORT

I. BACKGROUND I am a Forensic Accountant with the Contra Costa County District Attorney’s Office. I have a Bachelor’s of Science degree in Business Administration from the University of California at Berkeley, a Master’s of Science degree in Accounting from the University of Nevada at Las Vegas, an active Certified Public Accountant licensed by the State of California, and I am a Certified Fraud Examiner. I am an adjunct professor of Accounting for California State University – Stanislaus. I have performed forensic accounting for approximately seventeen years for cases in Federal District Court and in California Superior Court. I testified as an expert witness in Forensic Accounting approximately 20 times in the last 4 years. I was asked to examine evidentiary items to determine if Joe Canciamilla committed perjury on California Form 460s that he had submitted. II. EXECUTIVE SUMMARY The analysis of the examined items found Canciamilla to have made material misstatements in Filed Form 460s and Filed Amended Form 460s, that cover the time period 1/1/2010 through 12/30/2016. The Filed Form 460s and Filed Amended Form 460s were filed on dates between 7/27/2010 through 5/1/2017. The misstatements revolve mainly around Canciamilla not reporting Investment Gains in a Campaign bank account that traded stocks. Canciamilla spent some of those Investment Gains on personal expenditures that either were not reported, or were reported as campaign expenses that he later stipulated were personal in nature. Some of the personal expenditures included vacations to Asia, and to repay a personal loan at CCFCU. Canciamilla actually spent more on personal expenditures than the unreported Investment Gains, and had to make contributions of personal funds to make up the difference. III. SCOPE The following items were examined:

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Written By: Ken Tam

Pg. 2 March 11, 2020

1. State of California Form 410, Form 460s, and Amended Form 460s filed by Joe Canciamilla that cover the time period 1/1/2010 through 12/30/2016. 2. From Contra Costa Federal Credit Union: Monthly statements for the following accounts: a. Checking account 39724-01, in the name of Joseph Canciamilla, for the time period 1/1/2010 through 12/31/2016. b. Checking account 39724-11, in the name of Joseph Canciamilla, for the time period 1/1/2010 through 12/31/2016. c. Loan account 39724-63, in the name of Joseph Canciamilla, for the time period 6/27/2011 through 10/24/2014. d. Money Market account 39724-90, in the name of Joseph Canciamilla Friends Account, for the time period 6/27/2011 to 12/31/2016. e. Certificate of Deposit accounts 39724-30 and 39724-91, in the name of Joseph Canciamilla, for the time period 3/13/2015 through 10/7/2015. 3. From Schwab Bank: Monthly statements for the following accounts: a. Investment account 7429-4258, in the name of Joe Canciamilla For Contra Costa County Clerk, for the time period 10/8/2012 to 12/31/2016. In the interest of brevity, this account will hereafter be referred to as the “Schwab Clerk Account”. b. Investment account 5451-7394, in the name of Friends of Joe Canciamilla, for the time period 2/1/2010 to 11/30/2012. In the interest of brevity, this account will hereafter be referred to as the “Schwab Judge Account”. 4. State of California Fair Political Practices Commission (FPPC) Investigation Report dated 8/21/2019. 5. State of California Franchise Tax Board (FTB) Auditor Notes for audit of Joseph Canciamilla’s “Joe Canciamilla for Contra Costa County Clerk Recorder 2014” campaign bank account 6. Stipulation, Decision, and Order for FPPC Case #17/146 regarding Joseph Canciamilla dated 11/21/2019. 7. Response #6 dated March 6, 2019 from Law Office of Andreas C. Rockas to FPPC. 8. Candidate Audit Questionnaire completed by Joseph Canciamilla to FTB dated 11/19/2015. 9. Investigative Report of Contra Costa County Senior Inspector Larry Wallace. These items were examined to determine if Joe Canciamilla committed perjury on California Form 460s that he had submitted. IV. BACKGROUND AND APPROACH Background

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Written By: Ken Tam

Pg. 3 March 11, 2020

On or about 10/07/2015, FTB notified Joe Canciamilla’s office that Canciamilla’s Campaign Committee bank accounts were going to be audited. The audit concluded on or about 12/30/2016, and a referral for further investigation was made to FPPC. On 11/21/2017, the FPPC notified Contra Costa County District Attorney Diana Becton that the FPPC had opened an investigation regarding potential violations of the Political Reform Act by Joseph Canciamilla, the Contra Costa County Clerk-Recorder for the time period 10/01/2012 to 6/30/2019. In FPPC Case #17/146, on 11/21/2019, Joseph Canciamilla stipulated that he had commingled campaign funds with personal funds, and that he had made personal use of campaign funds, between the dates 5/27/2011 and 6/15/2015. Nearly all of this activity was concealed from Canciamilla’s campaign filings through a mixture of non-reporting, over-statement of available cash on hand, and other reporting violations. In a California Form 501 filed in Contra Costa County on 10/1/2012, Canciamilla declared his campaign bank account to be at Charles Schwab, account number 7429-4258, hereafter referred to as the “Schwab Clerk Account”. In a Candidate Audit Questionnaire response to the FTB, Canciamilla, on 11/19/2015, declared his campaign bank accounts to be the Schwab Clerk Account, from 10/8/2012 through 11/19/2015, and Savings Account 39724-01 at Contra Costa Federal Credit Union (CCFCU), from 6/27/2011 through 10/7/2015. The CCFCU Account 39724-01 will hereafter be referred to as the “CCFCU Declared Account”. From the time period 1/1/2010 through 11/30/2012, Canciamilla had another campaign account, Schwab Investment account 5451-7394, in the name of “Friends of Joe Canciamilla”. The Form 460s for this account were also examined. Approach As Canciamilla listed both the Schwab Clerk Account and the CCFCU Declared Account as his committee’s financial accounts, this analysis will consider the Schwab Clerk Account and the CCFCU Declared Account as Canciamilla’s campaign committee accounts. The amounts of actual deposits, withdrawals and balances in the two accounts will be combined. This analysis will compare the amounts listed on the Form 460s filed by Canciamilla, against the actual deposits, withdrawals and balances in combined accounts, for the time period 1/1/2010 through 12/31/2016. V. FINDINGS This section of the report will list examined Form 460s, and the differences, if any, between the amounts filed on the Form 460s and the actual amounts per the declared campaign committee accounts.

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Written By: Ken Tam

Pg. 4 March 11, 2020

Canciamilla For Judge 2012, Friends of Joe, Filing Period 1/1/10 - 6/30/10, filing date 7/27/2010

Per Form

460 Per Actual Schwab and CCFCU

Bank Statements

Beginning Cash Balance $252,336.14 $0.00

Cash Receipts $0.00 $252,336.14

Miscellaneous Increases to Cash $0.00 ($956.20)

Cash Payments ($2,250.00) ($2,250.00)

Ending Cash Balance $250,086.14 $249,129.94

In this Form 460, Canciamilla did not report:

1. Investment Losses of $956.20.

In this period, the Form 460 overstated the amount of cash in the campaign accounts by

$956.20 due to the non-reporting of the Investment Losses.


Per Form


Bank Statements

Beginning Cash Balance $250,086.14 $249,129.94

Cash Receipts $0.00 $0.00

Miscellaneous Increases to Cash $852.89 $3,027.93

Cash Payments $0.00 ($1,218.84)


In this Form 460, Canciamilla reported:

1. Investment gains of $852.89 instead of the actual gains of $3,027.93.

2. Canciamilla did not report two Southwest Air purchases, a Priceline purchase, and a Save

Mt. Diablo purchase totaling $1,218.84. Those purchases appear to be personal in nature

and not campaign related. Canciamilla accurately reported the ending cash balance of

$250,939.03.

The entries in the filed Form 460 indicate Canciamilla reported an accurate ending cash balance even though Canciamilla did not report apparently personal expenses. Canciamilla was able to do this by reporting a lower than actual amount of investment gains. The difference between the actual and reported investment gains covered the apparently personal expenses of $1,218.84, and the investment trading loss of $956.20 in the prior reporting period. The filed Form 460 indicated Canciamilla used unreported investment gains to pay for apparently personal expenses.

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Written By: Ken Tam

Pg. 5 March 11, 2020


Per Form


Bank Statements


Cash Receipts $0.00 $136,633.90


Cash Payments ($30,199.95) ($185,449.11)



1. Cash payments of $140,520 from the campaign accounts to other personal accounts.

2. Cash payments of $14,729.16 of apparently personal expenditures, of which Canciamilla

stipulated $13,700 as being personal.

3. Cash contributions of $136,633.90, which consisted of $6,633.90 in personal funds per

Canciamilla’s stipulation, $65,000 from a personal loan drawn on CCFCU, and $65,000 from

the personal checking account that received $70,000 from the Schwab Judge Account.

4. Investment gains of $2,568.30.


$16,046.96, due to unreported cash payments for personal expenses. The unreported trading gain of

$2,568.30 helped cover the amount spent on the unreported personal expenses.

$70,000 of the cash payments was a transfer on 6/27/2011 from the Schwab Judge Account to

CCFCU 39724-11, which was a personal account of Canciamilla. On 6/27/2011, $65,000 out of the

$70,000 that was transferred to CCFCU 39724-90 was then transferred to the CCFCU Declared Account,

and the remaining $5,000 was spent on 6/28/2011 as part of a $5,518.86, CK #1045, on a presumably

personal purpose.

Another $70,000 of the cash payments was a transfer from the CCFCU Declared Account to

CCFCU 39724-90, which was a personal account of Canciamilla, and from that account, $69,500 was

transferred to CCFCU 39724-11, which was a personal account of Canciamilla. After the funds reached

the CCFCU39724-11, the $65,000 was spent on presumably personal purposes, including $15,000 on

7/8/11 to pay off an American Express Card, $29,000 on 7/8/11 to pay off a Bank of America Credit Card,

and $1,140 on 7/11/11 to make a loan payment to IndyMac. Records from American Express indicate

the $15,000 was used to pay off home remodeling expenses.

Canciamilla stipulated that he comingled the $70,000 that he transferred from the Schwab

Judge Account to CCFCU 39724-11 with personal funds.


$16,046.96, due to unreported Cash Payments for apparently personal expenditures being more than

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Written By: Ken Tam

Pg. 6 March 11, 2020

unreported Cash Receipts from apparently personal sources. The Investment gains of $2,568.30 helped

lower the overstatement.


Per Form


Bank Statements



Miscellaneous Increases to Cash $0.00 ($13,508.36)

Cash Payments ($9,201.50) ($11,905.67)



1. Cash Payments of $1,060.00 from the Schwab Judge Account for apparently personal

purchases, including 2 purchases at American Airlines and 1 purchase at Dreamhouse Raffle.

2. Cash Payments of $1,644.17 from the CCFCU Declared Account to another personal account.

3. Investment losses of $13,560.11 and interest income of $51.75, resulting in a Miscellaneous

Decrease to Cash of ($13,508.36).


$32,259.49. The $32,259.49 overstatement is more than the $16,046.96 overstatement in the last

period due to Investment losses and unreported Cash Payments in the current period.


Per Form


Bank Statements




Cash Payments ($4,145.89) ($4,144.89)



1. Investment gains and interest of $9,998.57.


$22,259.92. The $22,259.92 overstatement is less than the $32,259.49 overstatement in the last period

due to Investment gains.

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Written By: Ken Tam

Pg. 7 March 11, 2020


Per Form 460 Per Actual Schwab and CCFCU

Bank Statements


Cash Receipts $0.00 $133,016.19


Cash Payments ($207,391.69) ($133,016.19)

Ending Cash Balance $0.00 $197,683.30

Note: The Ending Cash Balance Per Form 460 should be $207,391.69, as the Form 460 indicated $207,391.69 was transferred to the Schwab Clerk Account, which was one of the two Declared Campaign Committee Accounts. In this Form 460, Canciamilla did not report:

1. Investment gains and interest totaling $12,551.53.


$9,708.39. The $9,708.39 overstatement is less than the $22,259.92 overstatement in the last period

due to Investment gains and interest.

Joe Canciamilla for Contra Costa County Clerk/Recorder, Filing Period 10/3/12 - 12/31/12, filing date 1/23/2013

Per Form


Bank Statements


Cash Receipts $0.00 $2,866.00


Cash Payments $0.00 $0.00


In this Form 460, Canciamilla did not report: 1. Investment gains and interest totaling $2,363.99.

2. Cash contribution of $2,866.00.


$4,478.40. The $4,478.40 overstatement is less than the $9,708.39 overstatement in the last period due

to unreported investment gains and interest, and an unreported campaign contribution.

The beginning Cash Balance of $207,391.69 is technically incorrect, as the Schwab Clerk Account started the period with a balance of $0, as it was a new account. From 10/30/2012 through 11/1/2012,

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Written By: Ken Tam

Pg. 8 March 11, 2020

$133,016.19 was transferred from the Schwab Judge Account to the Schwab Clerk Account. The remaining $64,667.11 of funds can be found in the CCFCU Declared Account.

Joe Canciamilla for Contra Costa County Clerk/Recorder, Filing Period 10/1/12 - 12/31/12, filing date 4/19/2016 (Amended Form 460)

Per Form


Bank Statements

Beginning Cash Balance $0.00 $197,683.30


Miscellaneous Increases to Cash $205,380.18 $2,363.99

Cash Payments $0.00 $0.00


On or about August 25, 2015, FTB notified Joe Canciamilla’s office that Canciamilla’s campaign committee accounts for the time period 2012-2014 were being audited. The FTB audit was completed on or about December 30, 2016. Prior to the completion of the FTB audit, Canciamilla amended a number of Form 460s. The Amended returns were also examined and included in this report. Above is the first Amended return that was examined. In this Amended Form 460, Canciamilla:

1. Correctly noted that the Schwab Clerk Account received a transfer of money from the

Schwab Judge Account, and also included funds in the CCFCU declared account.

2. Canciamilla did not report Investment gains and interest of $2,363.99

3. Canciamilla did not report a cash receipt of $2,866.00 of presumably personal funds.

The non-reported transactions indicate that Canciamilla knew his actual bank account balances are less than what he reported on the Form 460, and contributed personal funds to help make up the shortfall. The shortfall was caused in prior periods from unreported cash expenditures for personal purposes.


Per Form


Bank Statements




Cash Payments ($3,974.00) ($4,894.80)



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Written By: Ken Tam

Pg. 9 March 11, 2020

1. Cash receipts of $1,904.34, of which $968.67 Canciamilla stipulated as being personal funds.

2. Cash payment of $935.67 which consisted of a transfer to a personal account.

3. Investment gains and interest of $3,548.48.

The entries in the filed Form 460 indicate Canciamilla reported an almost accurate ending cash balance, indicating he had knowledge of how much should be in his declared accounts. Canciamilla was able to eliminate the $4,478.40 overstatement in the prior period by not reporting investment gains and interest, and not reporting personal cash contributions. The records indicated Canciamilla used investment gains and interest, and contributions of personal funds to pay for personal expenses and transfers to personal bank accounts.

Joe Canciamilla for Contra Costa County Clerk/Recorder, Filing Period 1/1/13 - 6/30/13, filing date 2/29/2016 (Amended)

Per Form


Bank Statements




Cash Payments ($3,959.13) ($4,894.80)


In this Amended Form 460, filed after notification of the FTB audit, but prior to the completion of the FTB audit, Canciamilla reported the investment gains of $3,498.55 in the Schwab Clerk Account, but did not report the interest earned in the CCFCU declared account. Canciamilla did not report the following items:

1. $49.93 in interest in the CCFCU Declared Account

2. $1,904.34 of presumably personal contributions in the CCFCU Declared Account, of which

$968.67 Canciamilla stipulated was a contribution of personal funds

3. $935.67 cash payment, a transfer from the CCFCU Declared Account to a different personal

account.

This Amended Form 460 is more accurate than the original Form 460 for this time period, but still failed to $1,904.34 in Cash Receipts, and $935.67 in Cash Payments.

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Written By: Ken Tam

Pg. 10 March 11, 2020


Per Form


Bank Statements




Cash Payments ($956.58) ($2,049.08)


In this Form 460, Canciamilla did not report: 1. $7,763.62 in investment gains and interest

2. $1,092.50 in cash receipts from presumably personal funds

3. $1,092.50 cash payment, a transfer from the CCFCU Declared Account to a different

personal account.

In this period, the Form 460 understated the amount of cash in the campaign accounts by

$7,817.55, due to unreported investment gains and interest. By understating the amount of cash in the campaign accounts, Canciamilla had unreported funds that he could potentially use for personal purposes, without reporting those personal expenditures.


Per Form


Bank Statements




Cash Payments ($1,006.58) ($2,049.08)


In this Amended Form 460, filed after notification of the FTB audit, but prior to the completion

of the FTB audit, Canciamilla reported the investment gains of $7,762.36 in the Schwab Clerk Account, but did not report the $51.57 interest earned in the CCFCU declared account. Canciamilla did not report $1,092.50 in cash receipts from presumably personal funds in the CCFCU declared account. Canciamilla did not report a $1,092.50 cash payment, a transfer from the CCFCU Declared Account to a different personal account.

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Written By: Ken Tam

Pg. 11 March 11, 2020


Per Form


Bank Statements




Cash Payments ($18,578.08) ($15,019.14)


In this Form 460, Canciamilla: 1. Underreported Investment income and interest of $76,564.83.

2. Reported Miscellaneous Increase to Cash of $5,310 from Contra Costa County Clerk /

Recorder for Return of Statement Fee on 4/15/2014. In a response to the FPPC, Canciamilla

advised the $5,310 was deposited into a personal checking account. The FPPC investigation

determined this check was actually deposited into CCFCU 39724-11, a separate personal

account of Canciamilla, on or about 5/7/2014, and spent on personal purposes.

3. Reported a cash payment of $3,500 to Save Mt. Diablo that did not occur per the actual

bank records.


$82,631.32, primarily due to the underreporting of investment income and interest.


Per Form


Bank Statements




Cash Payments ($11,469.14) ($10,822.14)



of the FTB audit, Canciamilla correctly reported interest income of $19.76 in the CCFCU Declared Account, but did not report $35,880.01 in investment gains in the Schwab Clerk Account.



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Written By: Ken Tam

Pg. 12 March 11, 2020


Per Form


Bank Statements




Cash Payments ($3,500.00) ($4,197.00)



of the FTB audit, Canciamilla correctly reported interest income of $16.95 in the CCFCU Declared Account, but did not report $32,093.29 in investment gains in the Schwab Clerk Account.




Per Form


Bank Statements




Cash Payments ($1,732.74) ($33,283.93)


In this Form 460, Canciamilla: 1. Reported a Miscellaneous Increase to Cash of $3,500 from Campaign Strategies Rancho

Mirage 6/10/2014 that did not occur.

2. Did not report a Cash payment $20,000 on 6/12/2014 for a presumably personal purpose.

3. Did not report a Cash receipt of $20,000 on 6/4/2014 from presumably personal funds.

4. Did not report a Cash payment of $10,649.00 to Odyssey Travel on 6/13/14 that he later

stipulated was for personal travel expenses for a vacation to Asia.

5. Did not report cash payments for $2,341.19 that he declared on a later Amended Form 460

as campaign expenditures.

6. Did not report $23,849.24 in Investment gains and interest.


$77,987.84, primarily due to the underreporting of investment income and interest in this period and in

prior time periods. The $77,987.84 under statement is less than the $82,631.32 in the prior period due

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Written By: Ken Tam

Pg. 13 March 11, 2020

to the unreported cash payments being greater than the unreported investment income, and the

reporting of a Miscellaneous Increase to Cash of $3,500 that did not occur. Canciamilla spent some of

the cumulative unreported investment gains on unreported personal expenditures.


Per Form


Bank Statements




Cash Payments ($13,283.93) ($33,283.93)



of the FTB audit, Canciamilla: 1. Reported $91,699.12 in Investment Income, very close to the actual amount, $91,785.83,

that the account earned from 1/1/2014 through 6/30/2014.

2. Did not report a Cash payment $20,000 on 6/12/2014 for a presumably personal purpose.

3. Did not report a Cash receipt of $20,000 on 6/4/2014 from presumably personal funds.

4. Reported a campaign expense of $10,649 to Odyssey Travel that he later stipulated was a

personal travel expenses for a vacation to Asia.

5. Reported an accrued expense to Let’s Fly Cheaper for $9,845.38 that was charged to an

American Express card, that was paid on 7/10/2014, that Canciamilla later stipulated was a

personal travel expense for a vacation to Asia.

In this Amended Return, the Form 460 ending cash balance of $275,158.14 was very close to the

actual ending cash balance of $273,798.13, due to Canciamilla almost correctly reporting the amount of

Investment gains in the Schwab Clerk Account.


Per Form


Bank Statements




Cash Payments ($13,283.93) ($33,283.93)


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Written By: Ken Tam

Pg. 14 March 11, 2020

In this Amended Form 460, filed after notification of the FTB audit, but prior to the completion of the FTB audit, Canciamilla reported the same numbers as the Amended Form 460 filed on 2/29/2016. In this Amended return, Canciamilla listed in greater detail the payees of the cash payments.

The same errors detailed in a prior paragraph in the Amended Form 460 that was previously

filed on 2/29/2016 are also present in this Amended Form 460.


Per Form


Bank Statements




Cash Payments ($1,969.55) ($73,522.56)


In this Form 460, Canciamilla: 1. Reported $5,200 in Miscellaneous Increases to Cash consisting of $3,000 in Investment

Income and $2,200 from sale of old office equipment. The bank records did not show any

records of a $2,200 deposit from the sale of old office equipment, and actual investment

income and interest was $18,782.96.

2. Did not report Cash Payments totaling $37,320.62 from the CCFCU Declared Account that

went to pay off a personal loan in his name.

3. Did not report Cash Payment of $2,000 from the CCFCU Declared Account to a separate

personal account.

4. Did not report Cash Payments of $25,215.38 to Stanford Alumni Association, Bamboo

Travel, and American Express that he later stipulated were personal travel expenses for a

vacation to Asia.

5. Did not report Cash Payments of $5,830.12 in campaign expenses that he later reported on

an Amended Form 460 for this time period.


$20,019.61. The $20,019.61 under statement is less than the $77,987.84 in the prior period, mostly

because as he used unreported investment income to pay for vacations to Asia, and to repay a personal

loan at CCFCU.

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Written By: Ken Tam

Pg. 15 March 11, 2020


Per Form


Bank Statements




Cash Payments ($34,200.12) ($73,522.56)



of the FTB audit, Canciamilla: 1. Reported $18,661.73 in investment gains, which was very close to $18,749.43, the actual

amount of investment gains. 2. Did not report $33.53 in interest in the CCFCU Declared Account. 3. Reported Cash Payments of $25,215.38 to Stanford Alumni Association, Bamboo Travel, and

American Express as campaign expenses that he later stipulated were personal travel expenses for a vacation to Asia.

4. Did not report Cash Payments totaling $37,320.62 from the CCFCU Declared Account that

went to pay off a personal loan in his name.

5. Did not report Cash Payment of $2,000 from the CCFCU Declared Account to a separate

personal account.

In this period, the Amended Form 460 overstated the amount of cash in the campaign accounts

by $40,559.40. The overstatement was a result of Canciamilla almost accurately reporting the

investment income, but not reporting the cash payments to pay off a personal loan, and the cash

payment to a separate personal account.


Per Form


Bank Statements




Cash Payments ($34,200.12) ($73,522.56)


In this Amended Form 460, filed after the completion of the FTB audit, but prior to

commencement of the FPPC investigation, Canciamilla reported the same amounts as what he reported in the Amended Form 460 that he filed on 7/26/2016, with the only changes being the disclosure of more details of what the cash payments were used for. All of the inaccuracies in the Amended Form

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Written By: Ken Tam

Pg. 16 March 11, 2020

460 filed on 7/26/2016 that are detailed in the previous paragraph were also found in this Amended Form 460 that was filed on 5/1/2017.


Per Form


Bank Statements




Cash Payments ($34,200.12) ($73,522.56)


In this Amended Form 460, filed after Canciamilla’s Stipulation dated 11/21/2019, Canciamilla:

1. Lowered the Beginning Cash Balance to $229,158 from $275,158, in order to make the Ending Cash Balance be as close as possible to the actual cash balance. There was no explanation why the Beginning Cash Balance was lowered. The lowered Beginning Cash Balance allowed Canciamilla to have the Ending Cash Balance be close to the actual cash balance without disclosing Cash Payments of $37,320.62 from the CCFCU Declared Account that went to pay off a personal loan in his name, and without disclosing a Cash Payment of $2,000 from the CCFCU Declared Account to a separate personal account.

2. The Ending Cash Balance of $213,707 was lower than the actual Ending Cash Balance of $219,060 as $5,352.90 in the CCFCU Declared Account was not reported on the Amended Form 460.


Per Form


Bank Statements



Miscellaneous Increases to Cash $1,233.00 ($5,798.22)

Cash Payments ($38,751.00) ($39,612.15)


In this Form 460, Canciamilla: 1. Did not report Investment Losses and Interest of ($5,789.22).

2. Reported a Cash Payment of $5,900 as a campaign expense that he later stipulated was a

personal expense for a vacation that was later cancelled.

3. Did not report $920.16 in Cash Receipts from personal funds per his stipulation.

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Written By: Ken Tam

Pg. 17 March 11, 2020

4. Did not report Cash Payments totaling $707.84 from the CCFCU Declared Account, which

consisted of a $387.84 withdrawal from an ATM in Hong Kong for presumably personal

purposes, and a $320 transfer to a personal account.

5. Reported a Beginning Cash Balance of $207,119.61, which was inconsistent with an Ending

Cash Balance of $195,810.29 from the Prior Period, without any explanation.


$4,926.53. The $4,926.53 understatement is less than the $20,019.61 in the prior period, mostly

because unreported Investment Losses, and the inconsistent reporting of the Beginning Cash Balance.


Per Form


Bank Statements



Miscellaneous Increases to Cash ($5,554.38) ($5,798.22)

Cash Payments ($38,751.00) ($39,612.15)



of the FTB audit, Canciamilla: 1. Reported a Cash Payment of $5,900 as a campaign expense that he later stipulated was a

personal expense for a vacation that was later cancelled.


3. Did not report Cash Payments totaling $707.84 from the CCFCU Declared Account, which

consisted of a $387.84 withdrawal from an ATM in Hong Kong for presumably personal

purposes, and a $320 transfer to a personal account.


by $40,735.23. The overstatement was mainly a result of Canciamilla not reporting Cash Payments

totaling $37,320.62 from the CCFCU Declared Account that went to pay off a personal loan in his name,

and Cash Payment of $2,000 from the CCFCU Declared Account to a separate personal account. Both of

those transactions occurred in the 7/1/2014 – 12/31/2014 time frame, and were not reported on the

Amended Form 460 for the time period 7/1/2014 – 12/2/2014 that was filed on 7/26/16. Those errors

were carried into this Amended Form 460 for the time period 1/1/2015 – 6/30/2015 that was filed on

7/26/16.

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Written By: Ken Tam

Pg. 18 March 11, 2020


Per Form


Bank Statements




Cash Payments ($38,904.31) ($39,612.15)



commencement of the FPPC investigation, Canciamilla reported amounts very similar to what he reported in the Amended Form 460 that he filed on 7/26/2016. All of the inaccuracies in the Amended Form 460 filed on 7/26/2016 that are detailed in the previous paragraph were also found in this Amended Form 460 that was filed on 5/1/2017.


Per Form


Bank Statements




Cash Payments ($38,904.31) ($39,612.15)


In this Amended Form 460, filed in conjunction with Canciamilla’s Stipulation dated 11/21/2019, Canciamilla:

1. Lowered the Beginning Cash Balance to $213,707 from $257,707, in order to make the Ending Cash Balance be as close as possible to the actual cash balance. There was no explanation why the Beginning Cash Balance was lowered. The lowered Beginning Cash Balance allowed Canciamilla to have the Ending Cash Balance be close to the actual cash balance without disclosing Cash Payments of $37,320.62 from the CCFCU Declared Account that went to pay off a personal loan in his name, without disclosing a Cash Payment of $2,000 from the CCFCU Declared Account to a separate personal account. The two non-disclosed Cash Payments occurred in the 7/1/2014 to 12/31/2014 time frame.

2. The Ending Cash Balance of $169,057 was lower than the actual Ending Cash Balance of $174,579 as $5,573.12 in the CCFCU Declared Account was not reported on the Amended Form 460.


4. Did not report Cash Payments totaling $707.84 from the CCFCU Declared Account, which consisted of a $387.84 withdrawal from an ATM in Hong Kong for presumably personal purposes, and a $320 transfer to a personal account.

_________________________________________________________________________________________________________

Written By: Ken Tam

Pg. 19 March 11, 2020


Per Form


Bank Statements




Cash Payments ($1,225.00) ($360.00)


Canciamilla did not file a semi-annual Form 460 for the time period 7/1/15 to 12/31/15. Canciamilla did file an Amended Form 460 for the time period 7/1/15 to 12/31/15 on 7/26/15. This filing occurred after notification of the FTB audit, but prior to the completion of the FTB audit. In this Amended Form 460, Canciamilla:

1. Did not report Investment Gains and interest of $148.09. 2. Listed an unspecified Cash Payment of $1,225.00 which did not occur per the bank statements. 3. Did not report Cash Payments of $360 for campaign expenses which he reported on a later

Amended Form 460. 4. Did not report Cash Receipts of $14,111.54 of presumably personal funds. Of the $14,111.54,

Canciamilla’s attorney, Andreas Rockas, in Response No. 6 dated 3/6/19, wrote that $13,811.54 was a transfer of funds from Canciamilla to the Schwab Clerk Account. This implied the $13,811.54 was an unreported contribution of personal funds to Canciamilla’s own campaign account. The FPPC investigation speculated the $13,811.54 was personal reimbursement for the $13,700 in unreported personal expenses that Canciamilla paid from his campaign accounts in 5/2011 to 6/2011.


by $25,616.64. This overstatement is less than the $40,559.40 overstatement in the prior period, primarily due to contribution of personal funds that helped make up the shortfall between the cash balance as reported on the Form 460 and the actual bank balance.


Per Form


Bank Statements




Cash Payments ($360.00) ($360.00)


_________________________________________________________________________________________________________

Written By: Ken Tam

Pg. 20 March 11, 2020

In this Amended Form 460, filed after the completion of the FTB audit, but prior to commencement of the FPPC investigation, Canciamilla:

1. Did not report Investment Gains and interest of $208.45. 2. Did not report Cash Receipts of $14,111.54 of presumably personal funds. Of the

$14,111.54, Canciamilla’s attorney, Andreas Rockas, in Response No. 6 dated 3/6/19, wrote that $13,811.54 was a transfer of funds from Canciamilla to the Schwab Clerk Account. This implied the $13,811.54 was an unreported contribution of personal funds to Canciamilla’s own campaign account. The FPPC investigation speculated the $13,811.54 was personal reimbursement for the $13,700 in unreported personal expenses that Canciamilla paid from his campaign accounts in 5/2011 to 6/2011.

In this period, the Amended Form 460 overstated the amount of cash in the campaign accounts by $26,167.25. This overstatement is less than the $40,487.24 overstatement in the prior period, primarily due to contribution of personal funds that helped make up the shortfall between the cash balance as reported on the Form 460 and the actual bank balance.


Per Form


Bank Statements




Cash Payments ($360.00) ($360.00)


In this Amended Form 460, filed in conjunction with Canciamilla’s Stipulation dated 11/21/2019, Canciamilla attempted as best as possible to make the reported amounts match the actual amounts per the bank balances. Canciamilla:

1. Lowered the Beginning Cash Balance to $169,057.38 from $215,057, in order to make the Ending Cash Balance be as close as possible to the actual cash balance. There was no explanation why the Beginning Cash Balance was lowered. The lowered Beginning Cash Balance allowed Canciamilla to have the Ending Cash Balance be close to the actual cash balance without disclosing Cash Payments of $37,320.62 from the CCFCU Declared Account that went to pay off a personal loan in his name, without disclosing a Cash Payment of $2,000 from the CCFCU Declared Account to a separate personal account. The two non-disclosed Cash Payments occurred in the 7/1/2014 to 12/31/2014 time frame.

The $305 difference between the Amended Form 460 and the actual bank balance is due to an

unreported $305 in the CCFCU Declared Account. The CCFCU Declared Account is no longer a Campaign account as of 10/7/2015. The $305 balance in the CCFCU account will be dropped off in future Form 460s.

_________________________________________________________________________________________________________

Written By: Ken Tam

Pg. 21 March 11, 2020


Per Form


Bank Statements




Cash Payments ($34,812.04) ($34,812.04)


In this Form 460, filed after notification of the FTB audit, but prior to the completion of the FTB audit, Canciamilla reports Cash Receipts, Miscellaneous Increases to Cash, and Cash Payments very similar to the actual amounts per the bank records. In this period, the Form 460 overstated the amount of cash in the campaign accounts by $25,916.92. The overstatement was mainly a result of Canciamilla not reporting Cash Payments totaling $37,320.62 from the CCFCU Declared Account that went to pay off a personal loan in his name, and Cash Payment of $2,000 from the CCFCU Declared Account to a separate personal account. Both of those transactions occurred in the 7/1/2014 – 12/31/2014 time frame, and were not reported on the Amended Form 460 for the time period 7/1/2014 – 12/2/2014 that was filed on 7/26/16. Those errors were carried into this Form 460. The overstatement is less the unreported payments because Canciamilla had partially reimbursed the shortfall with $14,111.54 in personal contribution in the 7/1/15 – 12/31/15 time period.


Per Form


Bank Statements




Cash Payments ($34,812.04) ($34,812.04)



commencement of the FPPC investigation, Canciamilla reported very similar amounts to the amounts reported in the Form 460 filed on 7/26/2016.

This Amended Form 460 overstated the amount of cash in the campaign accounts by

$26,472.25. The overstatement was mainly a result of Canciamilla not reporting Cash Payments totaling $37,320.62 from the CCFCU Declared Account that went to pay off a personal loan in his name, and Cash Payment of $2,000 from the CCFCU Declared Account to a separate personal account. Both of those

_________________________________________________________________________________________________________

Written By: Ken Tam

Pg. 22 March 11, 2020

transactions occurred in the 7/1/2014 – 12/31/2014 time frame, and were not reported on the Amended Form 460 for the time period 7/1/2014 – 12/2/2014 that was filed on 7/26/16. Those errors were carried into this Amended Form 460. The overstatement is less the unreported payments because Canciamilla had partially reimbursed the shortfall with $14,111.54 in personal contribution in the 7/1/15 – 12/31/15 time period.


Per Form


Bank Statements




Cash Payments ($34,812.04) ($34,812.04)


In this Amended Form 460, filed in conjunction with Canciamilla’s Stipulation dated 11/21/2019,

Canciamilla reported the same amounts as per the actual bank records. Canciamilla was able to make the amounts match by “forcing” the Beginning Cash Balance to be $189,116.86, without disclosing the Cash Payments totaling $37,320.62 from the CCFCU Declared Account that went to pay off a personal loan in his name, and Cash Payment of $2,000 from the CCFCU Declared Account to a separate personal account that occurred in the 7/1/2014 – 12/31/2014.


Per Form


Bank Statements




Cash Payments ($32,641.50) ($32,641.50)


In this Form 460, filed after completion of the FTB audit, but prior to the completion of the FPPC investigation, Canciamilla:

1. Did not report a Cash Receipt of $22,309.88 of presumably personal funds. 2. Reported $13,081.17 in Investment Losses when actual Investment Losses were $12,032.48.

In this period, the Form 460 understated the amount of cash in the campaign account by

$2,558.32. The Form 460 in the prior period overstated the amount of cash in the campaign account by $25,916.92. Canciamilla’s undeclared cash contribution of $22,309.88 made up most of the shortfall.

_________________________________________________________________________________________________________

Written By: Ken Tam

Pg. 23 March 11, 2020


Per Form


Bank Statements




Cash Payments ($32,641.50) ($32,641.50)



commencement of the FPPC investigation, Canciamilla reported amounts for Miscellaneous Increases to Cash and Cash Payments that matched the actual bank records. Canciamilla did not report a Cash Receipt of $22,309.88 of presumably personal funds.

The Cash Receipt of $22,309.88 helped make up the shortfall between the amount of cash

reported on the prior period’s Form 460 and the actual amount cash in the campaign account.


Per Form


Bank Statements


Cash Receipts $22,309.88 $22,309.88


Cash Payments ($32,641.50) ($32,641.50)


In this Amended Form 460, filed in conjunction with Canciamilla’s Stipulation dated 11/21/2019,

Canciamilla reported the same amounts as per the actual bank records

_________________________________________________________________________________________________________

Written By: Ken Tam

Pg. 24 March 11, 2020

List of Personal Expenditures The analysis identified numerous personal expenditures from Canciamilla’s campaign accounts. The expenditures are listed in the table below:

Date Payee Amount Spent Notes

08/02/10 ViSA - Southwest Air ($313.40)

08/02/10 ViSA - Southwest Air ($313.40)

08/04/10 VISA - Priceline ($62.04)

09/02/10 Visa - Save Mt. Diablo ($530.00)

03/31/11 YBCA Dreamhouse Raffle ($300.00)

04/26/11 Bar Americain ($368.56)

04/29/11 Palm Restaurant ($360.60)

05/27/11 Wire Out ($9,300.00) Count 1 in Stipulation as personal expense

06/02/11 CK #106 - ??? ($4,400.00) Count 2 in Stipulation as personal expense

06/27/11 Wire Out - To Canciamilla CCFCU 39724-11 ($70,000.00) Count 3 in Stipulation as personal expense

06/27/11 Transfer to 39724-90 ($70,000.00)

Response #6 dated 3/6/19 said funds in -90 were

all commingled

06/28/11 Transfer to 39724-11 ($520.00)

09/22/11 Dreamhouse Raffle ($300.00)

09/25/11 American Airlines ($379.40)

09/25/11 American Airlines ($380.60)

07/05/11 Transfer to 39724-11 ($34.17)

08/05/11 Transfer to 39724-11 ($610.00)

09/30/11 Transfer to 39724-11 ($1,000.00)

02/19/13 Transfer to 39724-90 ($935.67)

06/04/14 ??? ($20,000.00)

06/13/14 Wire Out - Odyssey Travel Travel to Asia ($10,649.00) Count 11-15 in Stipulation as personal expense

05/31/14 Let's Fly Cheaper - Am Ex payment ($9,845.38)

FPPC determined this to be a personal vacation

to Asia

08/17/14 CK #20116 - Stanford Alumni Association ($11,390.00) Count 11-15 in Stipulation as personal expense

09/05/14 CK #117 - Stanford Alumni Association ($2,500.00) Count 11-15 in Stipulation as personal expense

12/09/14 CK #120 - Bamboo Travel ($1,480.00) Count 11-15 in Stipulation as personal expense

09/16/14 To Loan 63 ($1,000.00)

10/24/14 To Loan 63 ($36,320.62)

12/02/14 Transfer to 39724-11 ($2,000.00)

01/24/15 ATM - Hong Kong ($320.00)

05/13/15 Transfer to 39724-11 ($287.84)

06/15/15 Wire Out - Let's Fly Cheaper ($5,900.00) Count 16 in Stipulation as personal expense

Total ($261,800.68)

Personal Expenditures from Schwab Judge, Schwab Clerk, and CCFCU Declared Accounts

_________________________________________________________________________________________________________

Written By: Ken Tam

Pg. 25 March 11, 2020

List of Personal Contributions The analysis identified numerous personal contributions to Canciamilla’s campaign accounts. The table contributions are listed in the table below:

Date Payee Amount In Notes

06/27/11 Beginning Balance in CCFCU Declared account$6,633.00

Contribution of personal funds per Response

#6 dated 3/6/19

06/27/11 From Loan CCFCU 39724-63 $65,000.00

06/27/11 From CCFCU 39724-11 $65,000.00

12/14/12 Dep ??? $2,866.00

01/24/13 Personal checks to Joe Canciamilla $968.67


#6 dated 3/6/19

02/19/13 Coin Machine $935.67

08/19/13 Dep ??? $1,092.50

06/12/14 Dep ??? $20,000.00

11/17/14 Bank of America $0.83

11/17/14 Bank of America $0.99

02/23/15 Personal checks to Joe Canciamilla $185.25


#6 dated 3/6/19

03/18/15 Personal check to Joe Canciamilla $487.36


#6 dated 3/6/19

05/05/15 Dep ??? $152.95 Unknown per Response #6 dated 3/6/2019

05/19/15 Personal check to Joe Canciamilla $94.60


#6 dated 3/6/19

10/19/15 Dep ??? $14,111.54

Contribution of $13,811.54 acknowledged as

personal funds per Response #6 dated 3/6/19

07/20/16 Dep ??? $22,309.88

Total $199,839.24

Personal Contributions Into Schwab Judge, Schwab Clerk, and CCFCU Declared Accounts

_________________________________________________________________________________________________________

Written By: Ken Tam

Pg. 26 March 11, 2020

VI. SUMMARY The analysis of the examined items found Canciamilla to have made material misstatements in Filed Form 460s and Filed Amended Form 460s, that cover the time period 1/1/2010 through 12/30/2016. The Filed Form 460s and Filed Amended Form 460s were filed on dates between 7/27/2010 through 5/1/2017. The misstatements revolve mainly around Canciamilla not reporting Investment Gains in a Campaign bank account that traded stocks. Canciamilla spent some of those Investment Gains on personal expenditures that either were not reported, or were reported as campaign expenses that he later stipulated were personal in nature. Some of the personal expenditures included vacations to Asia, and to repay a personal loan at CCFCU. Canciamilla actually spent more on personal expenditures than the unreported Investment Gains, and had to make contribution of personal funds to make up the difference. END OF REPORT

Documents

FORENSIC ACCOUNTANT’S REPORT