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Civil Appellate Law

Civil Trial Law

COURTS OF ADMITTANCE

Federal: Fifth Circuit Court of Appeals District of Columbia Circuit Court of Appeals Texas Eastern District Court Texas Northern District Court Texas Southern District/Bankruptcy Court Texas Western District Court

Other Courts: None Reported By Attorney

MR. PAUL TALMAGE 'TALMAGE' BOSTON JR. Eligible to Practice in Texas

SHACKELFORD BOWEN MCKINLEY & NORTON, LLP

Bar Card Number: 02681800 TX License Date: 11/06/1978

Primary Practice Location: Dallas , Texas

9201 N Central Expy Fl 4 Dallas, TX 75231-6033

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Statutory Pro�le Last Certi�ed On: 08/02/2016

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CONTACT INFORMATION

Tel: 214-780-1310

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EXHIBIT "G"

CFOpros 14445 Webb Chape l Da l las , Texas 75234 972-931-0173 972-931-0176 fax

c fop ros .com

May 17, 2002

Mr. Richard Tettamant Administrator Dallas Police & Fire Pension System 2301 North Akard Street, Suite 200 Dallas, Texas 75201

RE: Fraud Examination - Interim Report

Dear Mr. Tettamant:

The purpose of this document is to provide an interim report of issues and concerns noted during our fraud examination of the Dallas Police & Fire Pension System (the System). This report and its contents are intended solely for use by the System’s Management and its Board of Trustees. This report and its contents are not intended for general circulation or publication, nor should it be reproduced for any purpose other than as outlined above. We do not assume any responsibility or liability for losses occasioned to one or others as a result of the circulation, publication, reproduction or use of our report contrary to the conditions of this paragraph. The validity of our report is predicated on the extent to which full, honest and complete disclosure was made by all parties.

Fraud Examination

We were retained to perform a fraud examination concerning the possible conversion and illegal use of the System’s assets. In conducting our investigation, we employed the use of lawful fraud examination techniques, to include the inspection of books and records, voluntary interviews of appropriate personnel, and other such evidence gathering procedures as necessary under the circumstances.

Al legations Regarding Ms. Anderson

During our investigation, we found sufficient evidence to support the conclusion that Ms. Tara D. Anderson illegally converted System assets. As a result of our recently negotiated Agreement between the System and Ms. Anderson, she has agreed to voluntarily plead guilty to theft, and to provide her full cooperation in our ongoing investigation.

Separately, during preliminary discussions with Ms. Anderson and her attorney, Marcus Norman, Ms. Anderson stated that she committed her illegal acts in concert with two (2) other System employees. Ms. Anderson also stated that others were aware of her illegal activities, and that as many as three (3) additional System employees may have constructively participated with her in defrauding the System. Accordingly, we recommend that no fewer than two (2) interviews be conducted with Ms. Anderson at this time for the purpose of determining the nature and content of her allegations as well as the potential value of her information.

EXHIBIT "G"

Dallas Police & Fire Pension System Page 2 May 17, 2002

Accounts Payable

Since January 1, 2000, the System has issued over 2,350 checks totaling more than 7.3 million dollars through its accounts payable function. During our examination, we determined that the System’s accounts payable check register contained numerous errors, incomplete postings, and a wealth of omissions. We also determined that a substantial number of payments made through accounts payable lacked proper authorized or documentation to support the disbursement.

Based upon illegal activities confirmed within accounts payable and allegations regarding collusion, we recommend that additional procedures be employed to include a review of vendor contracts and the use of third-party confirmations. Further, in view of the inherit weaknesses in the System’s internal accounting controls, we recommend broadening our examination of the System’s accounting practices to include cash receipts.

Documents & Records

It was recently determined that documents and records previously archived and believed stored at a secure offsite location, are now missing. Specifically, it appears that a substantial number of accounts payable documents (to include cancelled checks for 1999), have been stolen or destroyed. Based upon illegal activities confirmed, as well as allegations regarding collusion, we recommend that an immediate audit of the System’s offsite storage facility be conducted for the purpose of determining the full range and scope of document destruction and/or theft.

Ethics and Other Issues

During our engagement, we determined that members of the System’s management team were systematically procuring the personal and confidential bank records of other System employees without the use of a subpoena and without the employee’s expressed written consent. On May 1, 2001, we met with the System’s outside legal counsel for the purpose of discussing this and other legal matters. While we understand that this practice has now been discontinued, it does not appear that the matter was reported to the proper authorities nor does it appear that the System employees responsible for the authorization and seemingly illegal procurement of confidential bank records have been reprimanded or otherwise disciplined.

In addition, we were previously instructed by a senior member of the System’s management team to restrict our reporting to matters specifically related to the allegations regarding Ms. Anderson, and that other matters noted during our investigation be reported separately and to the exclusion of the System’s Board of Trustees. In the interest of full and complete disclosure, we previously recommended that the Board of Trustees establish a management oversight committee, and that we be allowed access to members of the Board’s committee as needed during the course of our investigation. Respectfully, we again repeat this recommendation.

Sincerely,

Columbus A. Alexander, III, CPA Certified Fraud Examiner

cc: Board of Trustees

EXHIBIT "G"

Dallas Police & Fire Pension System May 17, 2002

Board of Trustees

Lt. Gerald Brown Chairman, Board of Trustees Dallas Police & Fire Pension System 2301 North Akard Street, Suite 200 Dallas, Texas 75201

Sgt. Steve Shaw Vice Chairman, Board of Trustees Dallas Police & Fire Pension System c/o Dallas Police Department Northeast Operations Division 9915 E. Northwest Highway Dallas, Texas 75238

Mr. Gary Edge Deputy Vice Chairman, Board of Trustees Dallas Police & Fire Pension System 2301 North Akard Street, Suite 200 Dallas, Texas 75201

Sgt. Rector C. McCollum Member, Board of Trustees Dallas Police & Fire Pension System c/o Dallas Police Department Northeast Operations Division 9915 E. Northwest Highway Dallas, Texas 75238

Captain George Tomasovic Member, Board of Trustees Dallas Police & Fire Pension System 2301 North Akard Street, Suite 200 Dallas, Texas 75201

Page 3

Sgt. Steven H. Umlor Member, Board of Trustees Dallas Police & Fire Pension System c/o Dallas Police Department Southeast Operations Division 725 N. Jim Miller Road Dallas, Texas 75217 Mr. John Mays Member, Board of Trustees Dallas Police & Fire Pension System P.O. Box 251 Kaufman, Texas 75142

Mr. Richard Wachsman Member, Board of Trustees Dallas Police & Fire Pension System 3172 Timberview Dallas, Texas 75229

Mr. Leo V. Chaney, Jr. Member, Board of Trustees Dallas Police & Fire Pension System c/o Dallas City Hall 1500 Marilla Street, Room 5FN Dallas, Texas 75201-6390

Mayor Pro Tem Donald W. Hill Member, Board of Trustees Dallas Police & Fire Pension System c/o Dallas City Hall 1500 Marilla Street, Room 5EN Dallas, Texas 75201-6390

Dr. Maxine Thorton-Reese Member, Board of Trustees Dallas Police & Fire Pension System c/o Dallas City Hall 1500 Marilla Street, Room 5FN Dallas, Texas 75201-6390

EXHIBIT "I"

CITYCITY OFOF DALLASDALLAS

LEOLEO V.V. CHANEY.CHANEY. JR.JR. Councilman·Councilman· DislrlciDislrlci 77

MayMay 21,21, 20022002

..Mr.Mr. RichardRichard L.L. TettamantTettamant AdministratorAdministrator DallasDallas PolicePolice && FireFire PensionPension BoardBoard 23012301 N.N. AkardAkard Street,Street, SuiteSuite 200200 Dallas,Dallas, TXTX 7520175201

DearDear Mr.Mr. Tettamant,Tettamant,

ItIt isis withwith regretregret thatthat II resignresign mymy positionposition asas aa membermember ofof thethe BoardBoard ofofTrusteesTrustees ofof thethe DallasDallas PolicePolice andand FireFire PensionPension Board.Board.

PerPer aa conversationconversation withwith thethe CityCity Attorney,Attorney, II believebelieve therethere willwill bebe issuesissues comingcoming upup thatthat asas aa membermember ofof thethe CityCity Council,Council, couldcould causecause aa conflictconflict ofof interestinterest andand II amam afraidafraid therethere wouldwould bebe tootoo manymany timestimes II couldcould notnot votevote onon anan issue.issue.

Sincerely,Sincerely,

41/·&~~~·41/·&~~~· LeoLeo V.V. Chaney,Chaney, Jr.Jr. CityCity CouncilmemberCouncilmember

·Dallas.·Dallas. TheThe CilYCilY ThaiThai Works:Works: Diverse.Diverse. VibrantVibrant andand Progrossivo'Progrossivo' OFFICEOFFICE OFTHEOFTHE CITYCITY COUNCILCOUNCIL CITYCITY HALLHALL DALLAS.DALLAS. TeXASTeXAS 7520175201 TELEPHONETELEPHONE 214·67().4689214·67().4689 FAXFAX 214.67().1819214.67().1819

email:email: IchaneyOcl.dallas.lX.usIchaneyOcl.dallas.lX.us

EXHIBIT "J"

•� •

«be«be ~alla%~alla% morningmorning ~elU%~elU% Wednesday,Wednesday, May May 22, 22, 2002 2002DallasNews.comDallasNews.com IIII Page31APage31A

Audit:Audit: $20,000 $20,000nnsslngrmssmg • • ••

Police-fire Police-fire pension pensionboardboard firesfires examiner,examiner,

disputesdisputes somesome assertionsassertions ByBy DAVEDAVE MICHAELS� MICHAELS

StaffStaff WriterWriter�

AnAn employeeemployee of of Dallas' Dallas' police policeandand firefire pensionpension systemsystem embezzledembezzled nearlynearly $20,000$20,000 fromfrom itsits operatingoperating budget, budget, and and the the fund fund has has lost lost a a sig­sig­nificant nificant number number ofof itsits recordsrecords toto thefttheft or or shredding, shredding, according according to to an anauditaudit obtainedobtained byby TheThe DallasDallas MorningNews.MorningNews.

TheThe pensionpension system'ssystem's boardboard of oftrustees trustees said said Tuesday Tuesday that that the the em­em­ployee ployee has has been been terminated.terminated. TheThe audit audit says says ....she she agreed agreed to to plead pleadguilty guilty to to theft theft charges. charges.

The The woman woman is is not not being being named namedbecause because she she has has not not been been arrested arrestedor or charged charged with with a a crime. crime.

The The suspect's suspect's attorney, attorney, Marcus MarcusNormanNorman of of Dallas,Dallas, declineddeclined toto comment comment aboutabout thethe case.case. HeHe con­con­firmedfirmed thatthat hishis clientclient waswas terminat­terminat­eded butbut hashas notnot beenbeen arrested. arrested.

She She was was cashing cashing checks checks from fromthethe pensionpension system'ssystem'spetty-cashpetty-cash ac­ac­countcount andand buyingbuying personalpersonal itemsitems

SeeSee AUDITORAUDITOR PagePage35.4 35.4

EXHIBIT "J"

Auditor:Auditor: $20,000$20,000� stolenstolen fromfrom fundfund�

ContinuedfromContinuedfrom PagePage31A 31A thethe allegationsallegations aboutabout employeeemployee theft.theft. Mr.Mr.AlexanderAlexander alsoalsowrotewrote thatthat

withwith pensionpension systemsystem funds,'funds,' trust­trust­ thethe seniorsenior manager manager urged urged him him not noteesees said.said. to to report report otherother problemsproblems toto trust-trust- . .

TheThe moneymoney waswas stolenstolen overover thethe ees. ees.coursecourse ofof aa yearyear andand aa halfhalf oror twotwo Mr.Mr. Alexander'sAlexander's reportreport statedstated years,years, saidsaid StevenSteven Shaw, Shaw, a a Dallas Dallas thatthat thethe suspectsuspect saidsaid sheshe had had twotwo policepolice sergeantsergeant whowho isis thethe vicevice accomplicesaccomplices andand thatthat severalseveralothersothers chairmanchairman ofof thethe board.board. "Most"Most ofof itit "were"wereawareaware ofherofher illegalillegalactivities."activities." happenedhappened inin thethe severalseveral monthsmonths "Accordingly,"Accordingly, wewe recommendrecommend priorprior toto usus detectingdetecting it.it.It It seemed seemed to to thatthat no no fewerfewer than than two two interviews interviewsescalateescalate as as they they [police] [police] gotgot nearernearer be be conducted conducted with with ... ... [the[the suspect] suspect]to to herher detection detection andand apprehen­apprehen­ atat thisthis timetime forfor thethe purpose purpose ofofdeter­deter­sion."sion." miningmining the the nature nature and and content content ofof

TheThe pensionpension fundfund hashas aboutabout herher allegations,"allegations," Mr. Mr. AlexanderAlexander $1.9$1.9 billionbillion inin assets,assets, officialsofficials said,said, wrote.wrote. so so thethe lossloss waswas notnot expectedexpected to to af­af­ AmongAmong thethe report'sreport's otherother find­find­fectfect any any pensioners. pensioners. ings:ings:

Sgt. Sgt. Shaw Shaw saidsaid thethe casecase is is being being •• TheThe system'ssystem's accounts-pay­accounts-pay­investigatedinvestigated by by thethe Police Police Depart­Depart­ ableable rollsrolls containedcontained "numerous"numerous er­er­ment's ment's general general assignments assignments sec­sec­ rors,rors, incompleteincomplete postingspostings andand aa tion, tion, which which handles handles white-collar white-collar wealthwealth ofofomissions."omissions." crime.crime. .•.• ArchivedArchived records records about about ac­ac­

Pension Pension systemsystem administratorsadministrators counts counts payable payable that that were were stored stored at atnoticednoticed thethe fraudulentfraudulent checkschecks inin an an off-site off-site locationlocation are are missingmissing ­­MarchMarch andand immediatelyimmediately referredreferred possiblypossiblystolenstolen oror destroyed.destroyed. thethe casecase toto thethe PolicePolice Department,Department, •• MembersMembers ofof thethe system'ssystem's theythey said.said. TheyThey alsoalso hiredhired anan out­out­ managementmanagement teamteam werewere "systemat­"systemat­sideside auditor,auditor, thethe forensicforensic account­account­ icallyically procuring" procuring" the the personal personal bank banking ing firm firm CFOpros, CFOpros, to to inspect inspect the the records records ofofemployees. employees.overalloverall securitysecurity ofoftheirtheir system. system. Sgt. Sgt. Shaw Shaw disputed disputed manymany of of

TheThe auditor,auditor, ColumbusColumbus Alexan­Alexan­ those those assertions. assertions. He He said said he he does doesderder III, III, wrotewrote inin hishis reportreport thatthat thethe not not know know what what the the Police Police Depart­Depart­pensionpension system system is is so so riddled riddled with with ment's ment's investigationinvestigation found.found. accounting accounting and and record-keeping record-keeping DetectivesDetectives werewere unavailableunavailable problems problems that that thethe boardboard shouldshould TuesdayTuesdayforfor comment.comment. create create a a management management oversight oversight 'We'We havehave absolutelyabsolutelynono evidenceevidence committee.committee. thatthat anyany otherother employeeemployee is is involved involved

Mr. Mr. Alexander,Alexander, whose whose reportreport inin this,"this," Sgt.Sgt. ShawShaw said.said. "It "It isis typical typicalwas was received received by by trustees trustees Monday, Monday, when when someone someone is is confronted confronted with with a adiddid notnot returnreturn a a phone phone callcall TuesdayTuesday criminal criminal allegation allegation that that they they trytry to toseekingseeking comment.comment. blameblame otherother people."people."

PensionPension system system trusteestrustees voted voted Sgt.Sgt. ShawShaw saidsaid thethe pensionpension sys­sys­TuesdayTuesday toto terminate terminate Mr.Mr. Alexan­Alexan­ temtem hashas beenbeen reimbursedreimbursed aboutabout

•• der'sder's contract,contract, sayingsaying hehe mademade $9,000$9,000 ofof itsits losseslossesbybybanksbanks where wherewide-rangingwide-ranging allegationsallegations about about the the suspect suspect cashed cashed checks. checks.fraudfraud and and abuse abuse but but declined declined to to Trustees Trustees replaced replaced Mr. Mr. Alexan­Alexan­disclosedisclose evidenceevidence toto supportsupport hishis derder withwith thethe accountingaccounting firmfirm conclusions.conclusions. KPMG,KPMG, whichwhich theythey hopehope will will pro­pro­

Mr.Mr. AlexanderAlexander wrotewrote thatthat aa "se­"se­ videvide themthem withwith aa newnew report report withinwithin niornior membermember ofof thethe system'ssystem's man­man­ threethree weeks.weeks. agementagement team"team" discourageddiscouraged himhim fromfrom extendingextending hishis auditaudit beyondbeyond E-mailE-mail dmichaels@dallasnews.comdmichaels@dallasnews.com

Demand Letter Points - Discussion Draft June 3, 2002

1. Damages – a monetary settlement for damages; amount to be determined pursuant to

discussion with legal counsel.

2. Legal Expenses – reimbursement of all legal expenses related to this matter.

3. Letter of Retraction/Apology – issued by the Dallas Police & Fire Pension System (the

Pension System) and its Board of Trustees regarding their false statements published by

the Dallas Morning News and republished by the Association of Certified Fraud Examiners

with copies to the Dallas Morning News, the Association of Certified Fraud Examiners, the

High Technology Crime Investigation Association, and each of the individual employees

and Trustees of the Pension System.

4. Kathleen Atwood – Written confirmation by the Pension System and its Board of Trustees

that relations with Ms. Atwood have been severed.

5. Don Rohan – the Pension System agrees to terminate Mr. Rohan’s employment.

6. Richard Tettamant – Mr. Tettamant agrees to resign from the City of Dallas 401 (k) Board

of Trustees, and further agrees not to seek reappointment.

7. Lawson, Fields, McCue, Lee & Campbell P.C. – the Board of Trustees agree to no

longer employ the services of Mr. Gary Lawson or other individual members of his firm.

8. Board of Trustees – the Board agrees to adopt a resolution that is permanent and binding

on the eight (8) elected Members of its Board, preventing each from seeking re-election

upon completion of their current term with the Pension System Board of Trustees.

9. Board of Trustees – the Board further agrees to adopt a resolution requiring that at least

one (1) of the three (3) appointed Board Members from the Dallas City Council be in

attendance in order for the Board to convene.

CFOpros 14445 Webb Chape l Da l las , Texas 75234 972-931-0173 972-931-0176 fax

c fop ros .com

EXHIBIT "O"

JulyJuly 24,24, 20022002 directdirect dial:dial: 214n4S.S462214n4S.S462

tboston@winstead.comtboston@winstead.com

VIAVIA FACSIMILEFACSIMILE -- (972)(972) 490-9545490-9545

EricEric G. G. Calhoun,Calhoun, Esq.Esq. Lawson,Lawson, Fields,Fields, McCue,McCue, LeeLee && Campbell,Campbell, P.C.P.C. 14135 14135 Midway Midway Road, Road, Suite Suite 250 250Addison, Addison, TX TX 75001 75001

Re: Re: DallasDallas PolicePolice andand FireFire PensionPension SystemSystem v. v. Columbus Columbus A. A. Alexander, Alexander, IIIIII a/k/aa/k/a SandySandy AlexanderAlexander d/b/ad/b/a CFOpros;CFOpros; CauseCause No.No. 02-04814; 02-04814; In In thethe 4444tthh JudicialJudicial DistrictDistrict CourtCourt ofof DallasDallas County,County, TexasTexas

DearDear Eric:Eric:

II amam inin receiptreceipt ofof youryour faxfax ofof youryour unsignedunsigned "DRAFT""DRAFT" letterletter toto meme dateddated JulyJuly 24, 24, 2002, 2002,and and have have discussed discussed it it with with my my client. client. Our Our short short response response is is that that your your counteroffer counteroffer is isunacceptable. unacceptable. I I refer refer you you to to my my letter letter to to Gary Gary Lawson Lawson yesterday yesterday which which spells spells out out terms terms byby whichwhich Mr.Mr. AlexanderAlexander wouldwould bebe willingwilling toto settlesettle andand thosethose termsterms standstand untiluntil 5:005:00 p.m.p.m. DallasDallas time,time, Friday,Friday, JulyJuly 26,26, 2002.2002. IfIf thethe PensionPension SystemSystem hashas notnot agreedagreed toto thosethose termsterms byby thatthat time,time, thenthen ourour AnswerAnswer andand CounterclaimCounterclaim willwill bebe filedfiled Monday,Monday, JulyJuly 29,2002,29,2002, beforebefore 10:0010:00 a.m.a.m.

AsAs anan aside,aside, Mr.Mr. AlexanderAlexander isis notnot opposedopposed toto ParagraphsParagraphs 22 andand 55 ofof youryour "DRAFT""DRAFT" letterletter inin thatthat theythey areare consistentconsistent withwith mymy 7/23/027/23/02 letterletter toto GaryGary LawsonLawson andand withwith thethe ConsultantConsultant ContractContract mymy clientclient signedsigned regardingregarding thethe maintainingmaintaining ofof thethe confidentialityconfidentiality ofof thethe informationinformation hehe obtainedobtained andand allall conclusionsconclusions hehe derived.derived.

RegardingRegarding youryour commentscomments onon p.p. 22 ofof youryour "DRAFT""DRAFT" letter,letter, apparently,apparently, youyou andand youryour clientclient areare notnot awareaware ofof thethe pertinentpertinent provisionsprovisions inin thethe CodeCode ofof ProfessionalProfessional EthicsEthics ofof thethe AssociationAssociation ofof CertifiedCertified FraudFraud Examiners.Examiners. InIn particular,particular, II encloseenclose aa copycopy ofofp.p. 4.9204.920 ofof thethe CodeCode ofofEthics.Ethics. InIn thethe bottombottom paragraph,paragraph, youyou shouldshould notenote thethe followingfollowing language:language:

"In"In general,general, examinersexaminers areare notnot legally legally obligatedobligated toto blowblow the the whistle whistle on on clients clients or oremployers. employers. However, However, circumstances circumstances might might exist exist where where they they are are morally morally and andlegally legally justified justified in in making making disclosure disclosure to to appropriate appropriate outside outside parties. parties. Such Suchcircumstances circumstances include include those those in in which which a a client client or or employeremployer hashas intentionallyintentionally involvedinvolved aa CertifiedCertified FraudFraud ExaminerExaminer inin itsits illegalillegal oror unethicalunethical conduct,conduct, oror when when a aclient client oror employeremployer hashas distributeddistributed misleadingmisleading reportsreports basedbased onon thethe CertifiedCertified FraudFraud Examiner'sExaminer's work.work. TheThe confidentialityconfidentiality rulerule shouldshould notnot bebe viewedviewed asas aa licenselicense oror excuseexcuse forfor inactioninaction wherewhere actionaction maymay bebe appropriateappropriate toto rightright aa wrongfulwrongful actact committedcommitted oror aboutabout toto bebe committedcommitted byby aa clientclient oror employer."employer."

54005400 RENAISSANCERENAISSANCE TOWERTOWER PHPH 214.745.5400214.745.5400 WINSfEADWINSfEAD SECHRESTSECHREST&& MINICKMINICK AilsAilstin,tin, Dallas,Dallas, FortFort Worth,Worth, 12011201 ELMELM STREETSTREET FAXFAX 214.745.5390214.745.5390 AttorneysAttorneys andand CounselorsCounselors HOllston, Houston, i\texicoi\fexico City,City, DALLAS.DALLAS. TEXASTEXAS 7527075270 WINSTEAD.COMWINSTEAD.COM AA ProfessionalProfessional Corporation Corpora/joll TheThe Woodlands,Woodlands, WashingtonWashington D.C.D.C.

EXHIBIT "O"

EricEric G. G. Calhoun,Calhoun, Esq.Esq. July July 24, 24, 2002 2002Page Page 22

IfIf youyou gogo backback andand rereadreread thethe statementsstatements mademade by by Mr.Mr. StevenSteven ShawShaw inin thethe DallasDallas MorningMorning NewsNews articlearticle ofof MayMay 22,22, 2002,2002, itit isis clearclear thatthat thethe PensionPension System,System, throughthrough itsits BoardBoard member,member, Mr.Mr. Shaw,Shaw, mademade aa misleadingmisleading reportreport basedbased onon Mr.Mr. Alexander'sAlexander's work,work, whenwhen hehe said,said, "We"We havehave absolutelyabsolutely nono evidenceevidence thatthat anyany otherother employeeemployee [other[other thanthan Ms.Ms. TaraTara Anderson]Anderson] isis involvedinvolved inin this."this."

RegardingRegarding youryour requestrequest inin ParagraphParagraph 44 ofof youryour "DRAFT""DRAFT" letter,letter, underunder thethe ConsultantConsultant ContractContract signedsigned byby thethe PensionPension SystemSystem andand Mr.Mr. Alexander, Alexander, under under Paragraph Paragraph 88 itit states states that that"Consultant"Consultant shallshall retainretain allall recordsrecords relatingrelating toto thisthis Contract Contract for for three three years years following following termination, termination,during during which which time time System System reserves reserves the the right right to to audit audit such such records records at at its its election". election". Thus, Thus,Paragraph Paragraph 4 4 ofof youryour "DRAFT""DRAFT" letterletter meansmeans thatthat thethe PensionPension SystemSystem isis askingasking Mr.Mr. AlexanderAlexander toto breachbreach thethe ConsultantConsultant Contract,Contract, whichwhich isis obviouslyobviously unacceptable.unacceptable.

II amam hopefulhopeful thatthat you,you, youryour firm,firm, andand youryour clientclient willwill recognizerecognize thethe prudenceprudence associatedassociated withwith acceptingaccepting thethe proposalproposal made made in in my my letter letter to to Mr. Mr. Lawson Lawson before before Friday, Friday, July July 26, 26, 2002 2002 at at5:00p.m. 5:00p.m.

PTB/cll PTB/cll

cc: cc: Columbus Columbus A. A. Alexander, Alexander, III. III.

DALLASDALLAS 1\3683366\11\3683366\1 39832-107124/200239832-107124/2002

EXHIBIT "Q"

~.~.

AugustAugust 7,7, 20022002 directdirect dial:dial: 214/745.5462214/745.5462

tboston@winstead.comtboston@winstead.com

VIAVIA FACSIMILEFACSIMILE -- (972)(972) 490-9545490-9545

EricEric G.G. Calhoun,Calhoun, Esq.Esq. Lawson,Lawson, Fields,Fields, McCue,McCue, LeeLee && Campbell,Campbell, P.C.P.C. 1413514135 MidwayMidway Road,Road, SuiteSuite 250250 Addison,Addison, TXTX 7500175001

Re:Re: DallasDallas PolicePolice andand FireFire PensionPension SystemSystem v.v. ColumbusColumbus A.A. Alexander,Alexander, IIIIII a/k/aa/k/a SandySandy AlexanderAlexander d/b/ad/b/a CFOpros;CFOpros; CauseCause No. No. 02-04814; 02-04814; In In thethe 4444tthh JudicialJudicial DistrictDistrict CourtCourt ofof DallasDallas County,County, TexasTexas

DearDear Eric: Eric:

ThisThis letterletter isis toto memorializememorialize ourour agreement.agreement. TheThe PensionPension SystemSystem andand Mr.Mr. AlexanderAlexander agree,agree, andand evidenceevidence samesame byby theirtheir signaturessignatures below,below, toto resolveresolve thisthis mattermatter onon the the following followingterms: terms:

1. 1. TheThe PensionPension SystemSystem willwill paypay Mr.Mr. Alexander'sAlexander's outstandingoutstanding invoicesinvoices andand allall ofof hishis expensesexpenses incurredincurred by by cashier's cashier's check check payable payable to to "CFOpros"CFOpros"", , with with such such funds funds to to be be delivereddelivered whenwhen Mr.Mr. AlexanderAlexander deliversdelivers thethe documentsdocuments inin accordanceaccordance withwith ParagraphParagraph 44 below,below, nono laterlater thanthan AugustAugust 9,9, 2002.2002.

2.2. AA dismissaldismissal withwith prejudiceprejudice ofof thethe lawsuit,lawsuit, within within 48 48 hours hours ofof thethe executionexecution ofof thisthis Agreement,Agreement, withwith eacheach partyparty toto bearbear its/hisits/his ownown expensesexpenses andand withwith theirtheir executionexecution ofof thisthis letterletter constituting constituting a a complete complete mutual mutual release release ofof allall claims,claims, causescauses ofof action,action, knownknown oror unknown,unknown, contingentcontingent oror fixed,fixed, atat lawlaw oror inin equityequity betweenbetween andand amongamong Mr.Mr. Alexander,Alexander, CFOpros,CFOpros, itsits partnerspartners agents,agents, affiliates,affiliates, andand otherother relatedrelated personspersons oror entitiesentities onon thethe oneone hand,hand, thethe PensionPension System,System, membersmembers ofof itsits boardboard ofof trustees,trustees, staffstaff andand otherother related related persons persons oror entitiesentities onon thethe otherother hand,hand, underunder anyany theorytheory ofof recovery,recovery, includingincluding withoutwithout limitationlimitation releaserelease ofof anyany allegedalleged defamationdefamation claimsclaims (including(including claimsclaims arisingarising fromfrom anyany republication republication ofof thethe DallasDallas MorningMorning NewsNews Article)Article) andand thethe publicationpublication ofof ExhibitExhibit "A""A" asas setset forthforth atat ParagraphParagraph 44 below,below, andand claimsclaims forfor attorneysattorneys fees,fees, costscosts oror expenses.expenses. TheThe PensionPension System,System, itsits trustees,trustees, andand employeesemployees agreeagree notnot toto callcall upon upon or orcontact contact Mr. Mr. Alexander, Alexander, oror useuse hishis servicesservices andand knowledge,knowledge, inin anyany wayway inin thethe future,future, andand likewise likewiseMr.Mr. AlexanderAlexander willwill notnot callcall uponupon oror contactcontact thethe PensionPension System,System, itsits TrusteesTrustees oror employees.employees.

3.3. TheThe executionexecution andand mailingmailing nono laterlater thanthan AugustAugust 12,12, 2002,2002, ofof thethe attachedattached (as(as ExhibitExhibit "A")"A") letterletter by by certifiedcertified mail,mail, returnreturn receiptreceipt requested,requested, toto thethe DallasDallas MorningMorning NewsNews andand thethe AssociationAssociation ofof CertifiedCertified FraudFraud ExaminersExaminers withwith thethe PensionPension SystemSystem deliveringdelivering greengreen cardscards toto Mr.Mr. Alexander'sAlexander's attorney,attorney, TalmageTalmage Boston.Boston.

54005400 RENAISSANCERENAISSANCE TOWERTOWER PHPH 214.745.5400214.745.5400 WINSTEADWINSTEAD SECHRESTSECHREST && MINICKMINICK AA listlist in,in, Dallas,Dallas, FortFort Worth,Worth, 12011201 ELMELM STREETSTREET FAXFAX 214.745.5390214.745.5390 AttorneysAttorneys andand Counselors COllnselors HOllston,Houston, Mexico Mexico City,City, DALLAS,DALLAS, TEXASTEXAS 7527075270 WINSTEAD.COMWINSTEAD.COM AA Pro/essio1/alProfessional Corpora/ionCorpora/ion TheThe Woodlands,Woodlands, WashingtonWashington DCDC

EXHIBIT "Q"

EricEric G.G. Calhoun,Calhoun, Esq.Esq. AugustAugust 7,7, 20022002 PagePage 22

4. 4. Mr.Mr. AlexanderAlexander andand hishis counselcounsel shallshall returnreturn toto thethe PensionPension System System the the originalsoriginals (if (ifany) any) and and all all copies copies of of anyany andand allall documentsdocuments andand tape tape recordingsrecordings (and(and anyany transcriptstranscripts thereof)thereot) obtainedobtained duringduring thethe coursecourse andand scopescope ofof CFOpros'CFOpros' engagementengagement withwith thethe PensionPension System.System.

5. 5. PerPer thethe terms terms ofof his his ConsultantConsultant Contract Contract with with the the PensionPension System System of of AprilApril 88,, 2002,2002, Mr.Mr. AlexanderAlexander shallshall agreeagree toto maintainmaintain asas confidentialconfidential allall informationinformation hehe obtainedobtained and and all allconclusions conclusions he he derived derived fromfrom his his workwork forfor thethe PensionPension System.System.

6.6. The The PensionPension SystemSystem shall shall comply comply withwith itsits prior prior agreementagreement ofof MayMay 29,29, 20022002, ,(attached (attached asas ExhibitExhibit "B")"B") nono laterlater thanthan AugustAugust 99,2002., 2002.

7.7. The The PensionPension System System agrees agrees that that Alexander Alexander hashas completed completed his his obligations obligations underunder their their contract contract and and that that its its Administrator's Administrator's reportreport ofof suchsuch agreementagreement willwill be be recordedrecorded inin thethe minutesminutes of of thethe next next regularlyregularly scheduled scheduled BoardBoard meeting.meeting.

8. 8. The The parties parties agree agree that that fromfrom thisthis date date forward,forward , neitherneither ofof themthem shall shall communicate communicateanythinganything toto anyoneanyone publiclypublicly oror privatelyprivately toto disparagedisparage oror derogatederogate eacheach other other oror thethe performanceperformance ofof eacheach other.other. InIn thatthat regard,regard, thethe PensionPension System System shall shall publish publish the the letterletter attached attached asas ExhibitExhibit "A""A" onon thethe PensionPension System'sSystem's website,website, andand includeinclude it it asas anan attachmentattachment toto thethe PensionPension SystemSystem BoardBoard of ofTrustee'sTrustee's minutesminutes as as the the Board'sBoard's firstfirst meetingmeeting afterafter thethe executionexecution ofof thethe SettlementSettlement Agreement.Agreement.

All parties should sign below to evidence our agreement.All parties should sign below to evidence our;:~~:I+--

~Irn ge Boston, Attorney for CFOpros

PTB/cllPTB/cll

AGREED:AGREED:

EricEric G.G. CalhounCalhoun CounselCounsel forfor DallasDallas PolicePolice

andand FireFire PensionPension System System

EXHIBIT "Q"

EricEric G.G. Calhoun, Calhoun, Esq.Esq. AugustAugust 7,7, 20022002 Page Page 33

Dallas Dallas Police Police andand FireFire Pension Pension SystemSystem

CFOprosCFOpros

BY:_--=:-=6::;--- ~,.£- _

Its:- - -7-'---'--:;---=-''-'--==-----­

Columb der, III, CFE

DALLASDALLAS _I _ I\3689034\1\3689034\ 1 39832-39832-1 108/07/200208/07/2002

EXHIBIT "Q"

D ALL A SBoardBoardofof TrusteesTrustees

RRichard ichardL. L. TTettamant. ettamant,POLICE POLICE &: &: FIREFIRE PENSION PENSION SYSTEMSYSTEM Gerald Gerald Brown, Brown, ChairmanChairman

AdmiAdministrator nistratorGary GaryWW. . Edge Edge

Donald Donald W. W. HillHillBrian Brian FF. . BBlake, lake ,

John John M. M. MaysMaysAssiAssistant stant AdminAdministrator istrator

Rector Rector McCollum McCollumSteven Steven G. G. Shaw Shaw

Donald Donald CC. . RRohan, ohan,Maxine Maxine Thornton-ReeseThornton-Reese

AAssistant ssistant AAdministrator dministratorGeorge GeorgeJ. J. Tomasovic TomasovicSteven Steven H. I-I. Umlor Umlor

August August 66, , 2002 2002 Richard Richard H. H. WachsmanWachsman

DALLAS DALLAS MORNING MORNING NEWS NEWS Mr. Mr. JohnJohn Gill,Gill, J.D., J.D" CFECFE MetropolMetropolitan itan Section Section Editor Editor GeneralGeneral CounselCounsel 508 508 Young Young Street Street Association Association ofofCertifiedCertified FraudFraud ExaminersExaminers Dallas, Dallas, Texas Texas 75202 75202 TheThe GreggGregg BuildingBuilding

716716 WestWest AvenueAvenue MrMr. . Dave Dave MichaelMichaels s Austin,Austin, TexasTexas 78701 78701 DALLAS DALLAS MORNINMORNING G NEWS NEWS550808 Young Young Street StreetDallas, Dallas, Texas Texas 7752025202

Re: Re: DaDallas llas Morning Morning News News Dallas Dallas PolicePolice and and FireFire Pension Pension SystemSystem Audit Audit ArticleArticle ofof May May 2222, , 20022002..

DDear ear SirsSirs::

On On May May 2222, , 20022002,, an an article article written written by by Mr.Mr. MichaelsMichaels appearedappeared inin thethe MetropolitanMetropolitan Section Section of of the the Dallas Dallas Morning Morning News News regarding regarding thethe DallasDallas PolicePolice andand FireFire PensionPension SystemSystem (the(the "Pension "Pension System") System") audit, audit, which, which, inin tum, turn, was was postedposted onon thethe websitewebsite ofof thethe Association Association ofofCertified Certified Fraud Fraud EExaminers. xaminers. A A copcopyy of ofboth both articles articles isis attachedattached toto thisthis letter.letter. AfterAfter reviewingreviewing thethe articlearticle, , it it has has become become clear clear that that there there were were sevseveraleral potentiallypotentially misleadingmisleading statementsstatements and/orand/or ambiguities ambiguities in in the the information information reported reported by by Mr. Mr. MichaelsMichaels whichwhich shouldshould nownow bebe correctedcorrected concerning concerning CFOpros CFOpros and and its its Certified Certified FraudFraud Examiner, Examiner, Mr. Mr. ColumbusColumbus A.A. Alexander, Alexander, III,III, whowho was was hired hired by by the the Pension Pension System. System.

In In particular, particular, the the inaccuracies inaccuracies are are as as followsfollows andand shouldshould bebe corrected:corrected:

I. 1. In In your your subheadlinsubheadline, e, it it statstates es "Police-Fire "Police-Fire PensionPension BoardBoard FiresFires Examiner,Examiner,Disputes Disputes Some Some Assertions"Assertions". . In In fact, fact, the the PensionPension SystemSystem did did notnot "fire""fire" Mr.Mr. Alexander; Alexander; rather,rather, hishis Contract Contract terminated terminated on on May May 88, , 2002, 2002, per per iits ts terms, terms, andand atat itsits BoardBoard ofof Trustees'Trustees' meetingmeeting onon MayMay 9, 9, 2002, 2002, the the Pension Pension System System chose chose not not to to eextend xtend thethe ContractContract beyondbeyond itsits terms.terms.

23012301 NN. . AAkard kard SStreet treet • • SSuite uite 200200 •• DaUas, Dallas, Texas Texas 7520175201 PPhone ho ne 2214.638.3863 14.638.3863 •• FaxFax 214.638.6403214.638.6403

~,~~,

D ALL A 5

EXHIBIT "Q"

DallasDallas Morning Morning NewsNews Mr.Mr. Dave Dave MichaelsMichaels AugustAugust 8, 8, 20022002 PagePage 22

2.2. OnOn the the second second page page of of the the Article, Article, inin thethe nextnext to to last last paragraph paragraph inin the the left left column,column, the the article article reads reads that, that, "Pension "Pension System System Trustees Trustees voted voted Tuesday Tuesday toto terminatterminate e Mr. Mr. Alexander'sAlexander's contract, contract, saying saying hehe made made wide-ranging wide-ranging allegations allegations about about fraudfraud and and abuseabuse butbut declined declined to to disclosedisclose evidence evidence thatthat supports supports hishis conclusions". conclusions". Again, Again, thethe BoardBoard ofof Trustee's Trustee's did did notnot vote vote to to tterminateerminate MMr. r. AAlexander's lexander's Contract, Contract, butbut ratherrather to to not not extend extend aa contract contract that that had had alreadalready y terminated terminated by by itsits ownown terms. terms. In In addition,addition, thethe appropriate appropriate time time forfor Mr. Mr. Alexander Alexander to to provide provide aall ll ofof ththe e evidevidenceence supportingsupporting his his interim interim conclusions conclusions hadhad notnot yeyet t arisen arisen when when thethe articlearticle wwas as published.published.

The The PensionPension SystSystem em iis s hopeful hopeful ththat at yyou ou will will publish publish this this letter letter soon soon to to make make ssureure the thepotentipotentially ally mimisleading sleading statemstatements ents arare e corrected corrected for for the the public public record. record. TheThe Pension Pension SystemSystemfurther further hopeshopes thatthat thethe potentially potentially misleadingmisleading and/orand/or ambiguous ambiguous information information reported reported byby Mr.Mr. Michaels Michaels did did notnot causecause any any harm harm toto Mr.Mr. Alexander, Alexander, CFOpros, CFOpros, its its partners, partners, andand affiliaaffiliates.tes.

ChairmanChairman ofof tthe he BoardBoard ofof TrusteTrustees,es, Dallas Dallas PoPolice lice aand nd FiFire re PensPensionion System System

TB:cll TB:cllccc: c: ColumbColumbusus A. A. AleAlexander, xander, Ill, III, CCFEFE

Aur-29-2002Aur-29-2002 06:20Pn06:20Pn ~rom-WINSTEAO~rom-WINSTEAO SECHREST'SECHREST' MINICK/l MINICK/l-~-~

+214-74B-5390+214-74B-5390 T-35eT-35e P.002/002P.002/002

EXHIBIT

F-383F-383

"Q"

CAUSECAUSE NO.NO.D2..04814D2..04814

DAUASDAUASpouapoua ANDAND §§ ININ THETHE DISTlUl."'TDISTlUl."'T COURTCOURT FIREFIRE PENSIONPENSION Sy~Sy~ §§

§§ P1ab11iff,P1ab11iff, §§

§§ VS.VS. §§ OFOF DALLASDALLAS COUNTY.COUNTY. TBXASTBXAS

§§ COLUMBUSCOLUMBUS A.A. ALBXANDE!l.ALBXANDE!l. nrnr §§ aNaaNa SrmdySrmdy A1exau4erA1exau4er §§ WIWI CFOpros,CFOpros, §§

§§ DefeAdant.DefeAdant. §§ 44ll1JUPICIAL44ll1JUPICIAL PlSTRICTPlSTRICT

m!!!IBJlIm!!!IBJlI NOUYIINOUYII mBlMM!ICEmBlMM!ICE

CAMECAME ONON for for 00DSiderati0a00DSiderati0a PlaiuliffPlaiuliff DallasDallas PoliAlPoliAl aaQ.aaQ. FileFile ~easioD~easioD SystemSystem

NoliccNolicc ofof NOJ»-"NOJ»-" iaia 1l1is1l1is aQISe,aQISe, haviPghaviPg beenbeen pm~lypm~ly a41:itndya41:itndy fil«l..fil«l.. toto 4ismiss4ismiss with with

prejudiceprejudice uyuy aDdaDd aUaU claimsclaims apiDstapiDst DefmdaDt.DefmdaDt. Col\lmbQSCol\lmbQS A. A. AlexaIIder)AlexaIIder) mmaIkIaaIkIa SaudySaudy

AlGaraderAlGarader dIb!adIb!a CFOp;Ds..CFOp;Ds.. All All disputesdisputes betweenbetween tl\etl\e paniespanies !lave!lave beeubeeu seU1cd..seU1cd..

AccoJCUnlly~AccoJCUnlly~ tbBtbB CounCoun isis of.of. opiuionopiuion t1Iatt1Iat ontIyontIy of.of. OrderOrder ofofNonsuitNonsuit W11'hW11'h Plejudic;ePlejudic;e

shouldshould bebe IIldIIld btebybteby isis snmr.e4.snmr.e4. ItIt isis 1betCf1betCfoofe,re,

ORDEREDORDERED that that aUaU c1ah:Dsc1ah:Ds ofof P1lQntiffP1lQntiff DallasDallas PolicePolice aDd.aDd. FireFire PeuioDPeuioD Syst8IUSyst8IU as as

1:01:0 DcfeQdantDcfeQdant CaNmb\lSCaNmb\lS A.A. .AlexaDdu,.AlexaDdu, m.m. aIkIaaIkIa Saa4ySaa4y ~~ 4/bIa4/bIa CPOpJosCPOpJos inin thisthis

causecause are are dismisse4dismisse4 withwith prejuQicoprejuQicoaa andand thatthat wehweh naIIS1JilnaIIS1Jil aot:ice4aot:ice4 andand filedfiled by by PlaintiffPlaintiff

DtlluDtllu poll"poll" aa4aa4 FileFile PlIlSiooPlIlSioo SystemSystem isis herebyhereby ~~ aDdaDd INsINs causecause isis ~y~y

dismissed.dismissed.

!NT£RED!NT£RED 1biB1biB ~~clayof~clayof~ 20022002..

.. .. ':~-':~-PRESltJINGPRESltJING1tJDGE1tJDGE

EXHIBIT "Q"

tr-.~. ,~~ .d_Ii\[~:::':"""M"'YI"!<~I'I!~~:;~;:~"~:;~::"l!lt"'!M!.;t'~;'I'''M''~~'~~;;;~-~ '=.=-!~

~~1 TEXAS 1ll-86 !~~I) ~""~":LA\~SON & FIELDS P.C.-!:"~':·'· 08/09/02 ~.1:1 .... 220

P""u...,rc""h""a""-se"'r _

\1r"j Pay To The ,':7'::':CFOpr 0 S,'::':-;': J Order 01

«'1,;;l

:fl ~1;.!·1-------------------;;...-..-----;;:-~--==

1 .,.~ '}'

RE: FORFOR CONFIDENTIALCO NFIDENTIAL SERVICES SERVICES RENDERD***RENDER D***

= •• .. .

I:0 2 20 0 0 8 b 8 I: b 8 III L. 50 9 ~ 8 SS9?9:1??b5 5 9 7 9 :1 7 7 b

10/01/02 t~~ 14:50 FAX 214 745 5859._.•.IS&![ DALLAS FLOOR 65 ~002

Talmage: This phone lIlcssage was recci"ed Monday, September 30, 2002 at 3:00 p.m.during the tirne I was in a conference with Sandy Alexander in our office.

Gary: Talmage, Gary l..awson. Guess what? You know the story about trying to throwaway the bad pelUly and it comes bac~ I think we got it. I 'discovered, my clieJ ltdiscovered that Sandy Alexander has his website at no less than DPFPS.org analDPFPS.COOI. Well, as you can imagine that set ofinitials is a commonabbreviatioll for the Dallas Police Fire Pensioll System. Could you give me a callso we can visit, maybe avoid some further controversy here. My client is nothappy with this cybersquatting by this guy. I don't even know why he thought itwas a rational thing to be doing because I think he is smarter than that. 972·49)·0808. Thanks Talmage. Bye

DALLAS_l\37143P6\139832.1 10!0112C01