New Perspective

Audit report clarifies fraud claims

About Town – TUESDAY, 4/14/26

After the stunning allegations made by former city manager Scott Carney and his assistant Bobby Magee that there was widespread credit card fraud by city employees, among other charges, the city council had a forensic audit done. The just-released final report seems to have substantially dismissed the allegations or put them in perspective. The audit was conducted by CPA Steven Hoslett from Hoslett Forensics. He wrote that the city conducted testing on five years’ worth of Cal Card charges, finding violations of city policy totaling about $8,625 over the past five years. Violations were mostly for exceeding daily spending limits and for unapproved meals and flight upgrades. No intentional fraud was found. Most of the money has been repaid, writes Hoslett, and changes in procedures have been implemented. Consultants Baker Tilly and Magee also alleged there was a utility deposit account with discrepancies totaling well over $1 million and that the account was irreconcilable. Hoslett writes that the calculations Baker Tilly used “are significantly flawed and overstate the difference.” He says the actual discrepancy of $67,000 is a result of data input clerical errors. Carney made the claims of fraud and misuse of taxpayer funds at a public meeting on April 1 of last year. Carney kept reading his statement despite the mayor's attempts to stop him from sharing protected personnel information. The council met a week later and put Carney on paid leave before terminating him six months later. Magee resigned eight months later. The city spent about $360,000 with Baker Tilly for their consulting services. Mayor Ramon Yepez says, “The final forensic audit makes clear that the earlier claims of intentional fraud were not supported.” But he adds, “The audit still identified weak internal controls, poor oversight, and improper use of city resources. The public expects taxpayer dollars to be managed with integrity, and that standard must remain non-negotiable.”

HELP WANTED: Meanwhile, the search goes on to fill several key spots in the city’s upper echelon. City spokesperson Nancy Sarieh says interviews for city manager were conducted on Mar. 29 and the list has been narrowed for second round interviews. She adds that recruitment for a new city attorney will launch soon. John Luebberke was appointed to fill the position vacated by Katie Lucchesi. Luebberke was Lodi’s Deputy CA in the mid-‘90s and spent 12 years as Stockon’s city attorney. The community development director recruitment is “still in process,” says Sarieh. The spot became vacant after John Della Monica retired in February.

WINNER: Lodi House was recently chosen as