City of Providence Investigation Summary: January 20, 2009

City of Providence
Investigation Summary
January 20, 2009
ADVISORY
Prepared by:
KPMG LLP
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Table of Contents
I. INTRODUCTION
A. Background ...................................................................................................................................... 1
B. Limitations on Liability ...................................................................................................................... 1
II. EXECUTIVE SUMMARY ........................................................................................... 3
III. METHODOLOGY
A. Investigative Approach..................................................................................................................... 5
B. Document Review ............................................................................................................................ 5
IV. INVESTIGATIVE OBSERVATIONS

A. Garcia Enterprises’ Tax Matter ........................................................................................................ 9
B. Garcia Enterprises’ Connection to the Mayor, and other City Officials.......................................... 28
C. Other Matters – Tax Sale and Interest Abatements ...................................................................... 28
V. PROCESS OBSERVATIONS AND RECOMMENDATIONS

A. Tangible Tax Assessment.............................................................................................................. 37
B. Tangible Tax Collection.................................................................................................................. 40
VI. EXHIBITS
Privileged & Confidential – Attorney Work Product i

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I. INTRODUCTION
A. Background
On October 1, 2008, the City of Providence, Rhode Island (hereinafter the City), through its Law
Department, retained KPMG LLP, (hereinafter KPMG) to assist the City in its efforts to conduct an
investigation into the facts and circumstances related to outstanding tangible taxes owed to the City by
Garcia Enterprises, Inc. (hereinafter Garcia Enterprises).1
Garcia Enterprises is a local business owned and operated by Felix “Nelson” Garcia.2 Garcia (also known
as Nelson Garcia) runs a hardware store and auto-parts business located at 577 Cranston Street in
Providence, RI.
In September 2008, it was publicly reported3 that Garcia Enterprises owed the City a substantial amount
of back taxes and interest, related to tangible property taxes assessed on Garcia Enterprises dating to
1998. These taxes were assessed on the tangible assets of Garcia Enterprises, including office furniture,
equipment and inventory, and according to these reports, Garcia Enterprises currently owed nearly
$79,000 in back taxes, and approximately $54,000 in interest, for a total amount owed of approximately
$133,000.
These reports also provided the following information about this matter:
• The City obtained a judgment against Garcia Enterprises in 2005 for back taxes and interest owed, in
the amount of approximately $90,000. In January 2006, relative to this judgment, the City placed a
lien on property owned by Garcia Enterprises, at 559 Cranston Street in Providence.
• In May 2006, a settlement was apparently reached between Garcia Enterprises and the City, for
$75,000. In connection with the settlement, the lien was discharged.
• At this time, John Cicilline, a private attorney representing Garcia Enterprises in this matter, and
Providence Mayor David Cicilline’s brother, apparently provided a check in the amount of $75,000
from his law office account to the City on his client Garcia Enterprises’ behalf.
• John Cicilline was apparently providing the check as “collateral” so that his client Garcia Enterprises,
with the lien now lifted, could refinance its property at 559 Cranston Street in order to obtain funds to
pay the $75,000 settlement amount to the City.
• John Cicilline’s check was apparently held by the City, and purportedly never deposited or cashed.
• Garcia Enterprises reportedly refinanced his property in 2007, but has not made any tangible tax
payments to the City.
B. Limitations on Liability
KPMG was not engaged to perform an audit, review, or compilation of financial statements or financial
information, as those terms are understood and defined by professional guidance promulgated by the
American Institute of Certified Public Accountants, and, accordingly, it expresses no opinion or other form
of assurance on financial statements or financial information. Furthermore, KPMG was not engaged to
conduct a comparative legal analysis or to provide any legal conclusions, opinions, or advice herein.
This report provides the results of KPMG’s work investigating the facts and circumstances related to
outstanding tangible taxes owed by Garcia Enterprises, and is based upon information as it existed at the
1
See attached engagement letter in Exhibit 1.
2
Garcia Enterprises, Inc. is a Rhode Island Domestic Profit Corporation formed in 1988. In its 2008 Annual Report filing, Felix N. Garcia is identified as President. In this Report, the
business is described as “Hardware and General Dry Goods.” See attached Exhibit 2.
3”
Cicilline’s brother linked to probe over back taxes,” September 19, 2008, Providence Journal; “The City of Providence spent months trying to collect on a bad check from the mayor’s
brother,” September 28, 2008, Providence Journal. See attached Exhibit 3.
Privileged & Confidential – Attorney Work Product 1

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I. INTRODUCTION (continued)
time of KPMG’s work. The observations and recommendations of KPMG as presented in this report are
based on and limited to the scope of the procedures performed as described in the Methodology section
below. KPMG relied on the information supplied, and recollection of, the individuals interviewed as well as
the analysis of the relevant documentation provided at the time of our request. Were KPMG to perform
additional procedures, or should the information provided be inaccurate for any reason, it is possible that
our assessment and observations would be different. If further documentation or explanations come to
light after the issuance of our report, KPMG reserves the right to, but is not obligated to, amend its
findings, recommendations, or considerations for enhancement.
This report and its exhibits are not intended for general circulation or publication, nor are they to be
reproduced or used for any purpose other than that outlined in our engagement letter with the Law
Department of the City of Providence dated October 1, 2008, without prior written permission from KPMG
in each specific instance. KPMG disclaims any responsibility or liability for losses, damages or costs
incurred by anyone as a result of the unauthorized circulation, publication, reproduction or use of this
report or its exhibits contrary to the provisions of this paragraph.

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II. EXECUTIVE SUMMARY
Prior to outlining key facts uncovered during our investigation, it is important to note that during the
course of our investigation, some parties interviewed had varying recollections regarding the timing,
nature and circumstances of certain events related to this matter. In reviewing information gathered
during interviews, we considered it in conjunction with considerable electronic and hard copy
documentation that was gathered and reviewed. As a result, we were able to substantially piece together
certain facts and circumstances of this matter as described herein. Any areas of uncertainty or noted
inconsistency are highlighted in Section V. Investigative Observations.
The following matters highlighted in this executive summary are discussed in more detail within the body
of this report.
Our investigation revealed that while certain aspects of this collection matter were handled in a manner
consistent with City policy and past practices, terms of the settlement agreement reached with the
taxpayer Nelson Garcia through his attorney John Cicilline in May 2006 were unorthodox in light of past
practice. These terms included the acceptance of a questionable check from John Cicilline as a form of
collateral or surety in anticipation of payment to be made by the taxpayer Garcia, and the agreement to lift
a lien previously placed on Garcia Enterprises’ property. Related to this finding, it is important to note,
however, that the Collector’s Office policies and procedures do not specifically address requirements for
settlement agreements, and grant the City Collector wide discretion in the handling of tax collection
matters.
We also determined that Robert Ceprano, the City Collector, and Scott Hammer, one of the City’s outside
Collection Attorneys, along with other officials within the City’s administration who eventually became
involved in the collection effort, made ongoing attempts to collect Garcia’s taxes following the settlement
agreement, at least up until approximately December 2006. Clearly, these attempts were ultimately
ineffective.
These efforts included the deliberate decision by the City not to attempt to cash the initial check for
$75,000 provided by John Cicilline on his client’s behalf, in order to allow Garcia more time to refinance
his property so that he could obtain the funds to pay the back taxes and interest.
The decision to continue to not cash the check during the course of this matter was made by the Mayor’s
Chief of Staff, Chris Bizzacco, and was influenced according to Bizzacco by the knowledge that the
account on which John Cicilline’s check was drawn did not contain sufficient funds to cover the check.
The exact timing as to when City officials learned of the insufficient fund status of John Cicilline’s account
remains in dispute, and no documentation was located that indicates exactly when this first came to be
known.
Our investigation revealed contradictory recollections as to when Mayor Cicilline was informed of the
Garcia tax matter, and his brother’s involvement. Chris Bizzacco recalled that he and the City’s former
Director of Administration, John Simmons, informed the Mayor of this matter in or around October 2006.
Mayor Cicilline, on the other hand, had no memory of this conversation, which John Simmons similarly
could not recall. Mayor Cicilline indicated that he first learned of the Garcia tax matter and his brother’s
involvement in approximately September 2008, when it was reported publicly.
Despite these conflicting recollections, we found no evidence, in documents reviewed or through
interviews conducted to indicate that the Mayor attempted to or actually unduly influenced actions in this
matter taken by officials in the Collector’s Office or within his Administration, that would be inconsistent
with or in violation of City policy.
On December 1, 2006, John Cicilline signed a written agreement with the City concerning this matter, in
which he agreed to allow the City to reinstate the lien on his client’s property, and deposit Cicilline’s
replacement check after sixty (60) days. This agreement was returned to Ceprano, who for reasons that
he could not satisfactorily explain, did not act to have it completed by obtaining Scott Hammer’s required
signature. Hammer advised that he was not made aware of the fact that John Cicilline had signed the
agreement, and as a result did not pursue the reinstatement of the lien on Garcia’s property or ever

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II. EXECUTIVE SUMMARY (continued)
attempt to actually deposit the replacement check provided by Cicilline under the terms of the written
agreement. Ceprano, on the other hand, states that he did inform Hammer that John Cicilline had signed
the agreement, but that Hammer in response was reluctant to continue to handle the matter due to his
concern he would not get paid, and over the prospect of successfully reinstating the lien. For reasons he
could not reasonably explain, Ceprano advised that he simply put the agreement into a folder in his office,
and never did anything further with it. Relative to this conflicting recollection, we note that Ceprano
maintained a Garcia Enterprises file containing significant correspondence, including copies of emails,
related to this matter. We did not locate any documentation within this file, or within any other hard copy
or electronic documentation associated with Ceprano that we reviewed to indicate that he informed
Hammer of the signed agreement.
After December 2006, efforts to collect Garcia Enterprises’ taxes were minimal. In May of 2007, Nelson
Garcia successfully obtained a mortgage loan on the property on which the City lifted its lien, and has
since obtained additional mortgage loans on this and other Providence property that he owns. Since
obtaining these loans, he has not made any payments to the City for tangible tax and interest owed.
During the course of our investigation in the Garcia Enterprises tax matter, allegations were made by
Robert Ceprano regarding attempts by the Mayor and other administration officials to direct certain
actions of the Collector’s office. These actions involved determinations as to which real properties were
placed on the 2008 Tax Sale list, and also involved determinations regarding whether to grant interest
abatements to certain taxpayers. Our limited inquiry into these allegations uncovered documentation that
revealed that in certain of these instances, the Mayor through other Administration officials appears to
have to been involved in some capacity with the handling of these tax matters.
In regards to these instances, Mayor Cicilline acknowledged “advocating” in agreement with the
respective taxpayers’ positions, based upon what he determined to be either a mistake by the City, or an
“honest” mistake on the part of the taxpayer. The Mayor further stated that he believed the ultimate
decision in these matters rested with the City Collector, and that he was never informed directly or
indirectly by the City Collector of any objection or difference in opinion relative to the Mayor’s advocacy.
While City Collector Ceprano indicated that he did inform supervising City officials of his objections, he
acknowledged that he never directly informed the Mayor of any disagreement. KPMG did locate
information indicating that Ceprano contemporaneously documented his objection in these instances to
the Mayor’s positions, within electronic account files maintained in the Govern software system by the
Collector’s Office.
Finally, we note that during the course of our work in this matter, we held discussions with officials in the
Assessor’s Office and the Collector’s Office regarding the process to assess and collect tangible taxes.
We have included within a latter section of this report certain key observations and recommendations
related to enhancing the process for tangible tax assessment and collection.

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III. METHODOLOGY
A. Investigative Approach
KPMG worked at the direction of the Deputy City Solicitor, Adrienne Southgate. In consultation with the
Deputy City Solicitor Southgate, a scope of work was developed identifying all the investigative tasks that
would be performed by KPMG on behalf of the City’s Law Department during the course of the
engagement.
It was agreed that the investigation would be focused on the issues surrounding the outstanding tangible
taxes owed to the City by Garcia Enterprises, unless and until other areas of investigation were identified
and agreed to. It was also agreed that investigative tasks would include the collection and analysis of
select hard copy documentation and electronic data maintained by the City, and the conducting of
interviews of relevant individuals both internal and external to the City.4 It was also agreed that the Deputy
City Solicitor would receive updates on the progress of the investigation and that the Deputy City Solicitor
and KPMG would determine appropriate modifications to the work plan, if necessary.
KPMG conducted its on-site work at Providence City Hall during October, November and December
2008. While on-site at City Hall, KPMG conducted numerous interviews, and requested and reviewed
documentation, both hard copy and electronic. KPMG also conducted interviews of former City
employees and other third parties at various other locations, and collected publicly available
documentation from other selected sources as detailed herein.
B. Document Review
KPMG also notes the following relative to its processes for the collection, review and analysis of hard
copy and electronic documents:
1. Document Collection and Review

At KPMG’s request, various City departments provided a number of hard-copy documents to KPMG.
These documents primarily related to tangible tax assessment and collection, and also included
organization charts, real property records and personnel records, among others. In addition, KPMG
collected hard copy documents from external sources, including the Providence Superior Court
Clerk’s Office. Collected documents were reviewed and analyzed upon receipt.
A listing of all documents provided to KPMG is included in Exhibit 6.
2. E-Data Collection and Review
Collection
a. Email Server Data
At an early stage in the investigation, KPMG developed a custodian list5 consisting of a number of
City of Providence current and former employees, who, based on initial interviews and
information gathered, may have been involved or had awareness of facts and circumstances
related to the Garcia tangible tax matter. This list was reviewed with the Deputy City Solicitor,
and then those on the list with a recent or currently active City email account were identified.6,7
For these custodians, the City obtained and provided to KPMG available electronic email files
4
A listing of individuals interviewed regarding the Garcia Enterprises tangible tax matter is included in Exhibit 4.
5
A listing of custodians for whom electronic data was provided and reviewed is included as Exhibit 5.
6
The City of Providence’s Electronic Resources policy does not restrict employee’s mailbox sizes; hence employee email is retained on the server until the employee deletes the
email. Employees may delete or archive email to their individual computer hard drive at the request of the City’s Information Technology (IT) Department, which issues such requests
to employees with large mailboxes when space on the overall email server becomes limited.
7
The City’s Electronic Resources policy does not address the handling of employee mailboxes following termination of employment. According to the members of the IT Department,
mailbox accounts of departed employees are left on the server until space is needed, at which time these accounts are deleted to create additional storage space.

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III. METHODOLOGY (continued)
(consisting of approximately 5 gigabytes of data) from the City’s email server.8

b. File Server Data
The City maintains a file server where employees and individual City departments store data.
KPMG requested a file directory listing of the files maintained on this server, and upon receipt,
reviewed this listing in order to identify any email files that may have been archived to this server
by any of the identified custodians. None were located. KPMG also searched for and reviewed
the filenames of all other electronic files maintained by the identified custodians. None of these
files appeared to relate to the Garcia Enterprises tax matter.
c. Archived Email
KPMG requested a listing of all email server back up tapes retained by the City, in order to
determine if archived email from earlier relevant time periods was available. While the City did not
maintain such a listing, they did provide KPMG access to all available backup tapes for
examination. Approximately one hundred fifteen (115) tapes were provided to KPMG.9,10 The
tapes KPMG received were labeled inconsistently and incompletely by the City, and we noted the
following:
• Two (2) tapes did not carry a label or any other distinguishing marks;
• Approximately one hundred ten (110) tapes were labeled with numbers. The numbers
appeared to be sequential from 12 – 126, although some numbers in this range were not
included. Also included were tapes labeled 1, 2, 131, and 618. The City’s IT Department
indicated they utilized sequential numbering relative to backup tapes made and stored over
time.
• In addition, approximately ten (10) of the tapes were labeled with a date that included a
month, date and year.
• Approximately four (4) tapes were labeled with information that appeared to be a date (e.g.
“10/06”) but it was unclear as to whether it contained information representative of a month
and year or month and day.
• In addition to the number and date markings, several of the tapes were labeled with notations
such as “Full Exchange,” “Weekly Exchange,” Daily Weekly” and “Exch Weekly.” Per the
City’s IT Department, these notations pertained to whether a particular backup was a
complete backup, and/or to distinguish between a daily or weekly backup.
The City’s IT Department could not provide any additional information to assist in determining the
actual back up dates associated with these tapes. As a result, KPMG attempted to approximate
the date order by arranging the tapes in their sequential order and estimating weekly dates based
on the few tapes that carried actual date notations. Based on this approximation, KPMG selected
approximately fifteen (15) tapes to be scanned for potential restoration that were estimated to
relate to time periods of significance in the Garcia tax matter.
These time periods included the following:
8
Just prior to KPMG’s engagement, in late September, the City had obtained email data from its email server for several of the KPMG requested custodians. This data was provided
to KPMG initially, and then email data for the remaining custodians, to the extent available, was provided subsequently.
9
The City’s Electronic Resources policy does not contain a procedure regarding backing up the email server or regarding retention of the backup tapes. IT Department personnel
indicated that prior to approximately May 2008, they ran a daily backup of the server, and would allow the backup tape to continue to run until it was full. This daily tape often turned
into the weekly backup tape. The weekly tape was stored in City Hall for four (4) weeks and then shipped off site for an additional four week period; and then sent back to the City.
Some of these returned tapes were then recycled and overwritten while others were kept intact.
10
Per IT Department personnel, In May 2008, the City’s email server crashed, and from that point forward, the City did not continue to back up the email server to tape as had
previously been done. Beginning in approximately October 2008, the City began to back up the email server to its new file server, which added significant storage capacity to allow for
this type of backup.

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• May 2006 - The time period during which a settlement agreement between the City and
Nelson Garcia was apparently reached regarding Garcia Enterprises’ outstanding tangible
taxes. This is also the approximate time period during which John Cicilline provided a check
to the City on his client Garcia’s behalf, and the period when a lien placed on Garcia
Enterprises’ property by the City relative to these outstanding taxes was lifted.
• November/December 2006 - The time period during which an apparent written agreement
between the City and Garcia Enterprises relative to this tax matter was discussed and
prepared.
• January 2007 - The time period during which John Cicilline was indicted on federal criminal
charges, and after which there appeared to be minimal activity related to this matter, per
initial interviews and information gathered.
For another period considered to be of significance, August and September of 2008, when the
Garcia matter was first reported publicly, no backup tapes were available. As noted previously,
during this period, the City was transitioning to an alternative archiving approach, and no
archiving was completed at this time.
The fifteen (15) tapes collected were forwarded to eMag Solutions LLC (“eMag”), a technology
company retained by KPMG to provide tape restoration services. eMag scanned the tapes to
identify associated back up dates, and from these results, KPMG identified five (5) tapes that
contained data relative to the specified time periods above. eMag then restored email data for
selected custodians from those tapes relative to the following dates: June 18, 2006, December
24, 2006, and January 14, 2007 (approximately 6 gigabytes of data).11
d. Hard Drive Data
KPMG requested to collect data from the hard drive of the computer assigned to Robert Ceprano,
the City Collector. The City IT Department delivered Ceprano’s computer to KPMG, and a
forensic image of Ceprano’s hard drive was obtained by KPMG forensic technology personnel
utilizing EnCase Forensic software, which also allowed for the collection and recovery of deleted
files.
The City’s IT Department also notified KPMG that it had located the computer formerly assigned
to Christopher Bizzacco, the Mayor’s former Chief of Staff and Senior Adviser who left his
position in July of 2008. Bizzacco’s computer had not been reassigned, and per the IT
Department, had not been re-formatted, and had been stored in the IT Department’s offices since
his departure.12 KPMG forensic technology personnel also obtained a forensic image of
Bizzacco’s hard drive similarly utilizing EnCase Forensic software.
Processing and Review

e. Email Server Data
The Email Server data initially collected from the City was reviewed by KPMG utilizing manual
keyword searches in order to identify potentially relevant information. Keywords selected were
based on initial interviews conducted and information gathered.13
f. Archived Email Data and Hard Drive Data
KPMG processed the collected archive email and hard drive data in order to identify the most
relevant information for review, as follows:
11
Data restored from June 18, 2006 was sourced from a three (3) tape set; data from December 24, 2006 and January 14, 2007 was restored from individual tapes, respectively.
12
Per the City’s IT personnel, the City IT department typically reassigns computers of departing employees. Prior to reassignment, the computer of a departing employee is
reformatted, which effectively removes the departing employee’s data from the computer.
13
See attached Keyword List in Exhibit 7.

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• Date filtering was applied, in order to capture the most relevant information related to events
in question concerning the effort by the City to collect tangible taxes from Garcia Enterprises.
The time period selected for review was January 1, 2003 to the present, as applicable to the
material collected (e.g., the back up tapes collected only contain data through their respective
date of initial processing).
• Using Outlook Ranger, a software program, KPMG de-duplicated the email data, in order to
remove duplicate emails and utilized EnCase to de-duplicate electronic documents, both
within individual custodians and across all custodians.
• KPMG also developed a keyword search list to be utilized for purposes of electronically
filtering or searching the electronic files for relevant information. A copy of the keyword list
utilized and applied is attached hereto as Exhibit 7.
• The processed data was then reviewed by KPMG in order to identify information potentially
relevant to the apparent misappropriation. This data included approximately 9,467
documents, consisting of emails, associated attachments, and other electronic documents.
The attachments and electronic documents were largely Microsoft office type documents
(Word, Excel, PowerPoint, etc. files).
• KPMG conducted second level review of all documents selected in first level review as
“relevant,” and also conducted sampling reviews of non-relevant documents to ensure
consistency and accuracy in the review process.
Documents identified during this process as containing information relevant to our investigation
were reviewed and considered in conjunction with other information obtained, such as through
interviews. Where appropriate, key documents are referenced in the Investigative Observations
section which follows.

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IV. INVESTIGATIVE OBSERVATIONS
A. Garcia Enterprises’ Tax Matter
1. Garcia Enterprises’ Tangible Tax Account History

KPMG reviewed the tangible tax account records located in the Govern System14 for Garcia
Enterprises for the years 1995 – 2008. Table 1, below, contains a summary of the amounts assessed,
interest owed and payments applied relating to Garcia Enterprises during this time period:
Table 1
Assessment Tangible Tax Payment
Date Due D ate Amount Interest Abatement Applications Balance
12/31/1995 7/1/1996 $ 8,789.20 $ 2,872.07 $ (675.00) $ 10,986.27 -
12/31/1996 7/1/1997 12,016.07 14,347.55 26,363.62 -
12/31/1997 7/1/1998 16,822.50 18,211.64 2,650.11 $ 32,384.03
12/31/1998 7/1/1999 6,364.62 7,129.07 13,493.69
12/31/1999 7/1/2000 7,647.61 7,648.45 15,296.06
12/31/2000 7/1/2001 3,971.82 3,495.64 7,467.46
12/31/2001 7/1/2002 4,901.70 3,725.83 8,627.53
12/31/2002 7/1/2003 6,171.20 3,950.24 10,121.44
12/31/2003 7/1/2004 7,686.04 3,997.58 11,683.62
12/31/2004 7/1/2005 4,011.60 1,605.08 5,616.68
12/31/2005 7/1/2006 5,014.48 1,404.60 6,419.08
12/31/2006 7/1/2007 6,268.12 1,003.59 7,271.71
12/31/2007 7/1/2008 105.00 4.21 109.21
$ 89,769.96 $ 69,395.55 $ (675.00) $ 40,000.00 $ 118,490.51
A review of the account record indicates that Garcia Enterprises did not make any payments on this
account for the above represented tax years, until January 2001. While the City Collector’s Office
does not maintain distinct records identifying the dates on which a tax account is assigned to a
collection agency or attorney, it appears that the account was being handled by Scott Hammer at a
minimum by 1998 (based on a notation in the Govern system that the Garcia Enterprises account
was flagged to Hammer Legal during that year). While it is likely that this account was initially referred
to the city’s collection agency (Municipal Collection Agency, Ltd., or “MCA”) prior to Hammer Legal,
based on our understanding of the standard process, we could not locate any records indicative of
the timing of this assignment.
Based on the nature of the payments received from Garcia Enterprises, as recorded within the
Govern system, it appears that Garcia Enterprises was on a form of payment plan, likely arranged
and coordinated through Scott Hammer (Hammer advised that he currently could not locate any
records pertaining to his collection activity regarding Garcia Enterprises at this time, nor could he
recall with specificity the nature of his dealings with Garcia Enterprises prior to approximately 2004,
when he filed litigation in the matter). Garcia Enterprises made several large payments in early 2001,
and then by October 2001 began to make regular, almost monthly $1,000 payments. These
payments continued until approximately November 2003. From that point going forward, there was
only one additional payment, on August 3, 2004, in the amount of $25,000.
Between January 2001 and August 2004, Garcia Enterprises paid approximately $54,000 in tangible
tax and interest. These payments were applied against principal taxes owed for 1995 to early 1997,
as well as interest. Of these payments, approximately $20,805 was paid to reduce Garcia
Enterprises’ principal balance, and the rest was applied to interest.
14
Govern is the City of Providence’s enterprise wide land management software system, which includes modules for tax assessment and billing, and accounts receivable and cash
collection, among others.

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IV. INVESTIGATIVE OBSERVATIONS (continued)
In June 2004, approximately eight months after Garcia Enterprises had ceased making payments on
this account, Scott Hammer, on behalf of the City of Providence commenced legal action against
Garcia Enterprises with the filing of a complaint in Rhode Island Superior Court on June 22, 2004. In
June 2005, Hammer filed a motion for summary judgment against Garcia Enterprises Inc, for
$90,937, the amount owed by the business in delinquent tangible tax. This amount cited by Hammer
in his motion does not apparently reflect the payment of $25,000 made by Garcia Enterprises to the
City in August 2004. Hammer recently stated that he was not aware that Garcia Enterprises had
made such a payment to the City at that time, and surmised that the $25,000 payment may have
been submitted to the Collector’s office in response to his filing of the lawsuit in June 2004.15
The motion for summary judgment was granted in August 2005, and the Court entered judgment for
the full amount. In January 2006, Hammer levied a lien on behalf of the City against Garcia
Enterprises’ property located at 559 Cranston Street Providence Rhode Island. This lien was
recorded in the Providence Recorder of Deeds office on January 10, 2006.
2. Nelson Garcia’s Contact With the City Collector’s Office prior to May 2006
While Garcia Enterprises’ tangible tax account was in collection dating back to approximately 1996,
we found no indication of direct contact between Nelson Garcia and the City Collector’s office until
approximately 2004. This initial contact appears to have been facilitated through Andrew Andujar, an
Aide to Mayor Cicilline, who was an acquaintance of Nelson Garcia’s brother, Miguel, and led to
contact with the City’s Office of Neighborhood Services (ONS) prior to contact with the Collector’s
Office.
In or around 2004, Miguel Garcia referred Andujar to his brother Nelson relative to purchasing a car
alarm. Later in 2004, Nelson Garcia approached Andujar in Garcia’s store on Cranston Street in
Providence, indicating to Andujar that he had a tax issue with the City that he was seeking to resolve.
Per Andujar, he advised Garcia that he should speak with the City Collector, Robert Ceprano, to
discuss a payment plan.
The following day, according to Andujar, he (Andujar) discussed the Garcia Enterprises tax account
with Pleshette Mitchell, from the ONS. Andujar knew that Mitchell often dealt with constituents who
contacted her office relative to tax issues, and shortly following his discussion with Mitchell, a meeting
was held with the City Collector Ceprano. Mitchell’s and Andujar’s recollections of this meeting differ
slightly, however, relative to payment amounts discussed, and Ceprano did not recall this or any other
meeting relative to Garcia Enterprises prior to 2006. Andujar’s recollection, however, appears
plausible, in that the payment amount of $25,000 he identified as agreed to and paid by Garcia
Enterprises at this time matches the City’s records of payment from Garcia in August 2004.
Andujar’s recollection is also consistent with documentation regarding Garcia Enterprises that was
recently located in the ONS office, which indicates that the resumption of a payment plan was
discussed at this time.
According to Andujar, Ceprano during this meeting reviewed the Garcia Enterprises’ account, and
suggested a payment plan that would include an initial certified funds payment of $15,000 to be
followed by monthly payments of $2500. Andujar contacted Nelson Garcia, who was apparently out of
the country, and Garcia agreed to the plan. He made arrangements through his brother Miguel to
provide a certified check for $15,000 to Andujar for delivery to Ceprano. After Andujar delivered the
check, he was contacted by Nelson Garcia, who now expressed concern about his ability to make the
$2,500 monthly payments. Andujar in turn discussed this with Ceprano, who alternatively suggested a
$25,000 initial payment and $1,000 monthly payments. Per Andujar, Nelson Garcia agreed to this
arrangement, and also through his brother Miguel, delivered a personal check to Andujar for $25,000,
who then provided this to Ceprano.
A review of the Garcia Enterprises tangible tax account confirms the application of a $25,000
15
On October 20, 2008 a new affidavit was submitted to the court in the City’s litigation against Garcia Enterprises, which acknowledged the August 2004 $25,000 payment by Garcia.
See attached Exhibit 8.

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payment to the account on August 3, 2004.16 We did not find any indication that Garcia Enterprises
made any $1,000 monthly payments on the account following (as per the agreement described by
Andujar), as this August 2004 payment was the last noted payment on Garcia Enterprises’ tangible
tax account to date.
As mentioned above, Ceprano did not specifically recall discussing the Garcia Enterprises account
with Andujar or receipt of either the $15,000 or $25,000 checks. Ceprano’s first recollection of the
Garcia Enterprises account dated back only to early 2006, around the time a settlement was reached
regarding all of Garcia Enterprises’ outstanding tangible taxes.
Mitchell, however, confirmed that it was Andujar who first brought the Garcia Enterprises tax account
to her attention, and further indicated that she spoke to Ceprano about the Garcia Enterprises
account following her discussion with Andujar. She could not recall the timing of these events, and
also recalled discussion of payment amounts ($50,000 initial payment, $75,000 subsequent payment)
that don’t match any actual payments or anyone else’s recollection about payment amounts
discussed relative to Garcia Enterprises’ account. We did note, on a Request for Citizen Assistance
form that was completed by Mitchell in August 2004, a statement that “Collector accepted $75,000 to
bring account current,” that may be the subsequent payment to which Mitchell referred. As there is no
indication that a $75,000 payment was made at this time, this reference appears to be an indication of
the amount the Collector was willing to accept as payment in full to bring the account current, at that
time.17
Andujar advised that following the $25,000 payment by Garcia Enterprises to the City in 2004, Nelson
Garcia approached him several months later over concern that his payments had not been applied
correctly, in that his principal balance had not been appropriately reduced. Andujar stated that he
replied to Garcia that he should retain a tax attorney, but that he then did connect with Mitchell and
Ceprano again to discuss this issue. According to Andujar, Ceprano responded that the payments
had been applied correctly, and that he didn’t want to hear about it. Andujar stated he heard nothing
further about this matter until approximately 2007.
From this point (late 2004 to early 2005) forward, we did not identify any further interaction or activity
between Garcia and the City Collector regarding his tangible tax account until the spring of 2006.
3. Settlement of the Garcia Enterprises’ Account in May 2006

As noted above, Scott Hammer obtained a summary judgment against Garcia Enterprises in August
2005, and subsequently placed an execution lien on Garcia Enterprises property at 559 Cranston
Street, Providence on January 10, 2006.
a. John Cicilline’s Representation of Nelson Garcia and Garcia Enterprises
Subsequent to the lien placement, in approximately April 2006, Ceprano and Hammer apparently
entered into negotiations with John Cicilline, a private attorney representing Nelson Garcia and
Garcia Enterprises in this matter, concerning Garcia Enterprises’ outstanding tangible taxes. This
appears to be John Cicilline’s initial involvement in this matter, based on interviews conducted,
and our examination of the court file for this case, which does not indicate any prior
representation by John Cicilline of Garcia relative to previous legal actions in the case.
It is not clear how John Cicilline came to represent Garcia, due to conflicting statements and
information gathered. KPMG’s ability to fully make this determination was also limited by our lack
of direct access to John Cicilline and Nelson Garcia. Garcia through his attorney refused our
request for an interview. While John Cicilline through his attorney also did not agree to meet with
16
The $25,000 payment was applied in the following manner: $23,349.89 was applied to the 1997 tax year bringing the balance on that account to $0 and $2650.11 applied to the
1998 tax year balance. KPMG learned that this is consistent with the Collector’s Office practice to apply payment to the oldest account first, starting with the interest then applying it to
the principal.
17
See attached “Request for Citizen Assistance” form, and related documentation, dated August 30, 2004, in Exhibit 9.

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us, his attorney forwarded a letter to KPMG on December 11, 2008 (“Response Letter”),
containing what he described as “John M. Cicilline’s response” to our inquiry.18 John Cicilline’s
attorney had previously requested that KPMG submit questions to him in advance of a meeting
with his client. KPMG subsequently provided a letter identifying general areas of inquiry to John
Cicilline’s attorney, but which also stated clearly that our inquiries during the requested meeting
with John Cicilline would not necessarily be limited to the areas described, but may also address
other areas as prompted by John Cicilline’s responses, or new information that might come to
KPMG’s attention in the interim.19
While KPMG has included information as provided in this Response Letter within this report, we
note that we were not afforded an opportunity to question this information or make any further
inquiries directly with John Cicilline.
Relative to his retention by Garcia, John Cicilline in this Response Letter indicates that he was
contacted by phone by Nelson Garcia in late spring of 2006, and during a subsequent meeting
with Garcia, learned that Garcia had been referred to him by Andrew Andujar. In this Response
Letter, John Cicilline indicates that prior to this phone call he “did not know, nor had he ever
heard of, Mr. Garcia.”20
In addition to this information, KPMG learned that in approximately September 2005, John
Cicilline represented Miguel Garcia and Garcia’s Bar and Grill in hearings before the Providence
Board of Licenses, regarding activities of concern at this business, which held a City liquor
license. It is our understanding that Miguel Garcia is Nelson Garcia’s brother. Based on this
representation, it appears possible that John Cicilline came to represent Nelson Garcia through
his prior business relationship with Miguel Garcia, although this was not indicated by Cicilline in
his Response Letter.
During our interviews of City employees, we gathered conflicting information regarding how John
Cicilline came to represent Garcia in this matter. Rita Murphy, currently Mayor Cicilline’s Deputy
Chief of Staff, who was Director of the Office of Neighborhood Services in 2006, indicated that
Andrew Andujar told her in 2006 that he referred Garcia to John Cicilline for assistance with his
delinquent tangible taxes. Andujar denied this, however, and stated that while he previously
suggested to Garcia that he retain a tax attorney, he did not know how John Cicilline came to
represent Garcia in the tangible tax matter. Andujar indicated he was aware that John Cicilline
had represented Miguel Garcia relative to Garcia’s Bar & Grill, and surmised that Miguel may
have referred his brother Nelson to John Cicilline.
KPMG did not locate any documents or other evidence to be able to independently determine the
exact nature and timing of John Cicilline’s representation of Garcia in this tax matter.
b. Settlement Amount
Documentation and related notations in the City Collector’s Office Garcia Enterprises file21
indicate that a settlement on the account was at least initially contemplated in late April 2006, and
then apparently agreed to on May 9, 2006. Documentation located in the Office of Neighborhood
Services also contains notations reflecting settlement discussions at this time.
The Collector’s Office file contains a printout of a duplicate 2005 tangible tax bill for Garcia
Enterprises, which appears to have been printed on April 23, 2006.22 This duplicate bill contains
18
See attached letter to KPMG from Vincent A. Indeglia dated December 11, 2008, in Exhibit 10.
19
See attached KPMG letter to Vincent A. Indeglia dated November 17, 2008, in Exhibit 11.
20
Letter to KPMG from Vincent A. Indeglia, p. 1.
21
A copy of this file was obtained from Matt Clarkin, Acting City Collector. It is our understanding that this file had been located by Collector’s Office staff in City Collector Ceprano’s
office. While the file containing original documents had previously been turned over to the Rhode Island State Police per their request, the Collector’s Office retained a complete copy
of all documents in the file.
22

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handwritten notations that appear to be settlement terms written by City Collector Ceprano.23 The
terms indicate the requirement of an immediate payment of nearly $40,000, to cover 2005 current
taxes and a portion of prior year taxes. They also indicate that there would be an unspecified
adjustment on prior year’s interest owed, that Garcia Enterprises’ 2006 tax bill would be paid
quarterly, and that $2,000 per month would be paid against remaining taxes owed. These
handwritten terms do not mention the lien on Garcia Enterprises’ property.
Also within the file is a mortgage approval letter from Regional Financing Co., LLC to Felix Garcia
that appears related, as its timing and related mortgage amount closely matches the settlement
terms noted above. The letter itself is undated, but indicates approval for a 2nd mortgage to
Garcia in the amount of $40,000, along with an indication that the offer was valid through April 28,
2006.24
The notations within the Office of Neighborhood Services’ (ONS) documentation are consistent
with the above information, and provide some additional detail. These notations, which were
made by Rita Murphy, indicate that a settlement was discussed in which Garcia Enterprises
would receive an abatement of approximately $22,000 of interest on tangible tax owed, bringing
the total amount owed from $102,000 to $80,000. In return, Garcia Enterprises would pay the
City slightly more than $42,000 (approximately $3,000 of which related to real property taxes),
and then pay $2,000 per month for twenty two (22) months.
These notations indicate that there would either be a temporary release or revision of the lien in
place, in order to adjust the amount of the lien to reflect the payment of approximately $42,000 as
proposed. It is also noted that if Garcia Enterprises did not follow through with payment of $2,000
per month for 22 months, the City could revert to ask for the full amount due, including the
$22,000 of interest that was to be abated in the settlement.
These notations also reflect an intention by Garcia Enterprises, as discussed above, to seek a
refinancing to obtain the funds to make the immediate payment of slightly more than $40,000.
There is an additional notation related to this, indicating that “Hammer wants to see closing
documents,” apparently in reference to this refinancing.
Finally, the notations in the ONS documentation contain references that Garcia Enterprises
apparently owed money to some of its employees, but it is unclear what the significance of that
issue may have been to the settlement.
We also noted that on April 27, 2006, City Collector Ceprano forwarded an email to City
Collection Attorney Scott Hammer, indicating his willingness to settle the Garcia Enterprises’
account for $80,000. This appears consistent with the above settlement as described in both the
Collector’s Office file and the ONS documentation. Ceprano in this email further instructed
Hammer that he “may contact John Cicilline, attorney for Garcia to settle this account.”25 Just
over a week later, on May 5, 2006, Ceprano emailed Hammer stating that Hammer was
authorized to settle the Garcia Enterprises account for $75,000.26
This settlement amount appears to have been memorialized, at least in part, by Ceprano on
another copy of a duplicate 2005 tangible tax bill for Garcia Enterprises, printed on May 9, 2006.
This document, which was also located in the Collector’s Office’ Garcia Enterprises file, includes
handwritten notations indicating a settlement of $75,000 for 1998-2005 and the term “Payment-in-
full.” This document appears to have been dated and initialed by Ceprano. Similar to the above,
this document does not contain any notations regarding the lien.
23
The handwriting on this 2005 duplicate tax bill appears similar to another duplicate tax bill in the file which notes the ultimately agreed to settlement amount of $75,000. This latter
document appears to have been initialed and dated by Ceprano.
24
25
See Exhibit 14.
26
See Exhibit 15.

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Both Ceprano and Hammer advised KPMG they did not recall earlier settlement discussions
related to a payment of $40,000, and relative to the ultimate settlement amount, could not explain
the reduction in settlement amount from $80,000 to $75,000, other than that it may have been
due to negotiation.
Ceprano did not specifically recall discussing the Garcia Enterprises settlement with his
immediate supervisor, Alex Prignano, the City’s Director of Finance at the time, or any other City
official, prior to agreeing to the settlement. Ceprano indicated that he had a good working
relationship with Prignano, and that they would discuss collection matters routinely. Ceprano also
advised that he would copy Prignano on certain settlement agreements, and relative to the Garcia
Enterprises matter, it was noted that Prignano was copied on the above referenced email from
Ceprano to Hammer on April 27, 2006, where Ceprano expresses a willingness to settle the
matter for $80,000. Prignano did not recall any discussions with Ceprano regarding the Garcia
Enterprises matter in April 2006, and indicated that his earliest recollection of the matter was
when Ceprano approached him after the May 9, 2006 settlement had been made.
It was Ceprano’s recollection that he likely determined the $75,000 settlement amount during a
meeting with John Cicilline in Ceprano’s office. Ceprano advised that his earliest independent
recollection of the Garcia Enterprises matter was when John Cicilline came to his office in May
2006. Ceprano could not recall earlier discussions with John Cicilline, as inferred by the April
email cited above. Ceprano thought it possible that John Cicilline may have approached him
about the Garcia Enterprises matter in April, but he didn’t recall speaking with him prior to the
meeting in Ceprano’s office in May.
The ONS documentation reviewed included a note indicating Rita Murphy may have spoken with
John Cicilline regarding the settlement on or about May 3, 2006. Murphy stated that she could not
recall the nature of the discussion, other than to say that she assumed it concerned the
settlement that was being discussed.
According to Ceprano, during that meeting, John Cicilline advised Ceprano that he was there on
Garcia Enterprises’ behalf, to inquire about getting the City’s lien lifted from Garcia Enterprises’
property. Ceprano recalled that he told John Cicilline that he couldn’t lift the lien on the property
without a substantial payment on the account. Ceprano indicated that he probably reviewed
Garcia Enterprises’ account during this meeting, and made a settlement determination based on
the amount outstanding, the payment history on the account, including the amount of payments
and their application (towards principal or interest), and his understanding of what Garcia
Enterprises was trying to accomplish.
Ceprano indicated that generally when he negotiates a settlement for delinquent taxes, his
primary goal is to collect the tax dollars owed to the City. In that regard, he stated, he may reduce
penalties and fees accrued as a result of the delinquency, in order to collect the principal tax
dollars owed. At the time of the settlement, in May 2006, Garcia Enterprises owed approximately
$102,000, which included principal tax owed of about $67,000, and interest of approximately
$35,000.27 A settlement for $75,000 would have constituted a full payment of the principal tax
owed at that time, along with approximately 22% of actual interest owed (hence a reduction of
approximately 78% in interest owed).
The City Collector’s Office policy indicates that “the reduction or elimination of any penalties or
interest on delinquent tax payments is solely at the discretion of the City Collector,” and cites a
number of considerations on which that decision is based, including payment history, reason for
delinquency, etc.28
27
The 2005 tax bill shows that Garcia Enterprises owed $4011.60 in tax and $441.28 in interest for the 2005 tax year. The amount due for prior tax years is listed as $63,364.03 and
the interest due is $35,268.69.
28
See “Policy on the Forgiving of Penalties and Interest on Delinquent Tax Payments,” City of Providence, RI, attached as Exhibit 16.

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The City’s Municipal Code, which in contrast to the above more clearly delineates an approval
role for the Finance Director, indicates the following relative to determinations regarding interest
on taxes owed:
“The city collector, subject to the approval of the finance director, is hereby authorized and
empowered in his discretion to compromise interest which may be due on overdue and
unpaid taxes or other assessments whenever such compromise appears to be in the best
interests of the city. The authority hereby vested in the city collector shall apply to interest on
taxes already assessed or to be assessed from time to time. Such action by the city collector
shall not be deemed to be inconsistent with the provisions of the annual resolution ordering
the assessment and collection of taxes in the city, and providing penalties in accordance with
General Laws, chapter 36, section 1.”29
Information collected during our interviews with City Collector’s Office personnel about the
handling of settlements on delinquent taxes was consistent with the above cited policy, and
Ceprano’s statements. These personnel indicated that it was not unusual for the City Collector or
his supervisory staff to settle outstanding delinquent tax accounts, and that there was not a
defined policy for settling a delinquent tax account, relative to the amount. They stated that it was
typically a judgment call to be made by the Collector’s office in order to settle the account in the
best interest of the City. Marc Castaldi, the current Deputy Tax Collector, indicated that common
practice in the office for settlements was to seek payment of the principal amount plus
approximately 25% of the accumulated interest.
Regarding the settlement amount, Scott Hammer could not recall specifically how it was
determined to be $75,000. He indicated that his practice was to check with Ceprano regarding
account settlements, and he speculated that while he may have been contacted directly to settle
the account, he would have reached out to Ceprano in order to obtain approval for a settlement.
c. John Cicilline’s Check and the Lien Discharge
Cicilline’s Original Check
Ceprano related to KPMG that, on or about May 9, 2006, in a meeting with John Cicilline, Cicilline
presented a check from his law office account made to the City of Providence in the amount of
$75,000. The check was presented by John Cicilline in relation to the settlement agreement
reached by him on behalf of his client Garcia, regarding the past due tangible taxes owed to the
City of Providence by Garcia Enterprises. The check was dated May 9, 2006, and contained a
notation in the memo line “Settlement 1998 - 2005 #99155320” (99155320 is Garcia Enterprises’
tangible tax account number).30
Ceprano recalled that during the above referenced meeting with John Cicilline to discuss the
Garcia Enterprises account, Cicilline offered to provide this check in return for the City’s
agreement to lift the lien on Garcia Enterprises’ property at 559 Cranston Street. Ceprano
advised that the understanding with John Cicilline was that the City would remove the lien and
hold Cicilline’s check as “collateral,” until Garcia was able to complete a re-financing of this
property, and pay the $75,000 to the City from the proceeds.
Scott Hammer also apparently participated in this meeting with Ceprano and John Cicilline by
phone (as described below), and affirmed to KPMG Ceprano’s understanding of the purpose of
the check, and the agreement to lift the lien. Similarly, all other City of Providence personnel with
whom we spoke who later became aware of this matter have stated that they also understood this
to be the purpose of the check.
Both Ceprano and Hammer indicate that this agreement regarding acceptance of John Cicilline’s
check, the lien discharge, and Garcia’s prospective re-financing was not documented, and KPMG
29
City of Providence Municipal Code, Section 21-4, Authority to compromise interest on overdue taxes, assessments. See attached Exhibit 17.
30
See check copy, Exhibit 18.

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did not locate any contemporaneous documents that addressed or otherwise acknowledged
these terms.
Both Ceprano and Hammer described the acceptance of the check and the agreement to
discharge the lien as unusual. Ceprano stated that he had never previously accepted a check as
“collateral” from a taxpayer’s attorney, and that it was his typical practice, in similar circumstances
where an official action would be prompted (such as the lifting of a lien, or reinstatement of a
business license), to require payment in certified funds prior to completion of the action. John
Cicilline’s offer of the check prompted Ceprano during their meeting to call Hammer to include
him in the discussion, by placing him on speakerphone. Ceprano indicated that while Hammer
questioned John Cicilline as to “why Cicilline would want to put his own money at risk,” Hammer
ultimately advised Ceprano that, “although unusual, the arrangement would be okay.”
Ceprano stated he accepted the check and this agreement based on Hammer’s approval, and his
thought at the time that there was no risk associated with this agreement, in that if Garcia was
unable to obtain financing, the City could still deposit John Cicilline’s check.
Ceprano did not recall discussing the acceptance of the check with anyone besides Hammer.
Alex Prignano, Ceprano’s supervisor, similarly advised that he was not aware of the check
provided by John Cicilline until some time following Ceprano’s acceptance of the check and the
settlement agreement.
In our interview, Hammer’s recollection of the discussion regarding the check varied, although he
ultimately confirmed that he did advise Ceprano he approved of the arrangement. He initially
recalled that he thought it crazy for John Cicilline to offer to put up personal funds for his client,
and that he advised Ceprano that accepting the check was not the best idea. On further
reflection, in his discussion with KPMG, he indicated that he may have actually suggested that
John Cicilline provide a check on Garcia’s behalf, as a way for Hammer and the City to become
more comfortable with Cicilline’s request to have the lien removed. Hammer explained that he
suggested this in order to protect his client and to have a guarantee of payment. While he
acknowledged that John Cicilline’s check was not actually a guaranteed payment, he indicated
that he was comfortable with the situation because the check was from an attorney, and the fact
that the attorney was well known and was the Mayor’s brother.
Hammer explained that a check from an attorney was important to him in that he viewed the risk
of an attorney passing a bad check as considerably less than that of a taxpayer, in that an
attorney would also face ramifications relative to his or her license to practice law. He also
indicated that while he had never previously dealt with John Cicilline, he understood him to be a
long standing, reputable attorney, and that as the Mayor’s brother he thought Cicilline would have
additional motivation to act in good faith relative to the oral agreement.
Hammer did indicate that he had never previously, in his work on other tax collection matters for
the City of Providence, accepted a check from an attorney, or from a taxpayer, where he agreed
to hold the check as “collateral” in the manner described above relative to the Garcia Enterprises
matter. He recalled that while he may have accepted checks from taxpayers requesting that the
check be held a few days prior to cashing, these circumstances were rare, and did not involve
any associated action on liens.
The Policies and Procedures of the City Collector’s Office do not address the form of payment
required relative to collecting tax payments, timely or delinquent. There is a policy on bounced
checks, which infers acceptance of personal checks on a routine basis, and Collector’s Office
personnel did advise that personal checks are accepted for routine, mailed tax payments, and for
current year tax payments made in person to tellers in the Collector’s Office. The Collector’s
Office has a posted policy near the teller windows that clearly indicates personal checks are not
accepted for payment of prior year taxes. KPMG was advised by the Assistant Tax Collector that
this only pertains to taxpayers making payments in person to the tellers, and that it does not apply
to collection matters that have been turned over to an outside collection agency or attorney.

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Relative to this specific instance concerning Garcia Enterprises, Collector’s Office personnel,
consistent with Bob Ceprano’s statement, indicated that it was not their practice to accept an
attorney’s check as collateral on behalf of a third party taxpayer, and further could not recall any
other circumstance where an attorney’s check was presented or accepted in this manner.
John Cicilline, in the Response Letter provided by his attorney, provided an account of the
circumstances regarding the check that differed significantly from Ceprano’s and Hammer’s
recollections. John Cicilline recalled that discussion regarding the check occurred during a phone
call with Ceprano in late April or early May 2006, after Cicilline had earlier requested on Garcia’s
behalf that the lien be lifted. Per John Cicilline, Victor Beretta, an attorney with whom he shared
office space, also participated in the call, initially unbeknownst to Ceprano. It is not clear from
John Cicilline’s recounting why Beretta took part in the call, or what role if any he had relative to
Cicilline’s representation of Garcia. Cicilline’s recounting of the conversation regarding the check
is as follows:
“In this same conversation Mr. Ceprano told Mr. Cicilline that if the City were provided a
check for $75,000 as surety for the payment of taxes, Mr. Ceprano could see his way clear to
releasing the lien for the purpose of allowing the refinance. Mr. Cicilline said he would talk to
his client about getting a check to post to the City to be cashed after the refinance.
At that point in time, Mr. Ceprano stated that he did not want a check from Mr. Garcia. He
said he would take a check from John Cicilline and hold it and not cash it. Mr. Cicilline was
shocked. Mr. Cicilline inquired as to why he would give a check, drafted on his account, for
taxes owed by his client. Mr. Ceprano stated that he (Mr. Ceprano) would feel more confident
that the bill would get paid if John gave the City a check for $75,000 to hold. John responded
by laughing and saying:
“I’ll do it but I don’t have that kind of money in my account.”
Ceprano said that was okay because he would just be holding the check until Garcia
refinanced and paid the City. Again John laughed and said:
“That’s fine, but don’t try to cash my check if I write it for $75,000 because I’m broke. You
would be lucky if I had $2,000 to $3,000 to my name.”
John went on to express that his account had never had that kind of money in it. Mr. Ceprano
responded by saying that was fine; the City would not cash the check; it would simply buy
some time for John’s client to refinance. At this point during the conversation Victor Berretta
(sic) spoke up and said words to the effect that, “That makes absolutely no sense. Why in the
world would you do that?” speaking to both Misters Cicilline and Ceprano.
Mr. Ceprano then stated: “Who is that”? Mr. Cicilline identified Victor Berretta (sic) as an
Attorney in his office. Mr. Ceprano then re-stated, this time directly to Mr. Berretta (sic), that
John’s check was just so they would have “something” and it would be able to “buy some
time” for Garcia to get re-financed to pay his bill. Mr. Berretta (sic) again stated that it still
made no sense to him. In fact Mr. Berretta (sic) stated, “If John wants to give you a check
that has no money behind it that’s his business, but it’s ludicrous that the City would take it,
but you guys do what you want.”
Mr. Hammer was not a part of these discussions. Mr. Cicilline is not sure as to when Mr.
Hammer became involved in the discussions, but he believes it was in the summer of 2006
when inquiries were made by Mr. Ceprano as to when the refinance was going to be
accomplished. Mr. Cicilline believes that at some point the check 4155-9153 was delivered to
Scott Hammer to hold. He also recalls having a discussion with Scott Hammer where Mr.
Cicilline said that the check was no good; that there was little to no money in the account;
that the check was not to be cashed; that it was only given because Mr. Ceprano said it
would buy some time for Mr. Garcia to refinance his building. Mr. Hammer said that was his

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understanding as well.”31
The Lien Discharge
Per the agreement with John Cicilline discussed above, Scott Hammer filed a Discharge of Lien
with the Providence Recorder of Deeds on May 9, 2006,32 at approximately 1:40PM, and the lien
on 559 Cranston Street was subsequently lifted.33
Hammer advised during his interview with KPMG that it was not his practice to discharge a lien
without receiving payment in full in a tax collection matter. He further stated, relative to other
collection matters that he handled on the City’s behalf, that he could not recall a similar
circumstance where he agreed to remove a lien without actual payment of funds.34
Per Hammer, a refinancing can and usually does occur without having to discharge the lien prior
to the closing of the associated loan. Hammer indicated that typically, a prospective refinancing
transaction would proceed to a loan closing where the closing attorney would ensure that lien
holders on the property would be paid from the loan proceeds prior to the advancement of any
loan funds to the property owner.
Hammer stated that in this instance involving Garcia’s prospective refinancing, he and Ceprano
were advised by John Cicilline that Garcia was seeking to refinance his property through a private
lender who was not willing to proceed with the loan transaction without discharge of the lien prior
to closing. Hammer indicated that while not typical, he had in unrelated circumstances
encountered private lenders who were similarly uncomfortable proceeding to loan closing without
prior lien discharge.
Neither Hammer nor Ceprano could recall if John Cicilline identified the private lender involved, or
whether the lender was identified as a business or an individual.
As Hammer indicated above, he was comfortable with the circumstances of the agreement,
including the lien discharge, due to the fact that he was to receive a check from John Cicilline that
could be deposited if the refinancing did not occur.
The Office of Neighborhood Services documentation regarding Garcia Enterprises contains
notations that appear to pertain to the release of the lien. These notations, made by Rita Murphy,
apparently in April or May of 2006, make reference to the initial settlement discussed requiring
$2,000 per month from Garcia Enterprises, and note “can’t agree because Hammer has a lien on
ppty.” The same page also carries a note indicating “Ceprano/release of lien.”
Ceprano explained in his interview that neither he, nor the Collector’s Office was responsible for
placing or removing liens, and that this was the responsibility of the City’s Collection Attorney,
Scott Hammer. Ceprano further clarified that he was okay with this aspect of the agreement
based on Hammer’s approval, and his judgment that there was no risk involved in the transaction.
4. Internal City Administration Discussion re Garcia Enterprises Matter, May 2006 to November 2006
Following the agreement with John Cicilline on Garcia Enterprises’ account in early May, 2006,
Ceprano forwarded Cicilline’s check to Scott Hammer. Hammer was apparently to hold the check per
the agreement in expectation of Garcia completing the re-financing of the property. On June 27,
2006, Hammer forwarded the check to Alex Prignano, indicating in the accompanying transmittal
letter that he was doing so at Prignano’s request, stating that he had enclosed the check from John
31
Letter to KPMG from Vincent A. Indeglia, p. 2-4.
32
See Discharge of Lien in Exhibit 19.
33
See Recorder of Deeds printout in Exhibit 20.
34
In an effort to confirm Hammer’s statement, KPMG reviewed available court filings for tax collection cases filed by Hammer on the City’s behalf in Providence Superior Court, dating
back to 2001. We reviewed the docket sheets of more than seventy (70) case files to identify instances in these cases where liens were executed, and then conducted further review
of the case files and related public records to determine if any of these liens had been discharged without actual payment. Of twelve (12) cases handled by Hammer on the City’s
behalf where a lien was executed, only the Garcia Enterprises case involved the discharge of the lien without payment of the judgment amount.

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Cicilline that “was being held in my office as payment on the above account (Garcia Enterprises).35
Hammer advised that he thought that he had sent the check to Prignano due to his frustration at not
being able to collect on the account. Prignano did not recall receiving the check from Hammer,
indicating that his earliest recollection of the Garcia Enterprises matter occurred when Ceprano
approached him to advise him of the circumstances of the agreement and to express his concern that
John Cicilline was not being responsive to Ceprano’s inquiries as to when Garcia would pay the
agreed upon $75,000.
The exact timing of Prignano’s discussion with Ceprano about John Cicilline’s lack of response is
unclear, but based on interviews conducted appears to have occurred at some point in June or July,
2006. Prignano indicates that in response to Ceprano’s concerns, he suggested that Ceprano speak
with Rita Murphy, the then City’s Director of the Office of Neighborhood Services (ONS), as Murphy
regularly dealt with constituent issues, including tax matters, and might be able to help move the
matter forward.
The timing and nature of discussions that were held with Rita Murphy, and subsequently with other
City Administration officials, as discussed here, are largely based on interviews conducting during this
engagement. No documentation, including meeting notes, memoranda, or emails was located that
directly described or confirmed the exact timing of meetings or informal discussions, the specific
nature of the discussions, or the identification of all of the participants in these discussions. Certain
email documentation and other documents from the City Collector’s office, and from Scott Hammer,
that were reviewed by KPMG did provide some contextual information that was helpful to roughly
determine the timing and nature of certain of the discussions. Any such document is appropriately
referenced below.
It should also be noted, relative to interviews conducted, that at times individual recollections about
these discussions amongst City officials differed, relative to the timing and nature of the discussions,
and as to participation. To the extent there were substantive differences, or recollections were
contradictory, we have attempted to identify these instances below.
Ceprano, possibly with Prignano, approached Murphy prior to mid August 2006 to discuss the matter
and John Cicilline’s and Garcia’s lack of response. Murphy, who was aware of the prior settlement
discussions, and John Cicilline’s involvement, indicated that she assisted Ceprano by attempting to
reach Cicilline herself, but was not initially successful.
Murphy was also asked by Ceprano to assist in obtaining documentation of Garcia’s attempts to re-
finance, such as a mortgage pre-approval letter. Murphy eventually learned that Garcia’s initial
attempt to re-finance his property was unsuccessful, but also that he was making a second attempt to
re-finance. Murphy advised KPMG that she did obtain a pre-approval letter, possibly faxed to her
directly from Garcia, in late June 2006.36
Murphy and Ceprano both agreed that they together discussed depositing the check. Murphy
indicated that she advised Ceprano to hold the check, to allow Garcia time to complete the second
attempt to re-finance.
Documents reviewed indicate that on or before August 16, 2006 there were apparently discussions
between Hammer, Ceprano, Prignano and Cicilline regarding depositing the check. On this date,
Scott Hammer forwarded an email referencing “Garcia 99155320” to Ceprano, indicating as follows:
“Pursuant to our meeting with Alex Prignano and our teleconference with John Cicilline, attorney
for the taxpayer, I am going to be depositing the check from John Cicilline, on Friday Aug 18th,
35
See Exhibit 21.
36
We obtained a copy of 2 of the 4 pages of this pre-approval letter, apparently from Bayview Financial, from the City Collector’s Garcia file. Based on the markings on the document,
it appears that this document, which appears to be dated between June 20 and 27, 2006, was faxed from the City’s Office of Neighborhood Services (ONS) on June 27, 2006. It is not
clear to whom this document was faxed, but it appears, based on its location within the Collector’s file, that this pre-approval was the supporting paperwork cited by John Cicilline in an
August 16, 2006 letter to Ceprano discussing Garcia’s re-financing attempts. See attached Exhibit 22.

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2006 unless otherwise instructed.”37

On the same date, John Cicilline forwarded a letter to Ceprano, stating that his client Garcia was in
the middle of re-financing his property and that upon receipt of the money he would pay the $75,000
to the City for the back taxes owed. Cicilline’s letter, which also enclosed some supporting paperwork,
was located in the City Collector’s Garcia Enterprises file. The referenced supporting paperwork
appears to be the same Bayview Financial pre-approval letter that was apparently provided to Rita
Murphy by Garcia in June 2006, as discussed above.
This paperwork consists of 2 pages (of an apparent original 4, based on markings and references on
the documents), including a transmittal letter from Bayview Financial to Garcia, and a Title Preference
Form. The transmittal letter advises of an attached Conditional Pre-Approval letter outlining the terms
of the loan for which Garcia was approved, but this Pre-Approval was not located in the Collector’s
file. As a result, we do not know the amount or related terms of the loan for which Garcia appeared to
have been pre-approved at this time.
It is not clear as to whether John Cicilline’s letter to Ceprano was prompted by the apparent intent to
cash the check, but on August 21, 2006, Hammer forwarded another email to Ceprano, referencing
“Garcia/Cicilline” and stated:
“Pursuant to recent telephone messages and our phone conversation today, I am holding the
Garcia/Cicilline check, indefinately (sic), until further notice. As I have advised over the course of
this matter, every day that goes by potentially weakens the City's position in a number of
respects.”38
Shortly following this communication, on September 1, 2006, Hammer again returned John Cicilline’s
check to the City, this time to Ceprano (as noted below, Ceprano redelivers the check to Hammer in
November 2006).39
At some point no later than August 2006, Rita Murphy, possibly with Bob Ceprano and Alex Prignano,
informed Chris Bizzacco, the Mayor’s Chief of Staff, of the Garcia Enterprises settlement agreement
and John Cicilline’s role in the agreement, including his provision of the $75,000 check.40 Bizzacco
recalled that during this discussion he was also informed that it had been determined that John
Cicilline’s account had insufficient funds to cover the $75,000 amount.
It is unclear as to the specific timing when it became known that John Cicilline’s account had
insufficient funds to cover the check. Scott Hammer indicated to KPMG that on several occasions
after receiving the check, he visited Fleet Bank, where he also maintained accounts, and inquired as
to whether Cicilline’s account held sufficient funds. On each occasion, he was informed by bank
personnel that the account did not have sufficient funds. Hammer explained that he never attempted
to cash the check, but also indicated that if on any of these occasions there had been sufficient funds,
he would have deposited the check. Hammer stated that he did not attempt to cash the check on
these occasions knowing there were insufficient funds because the check was from the Mayor’s
brother and Hammer perceived that in his work on behalf of the City relative to Collection matters, he
was ultimately working for the Mayor.
Hammer indicated that he advised Ceprano regarding the insufficient funds in John Cicilline’s account
at the time he first learned of this status. Ceprano’s recollection was that this occurred in October or
November of 2006, but it appears likely based on Hammer’s and others recollection that Ceprano
was notified of this much earlier.
37
See attached Exhibit 23. This communication implies that Hammer is now again holding the check, which he previously forwarded to Prignano in late June 2006. Neither Prignano
nor Hammer could recall the circumstances relating to Hammer taking possession of the check again.
38
39
40
While Rita Murphy and Chris Bizzacco agree that Murphy first informed Bizzacco of the Garcia Enterprises matter, their recollections differ with regard to timing. Murphy recalled
advising Bizzacco shortly after she became aware of the Garcia matter through Andrew Andujar in the spring of 2006. Bizzacco did not believe that he was informed by Murphy prior
to August 2006. This distinction does not appear to be of great significance, in that Bizzacco’s interaction with others involved in the matter appears to have occurred later in 2006,
and we did not note any substantive issue that appeared to be impacted by the exact timing of when Bizzacco first learned of the Garcia matter.

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Rita Murphy recalled attending a meeting at some point between Ceprano, Hammer and John
Cicilline where Cicilline stated words to the effect of “there wasn’t any money in the account, anyway.”
Murphy also thought that Hammer followed up after the meeting to confirm Cicilline’s statement with
the bank. Both Hammer and Ceprano denied that Cicilline ever directly told them there were
insufficient funds in the account in such a meeting, and maintain that Hammer initially learned this
through his inquiries at the bank.41 Ceprano stated that if John Cicilline had said from the start that
there were insufficient funds, he would have said, “See you later, John.”
As noted above, John Cicilline in his Response Letter indicates that he stated to Ceprano in the initial
discussion about the check that he was broke and didn’t have that kind of money in his account.
Chris Bizzacco thought that Ceprano and Murphy informed him of the Garcia Enterprises matter
because they were seeking advice as to how to proceed, in that Garcia’s re-financing had not
occurred and the matter seemed at a standstill. Bizzacco indicated that he thought the matter
problematic, and did not think that it was a good idea that John Cicilline was involved. He further
stated that it was not good protocol for the City to lift a lien “without knowing if the money was there.”
Bizzacco also advised that he thought he should have been informed of this issue before the check
from John Cicilline was accepted.
Bizzacco indicated that upon learning of the matter, he determined that he needed more information,
wanting to know how the situation had come to this point. He recalled advising those involved in this
initial meeting “not to do anything” until he obtained more information. Bizzacco recalled that he had
subsequent discussions with Murphy, Ceprano, Prignano and also Andujar, who he learned had also
been involved.
Bizzacco recalled that through Murphy and possibly Andujar, he inquired about the status of the re-
financing, and would hear back from them with dates that would come and go. Without resolution of
the issue, Bizzacco thought that as much as approximately 2 to 3 months passed while Garcia
continued to attempt to re-finance. Bizzacco stated that it was his suggestion to allow Garcia more
time to attempt to re-finance, and that Ceprano and others appeared to agree with this approach.
Bizzacco indicated that no one disagreed with the approach, and stated that had someone disagreed,
he would have taken that “as my asking someone to do something inappropriate.”
Bizzacco also indicated that Murphy probably instructed Ceprano not to cash the check due to his
initial instruction “not to do anything,” and his subsequent direction to allow Garcia more time to re-
finance.
Per Bizzacco, the issue lingered until it resurfaced at the time Alex Prignano was preparing to retire
as Finance Director, in September 2006 (Prignano’s last day was October 13, 2006). During a
transition meeting with John Simmons, the City’s Director of Administration and his direct supervisor,
Prignano informed Simmons of the Garcia Enterprises matter. Ceprano and Matt Clarkin, another
member of the City’s Finance Department who became Acting Deputy Finance Director on Prignano’s
departure, may also have attended this transition meeting.
According to participants in this meeting, the discussion regarding the Garcia Enterprises matter was
informational in nature and no decisions were made at this time regarding how to proceed. According
to several interviewees, shortly thereafter, Simmons apparently convened another meeting to discuss
the issue, involving at least Bizzacco and Murphy, and possibly Ceprano. During this meeting, which
would have taken place around if not after Prignano’s departure on October 13, 2006, there appears
to have been discussion regarding the fact that John Cicilline’s check would soon be “stale dated”
(Rhode Island Uniform Commercial Code indicates that banks are not obliged to pay a check
presented more than six months after its date of issuance).42
During or following this discussion, it was apparently decided that the City would pursue obtaining a
41
As described in a later section of this report, Hammer did state that much later, in a chance meeting at Superior Court, Cicilline informed Hammer that there were no funds in his
account.
42
Rhode Island General Laws Section 6A-4-404 (Uniform Commercial Code, Bank Deposits and Collections). See attached Exhibit 26.

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replacement check from John Cicilline, as well as a written agreement, the terms of which would
require that a lien be placed on Garcia Enterprises’ property at 559 Cranston Street, and that Cicilline
would provide a replacement check, to be held by the City for sixty (60) days and thereafter
deposited. This agreement (hereinafter referred to as the “Agreement”) is discussed more fully in the
following section of this report.
According to Bizzacco, following this discussion regarding the Agreement, he and Simmons mutually
agreed that they needed to let Mayor Cicilline know about the Garcia Enterprises matter. Bizzacco
advised that they did not formally set a meeting to discuss this with the Mayor; rather they walked into
the Mayor’s office on an impromptu basis and met with him for no more than ten (10) minutes to
discuss the matter.
Simmons does not recall discussing the Garcia Enterprises matter with Mayor Cicilline. Simmons
advised that this was not something he would have discussed with the Mayor, but that because
Bizzacco and Murphy were involved he “thought the Mayor would have known.”
In the meeting with Mayor Cicilline, Bizzacco recalled describing the situation to the Mayor, and
advising him that “we’re going to fix it.” He recalled the Mayor reacting to the description with words to
the effect of, “Why would he do something like that?” and that the Mayor may also have inquired if
Bizzacco or Simmons had spoken with his brother. Bizzacco could not recall if the Mayor indicated
that he planned to speak with his brother about the matter.
Bizzacco explained that the Mayor did not offer any instructions or provide direction as to how to
handle the matter, likely due to Bizzacco’s representation that it was being addressed and that it
would be “fixed.” Bizzacco indicated that his representations that the matter would be fixed meant that
action would taken to appropriately resolve the situation and collect the back taxes. Bizzacco also
stated that neither he nor Simmons specifically discussed cashing John Cicilline’s check with the
Mayor in this meeting.43
Bizzacco could not recall if the Mayor asked him to keep him informed about the matter going
forward, but stated that this was his only conversation with the Mayor about this matter, and that the
Mayor never subsequently raised the issue with him.
Mayor Cicilline indicated he had no memory of a conversation with Chris Bizzacco about the Garcia
Enterprises tax matter, and advised that it was first brought to his attention in September 2008 by his
current Chief of Staff, Deborah Brayton, following news reports of the matter. The Mayor further
stated that he was confident however that he would not have forgotten this kind of conversation,
particularly if he had been informed that his brother John was involved, or that there was concern
about a check that his brother had issued. He indicated that he was always sensitive to any City
matter involving his brother, and cited an issue, which was reported publicly in August 2006,
regarding significant outstanding parking ticket amounts owed by his brother. The Mayor indicated
that had his brother’s involvement in the Garcia Enterprises matter been brought to his attention at or
near this time, it would have been a “red flag,” and he certainly would have taken action at that time to
review what had occurred, and to ensure that the taxes owed in the matter would be secured by the
City.
None of the other City officials involved in this situation, including Ceprano, Prignano, Murphy,
Andujar or Clarkin indicated that they ever had any discussions with the Mayor regarding the Garcia
Enterprises matter.44
Regarding Bizzacco’s statements concerning discussions with the Mayor, John Cicilline in the
Response Letter forwarded by his attorney, recounted a discussion he had with Chris Bizzacco in
43
An affidavit filed by Rhode Island State Police Sgt. John D. Lemont on December 5, 2008, in connection with a Search Warrant, indicates that Christopher Bizzacco in a formal
statement indicated that he presented the Mayor with the circumstances of the insufficient funds check, and that the Mayor advised him to “see what you can do to resolve it.” See
affidavit in attached Exhibit 27.
44
Documentation from the Office of Neighborhood Services (see Exhibit 9) regarding Garcia was provided by Rita Murphy, and it contained notations that appear to have been made
in April and May 2006. On one of these documents, where John Cicilline and Nelson Garcia are mentioned, and terms of a proposed settlement are also noted, the word “Mayor” is
also written. Murphy could not recall what that reference meant, but stated that she did not speak with the Mayor about the Garcia matter at this time or at any other time.

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November 2006, which is in contrast to Bizzacco’s indication that he spoke with the Mayor about the
Garcia Enterprises matter. John Cicilline’s recounting is as follows:
“The second conversation was a conversation between Chris Bizzacco, Mr. Cicilline and Victor
Berretta (sic) at Mayor Cicilline’s annual Thanksgiving Fundraiser for the homeless. Pretty much
out of the blue in front of Mr. Berretta Mr. Bizzacco told John Cicilline that he should not ignore
the “Garcia” tax problem. John responded, “What are you talking about? I’m not ignoring
anything. Ceprano helped get the lien off so he [Garcia] can refinance and pay the bill. That’s
how I’m getting paid.”
Chris Bizzacco went on to say that John Cicilline had better get it “cleared up” or “straightened
out” by Thanksgiving, because he [Bizzacco] was trying to keep it from the Mayor. John replied,
“Why are you doing that?” Bizzacco replied, “John, you don’t want your brother to find out”. John
replied words to the effect that he was not ignoring anything and that he didn’t know why
Bizzacco cared what he did with his clients. He stated as far as he was concerned The City could
always put the lien back on if Garcia didn’t refinance. John in hindsight was a little surprised that
Bizzacco even knew about the matter because as John saw it the matter was a simple collection
matter. His client owed taxes; the City had obtained a judgment and lien. The City had removed
the lien so that Garcia could refinance the property and pay off his tax bill. Everyone was just
waiting for the refinance to occur. Because Mr. Ceprano and Mr. Hammer had suggested this
method of settlement, and requested the checks, and drafted the settlement agreement Mr.
Cicilline has assumed that the entire collection and settlement process was and is legitimate.”45
5. Replacement Check and Written Agreement

On October 31, 2006, Bob Ceprano forwarded an email to Scott Hammer, regarding an agreement
reached with John Cicilline regarding the Garcia Enterprises matter. The email, which was also
copied to John Simmons, Chris Bizzacco, Rita Murphy and Matt Clarkin, contained the subject line
“Nelson Garcia/John Cicilline” and included the following:
“John Cicilline, Attorney for Nelson Garcia has agreed to provide a replacement check for
ck.#2731, dated 5/9/2006 made payable to the City of Providence in the amount of $75,000.00.
The purpose of the check was a settlement for account #99155320 for the years 1998-2005. The
agreement for the replacement check includes a provision that the (sic) will be held by Scott
Hammer, Attorney for the City, for a period of sixty (60) days and all liens reinstated against
property in question until the debt is satisfied. This agreement will be executed no later than
November 1, 2006.”46
The agreement referenced by Ceprano in his email to Hammer was a written agreement drafted and
finalized by Hammer. Hammer recalled that he had notified Ceprano that if they were going to wait for
Garcia to re-finance, they should obtain a replacement check from John Cicilline as the first check
would be “stale-dated” by approximately November 9, 2006. Hammer advised that he drafted the
Agreement because he was just trying to do something to collect the funds, and he thought that if he
had a signed Agreement from Cicilline, then he could convince his client (the City) to move forward
with the matter.
The City successfully obtained the replacement check from John Cicilline prior to actually finalizing
and issuing the Agreement to Cicilline for signature, as the Agreement references that Cicilline had
already provided the replacement check dated November 2, 2006. The check was written on the
same account as the original check, and references “Tax payment for Nelson Garcia” on the memo
line, as well as Garcia Enterprises’ tangible tax account number.
Bizzacco and Ceprano both thought that Rita Murphy obtained the check from John Cicilline and
brought it to Ceprano. A handwritten receipt made by Hammer’s secretary indicated that she received
45
Letter to KPMG from Vincent A. Indeglia, p. 6.
46

24138BOS
both the original check (which Hammer had returned to Ceprano in September 2006) and the
replacement check from Ceprano on November 3, 2006. On the same day, Hammer forwarded to
Ceprano a draft of the Agreement for his review, which was finalized the same day without any
apparent changes and mailed to John Cicilline.
The Agreement, a copy of which is attached as Exhibit 29, reflected the terms as discussed in
Ceprano’s 10/31/06 email, and also included the following information:
• As of November 1, 2006, Garcia Enterprises owed $106,540.22 in overdue tangible taxes to the
City of Providence for the years 1998 – 2005.
• John Cicilline’s Fleet account, his “Office Account,” from which both the initial check and the
replacement check were written, “has never had sufficient funds available to cash Check.”
• Upon execution of the agreement, a lien in the amount of $111,805.42 (including 2006 tax owed
in addition to the 1998-2005 back taxes) would be placed on 559 Cranston Street, Providence,
the property owned by Garcia Enterprises.
• The replacement check provided by John Cicilline “is in full settlement of the lawsuit filed in this
matter.”
• The replacement check was to be held by Hammer’s law firm “for a period of no more than sixty
(60) days and, thereafter, Check will be deposited into Blasbalg & Hammer’s Client Account
without further reference,” and
• Once the replacement check cleared the bank, Hammer’s law firm would issue a Satisfaction of
Judgment relative to the previously filed lawsuit.
In addition, accompanying the Agreement was a one page “Lien against Real Estate,” also to be
signed by John Cicilline that indicated that the parties agreed that a lien would be placed on Garcia
Enterprises’ property as described above.
By November 17, 2006, John Cicilline had not signed the Agreement, and Ceprano forwarded an
email that day to John Simmons (copying Matt Clarkin) to advise him as such, further stating “Without
the agreement, we cannot reinstate the liens. We should address this ASAP.”47
On November 22, 2006, Hammer wrote to John Cicilline, providing another copy of the Agreement
and Lien and informing him that if the executed documents were not returned within ten (10) days of
the letter, Cicilline’s replacement check of $75,000 would be deposited on December 1, 2006, and
that “whatever action is necessary beyond that to effectuate payment” would be taken.48
In addition to Hammer’s communication to John Cicilline seeking an executed Agreement, Chris
Bizzacco also advised that he took part in the effort to obtain the signed Agreement from Cicilline.
Bizzacco indicated that either Simmons or Murphy informed him that they could not get Cicilline to
sign the Agreement. Bizzacco indicated that he did not personally give the Agreement to John
Cicilline or witness him sign it, but did recall that he called Cicilline regarding the Agreement, and the
signed Agreement was subsequently delivered to Bizzacco at City Hall, and he then forwarded the
original on to either Simmons or Murphy. The signed Agreement was ultimately delivered to Ceprano,
who recalled that Murphy brought it to him.
In his Response Letter forwarded by his attorney, John Cicilline’s recounting regarding the
replacement check and agreement differ from recollections of City officials and Scott Hammer as
described above. Also, the timing of events as recounted by John Cicilline is slightly off, in relation to
documentation reviewed and cited above. KPMG did note that the statements as recounted by
Cicilline regarding the cashing of the replacement check appear directly inconsistent with the
Agreement that Cicilline signed. This Agreement, which did acknowledge that Cicilline’s account had
47
48
See Exhibit 31.

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never had sufficient funds available to cash the check, also stated clearly that Cicilline’s check was to
be cashed after sixty (60) days. John Cicilline’s recounting is as follows:
“In Late October 2006 Mr. Ceprano contacted Mr. Cicilline to inquire about the status of Mr.
Garcia’s refinance. Mr. Cicilline advised that he had heard nothing. Mr. Ceprano told Mr. Cicilline
that Mr. Hammer wanted to speak to him regarding the May 9, 2006 check because it was “no
good”. Mr. Cicilline responded by saying that he knew it was no good and that he had continually
told both Ceprano and Hammer that it was never any good. Mr. Ceprano clarified that he meant it
was coming over 6 months old and that it would be no good to cash and that they would need it to
be, “you know, like a valid check on its face.” He was asked to call Mr. Hammer and he did. In
fact he called Mr. Hammer several times and left messages for him and did not receive return
phone calls. We want you to be aware that we are aware that Mr. Hammer has provided contrary
statements to the effect that Mr. Cicilline would not or did not return phone calls. This is
categorically untrue. Mr. Hammer never called Mr. Cicilline until after Thanksgiving of 2006 and
then only in response to Mr. Cicilline’s prior calls or at Mr. Ceprano’s urging.
Mr. Cicilline eventually met with Mr. Hammer after Thanksgiving. Mr. Cicilline does not recall all of
the details of that meeting. He does recall that Mr. Hammer wanted a replacement check. He
recalls that Mr. Hammer wanted Mr. Cicilline to sign a settlement agreement on behalf of Mr.
Garcia. The agreement was eventually drafted and Mr. Cicilline received it by fax and mail. He
signed it on behalf of Mr. Garcia and also issued a replacement check. He does not know why the
dates are a month apart, but assumes they were dated at or near the time he executed them. He
does remember saying to Mr. Hammer that he could not under any circumstance cash or attempt
to cash either check. He stated to Mr. Hammer that there was no money in the account and even
invited Mr. Hammer to check with his bank to verify that there was no money to satisfy the check.
He told Mr. Hammer that he was only providing the check because he had the assurance of Mr.
Ceprano that it would not be presented for cashing at the bank and that it was only being given
because the City would not accept Mr. Garcia’s check as surety for payment when his refinancing
occurred. In fact Mr. Cicilline had a check made out to the City from Mr. Garcia, the original of
which is still in Mr. Cicilline’s file, but Mr. Hammer and Mr. Ceprano would not take that check. Mr.
Hammer assured Mr. Cicilline that the check would never be presented or cashed.”49
Once Ceprano received the original signed Agreement, however, he never forwarded it to Hammer
for his execution. KPMG initially obtained a copy of the Agreement from the City Collector’s Garcia
Enterprises file,50 and it was noted upon review that this copy only contained John Cicilline’s
signature, and had not been countersigned by Hammer, as attorney representing the City. Prior to
speaking with Scott Hammer about this, KPMG interviewed Bob Ceprano, who stated that he had
advised Hammer that Cicilline signed the Agreement, but could not fully explain why he had not
forwarded the Agreement to Hammer. Ceprano stated that Hammer advised him at the time he was
frustrated, and did not want to spend more time on the Garcia Enterprises account without getting
paid (under Hammer’s contract with the City, he was paid a commission only on funds actually
collected). Ceprano also indicated that Hammer had expressed doubt about the effectiveness of
replacing the lien on the property, in that re-filing the lien would not get the City back to its original
position due to other liens that had been placed.51
Ceprano also stated that at this time, he felt that “he wasn’t in control of the situation, and that John
Simmons and Rita Murphy had assumed control.” Although he couldn’t be sure of the exact timing,
Ceprano recalled that in response to Hammer’s complaints about not getting paid, he initiated a
discussion with Simmons and Murphy about the issue. Ceprano stated that Simmons suggested that
Ceprano pay Hammer, by “cutting an invoice.” Ceprano indicated that he told Simmons that he did
49
Letter to KPMG from Vincent A. Indeglia, p. 4-5.
50
As recounted above, KPMG was notified upon requesting this file that the Rhode Island State Police had previously taken the City Collector’s Garcia file, containing original
documents.
51
Following the City’s discharge of lien on Garcia’s property in May 2006, a mechanics lien in the amount of $38,468 was filed on June 22, 2006 by Interior Systems of RI, related to
building materials and labor provided by Interior Systems to Garcia Enterprises. An Entry for Judgment of Default by Interior Systems against Garcia Enterprises was later denied, on
February 15, 2007, and filed with the Registry of Deeds on May 8, 2007, just prior to when Garcia Enterprises deeded the property in question to Nelson Garcia. These documents are
attached as Exhibit 32.

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not have the authority to do that and would not do that. Simmons denied ever making any suggestion
to Ceprano or anyone else that Hammer be paid, as he stated to KPMG that he believed Hammer
shouldn’t be paid given that he didn’t actually collect the $75,000.
Directly contradicting Ceprano’s version of events relative to the Agreement, Hammer subsequently
advised KPMG that he had not at the time been informed by Ceprano or anyone else that John
Cicilline had signed the Agreement. Hammer stated he only learned of this in early October 2008,
when the Rhode Island State Police had shown him the original copy of the Agreement containing
Cicilline’s signature.52 Hammer stated to KPMG that had he been aware of the signed Agreement at
the time, he would have similarly signed it, and would have attempted to proceed under the terms of
the Agreement, subject to his client’s (the City’s) direction.
Apart from the Agreement, Hammer did recall that he also checked with the bank following his receipt
of the second check from John Cicilline, in the hopes that he “might get lucky” and find that the
account held sufficient funds. This did not occur, as each time he was advised that there were
insufficient funds in the account. While he wasn’t sure of the exact timing, Hammer also recalled
seeing John Cicilline in Providence Superior Court, and advising him that he was going to deposit
Cicilline’s check. According to Hammer, Cicilline replied that he should go ahead as there was
nothing in there anyway.
Finally, Hammer advised that he was winding down his business with the City in December 2006, and
that he realized he was not going to get paid for his work on the Garcia Enterprises’ account. He
recalled a discussion with Bob Ceprano, where Ceprano advised that if we (the City) ever get paid,
you’ll get paid.
Others involved in the matter, including Simmons, Bizzacco and Murphy, do not recall that they took
any additional action on the Garcia Enterprises matter beyond December 2006. In his interview,
Simmons stated that he didn’t have an independent recollection of the Agreement or the
circumstances surrounding the Agreement, and indicated that he was taken aback to learn that the
Agreement had apparently never been provided back to Hammer for signature. Simmons indicated
that his direction in this matter was always clear, to collect the money, and stated that he never
instructed anyone not to finalize the Agreement.
Bizzacco advised that after he assisted in obtaining the signed Agreement from John Cicilline, he did
not hear another thing about the Garcia Enterprises matter, and that shortly thereafter, it fell off his
“radar screen.” Murphy’s last recollection of the Garcia Enterprises matter was when she told
Ceprano that she wasn’t interested in following up on the matter anymore. She advised that this
occurred either in late 2006 or early 2007.
Relative to the agreement, consistent with statements by Simmons, Bizzacco and Murphy, Ceprano
confirmed that upon receipt of the signed Agreement from John Cicilline, he was not instructed by any
City official or anyone else with regards to how it should be handled.
6. Garcia Enterprises Matter from January 2007 Forward

a. Events and Discussions regarding John Cicilline
On or around January 5, 2007, John Cicilline was indicted by a federal grand jury on charges of
conspiracy, making false statements and obstruction of justice, relative to an apparent scheme to
obtain $150,000 from his clients.53
Ceprano stated that after John Cicilline was indicted on federal charges, he recalled a
conversation with John Simmons during which he (Ceprano) asked about getting the collection of
the $75,000 from Cicilline, where Simmons indicated that the family had “bigger issues to deal
52
A representative from the Rhode Island State Police confirmed to KPMG that the original agreement signed by Cicilline was located in the City Collector’s Garcia file that they had
obtained from the City.
53
John Cicilline plead guilty to these charges in June 2008, and was sentenced in September 2008 to eighteen (18) months to serve in federal prison, which he began serving in late
October 2008 (“Cicilline, Bevilacqua, once prominent defense lawyers, get prison time.”, September 20, 2008, Providence Journal. See attached Exhibit 33.).

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with now.” Ceprano explained that his interpretation of that remark was that the chances of
collecting the money appeared to be “slim to none.”
Simmons recalled no such discussion with Ceprano, and indicated his last memory of the Garcia
Enterprises matter dated to roughly December 2006. From that point forward, Simmons indicated
that the matter was not brought to his attention again, so he assumed it had been addressed. He
also indicated he thought that there were measures in place related to payment of taxes and
business license renewal that would have flagged the matter going forward.54
Hammer indicated that after John Cicilline was indicted in January 2007, he figured that he was
done with this matter. Hammer explained that he did not recall a specific conversation about the
Garcia Enterprises matter after this time but thought that he probably had another discussion with
Ceprano about not getting paid relative to his work on the matter.
Ceprano also stated that his contact with Hammer was limited following 2006, in that Hammer
was being phased out as the City’s collection attorney. Ceprano indicated that he did continue to
pursue the Garcia Enterprises matter, in that when he would run into John Cicilline by chance, he
always brought the matter up to Cicilline, indicating that the matter needed to be taken care of
and that Cicilline had to get his client to pay the taxes. Ceprano recalled seeing John Cicilline at
Superior Court and raising the issue, but could not recall the timing of this event. He also recalled
seeing Cicilline at a wake in early 2008, and again pressing him regarding the taxes.
According to Ceprano, apart from the brief conversation with Simmons following the Cicilline
indictment, he did not discuss the Garcia Enterprises tax matter further with Bizzacco, Murphy or
Simmons. He also indicated that he did not discuss the matter with anyone else within
Providence City government until the matter was reported in the Providence Journal in
September 2008.
b. 559 Cranston Street: Tax Sale, Property Transfer and Re-Financing
Tax Sale
The tax title to 559 Cranston Street in Providence, the property owned by Garcia Enterprises that
was the subject of a judgment lien placed and removed in early 2006 relative to back tangible
taxes owed and at issue in this investigation, was sold at tax sale in July 2006 to Tabriz Realty, a
Lincoln, RI realty company, for $3,618.57. The property had been previously placed on tax sale
due to outstanding real estate taxes owed.
The terms of the tax sale allow the original property owner to redeem their property via payment
of back taxes owed within a year following the tax sale. On February 27, 2007, Garcia Enterprises
redeemed this property from Tabriz Realty, via payment of $4,135.91, an amount which included
interest and recording fees.55
Bob Ceprano indicated that he did not recall being aware that this property had been put up for
tax sale, as he stated that there were 400 to 500 properties placed on tax sale in 2006.
Property Transfer
On May 9, 2007, Garcia Enterprises by quitclaim deed transferred 559 Cranston Street in
Providence to Felix N. Garcia, for no consideration.56 At the time that this property transfer
occurred, neither Bob Ceprano nor other city officials involved in the Garcia Enterprises matter
were aware that it had taken place.
Re-Financing of 559 Cranston Street
On May 9, 2007, the same day of the property transfer, Felix N. Garcia re-financed this property,
54
While there are measures that prevent business license renewal for Providence businesses that owe back tangible taxes, Garcia Enterprises was not the type of business requiring
a business license from the City and hence this did not apply.
55
56

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obtaining a mortgage in the amount of $484,250.57 Based on a review of public records, KPMG
was not able to determine the actual amount of proceeds from this re-financing that were
obtained by Garcia.
Similar to the property transfer, neither Ceprano nor other city officials involved in the Garcia
Enterprises matter were aware that Garcia at this time successfully completed a re-financing of
the property.
B. Garcia Enterprises’ Connection to the Mayor, and other City Officials
KPMG attempted to determine the extent of any existing or prior relationship between Nelson Garcia and
Mayor Cicilline, and other City Officials. As such, KPMG reviewed available public records, including
news reports and related media, and also inquired regarding any such relationship during interviews
conducted. As noted previously, Garcia refused our request for an interview related to this matter.
Nelson Garcia made political contributions to Mayor Cicilline totaling $1,825 between 2002 and 2007. His
made a contribution of $250 on June 30, 2006, more than a month following the settlement agreement
over back taxes owed to the City by his company, Garcia Enterprises. He made his last contribution of
$150 on March 28, 2007.
Garcia’s brother, Miguel Garcia, also contributed to Mayor Cicilline’s campaign via two contributions made
in 2004, which totaled $600. Also, as reported in the Providence Journal in April 2005, Garcia’s brother,
Miguel Garcia, the owner of the Garcia Bar and Grill, apparently hosted a fundraiser for Mayor David
Cicilline on April 27, 2005. There is no record of Miguel Garcia personally making a contribution on this
date, but it appears Nelson Garcia may have been in attendance, as he donated $300 on this date (this
amount is included in the total amount contributed by Nelson Garcia represented above).
Mayor Cicilline advised that he knew of a “Garcia” who owned the Garcia Bar and Grill where the above
mentioned fundraiser was hosted, but wasn’t sure if this was Nelson Garcia’s brother. The Mayor stated
that he had no current or previous business or personal relationship with Nelson Garcia.
Andrew Andujar, an Aide to Mayor Cicilline, advised that he knows both Nelson and Miguel Garcia from
the Cranston Street neighborhood and from his visits to the Garcia auto accessories store. Andujar
indicated that he has known Miguel Garcia for approximately seven (7) years, and attended his wedding,
and has known Nelson Garcia for at least three (3) years. Andujar stated that he recalled that Miguel
Garcia hosted a fundraiser for Mayor Cicilline, but was not aware of any further relationship between
either Garcia brother and the Mayor.
None of the other interview subjects indicated that they knew either Nelson or Miguel Garcia prior to this
collection matter, or were aware of any prior or continuing relationship between Nelson Garcia and Mayor
Cicilline.
Other than as discussed above, KPMG could not find any independent documentation or evidence to
illustrate that Garcia had a prior relationship with the Mayor or any other City officials other than the
relationship highlighted by Andujar.
C. Other Matters – Tax Sale and Interest Abatements
During the course of our investigation into the Garcia Enterprises matter, we were advised by Bob
Ceprano that Bruce Miller, the City’s current Director of Finance, and Rita Murphy, made requests and
provided instruction to Ceprano regarding certain taxpayers, relative to their situations concerning taxes
owed, and regarding their inclusion on the City’s tax sale list. We reviewed these matters and determined
the following:
1. Tax Sale Background
57

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Approximately in May each year, a Tax Sale list is generated for the annual Tax Sale, which is held in
August. The Tax Sale list consists of real properties in the City of Providence where delinquent taxes
are owed. Currently, all properties meeting the following criteria, which are set by the City Collector,
are initially placed on the Tax Sale List:
• A taxpayer must owe at least one quarter of unpaid taxes on the current tax year account; and
• Owe more than $1500 in delinquent tax.58
Properties placed on the Tax Sale list can be removed at the discretion of the Collector’s Office,
subject to the approval of a Supervisor in the Collector’s Office, which currently includes the Collector
Bob Ceprano, the Deputy City Collector Marc Castaldi, and the Assistant Tax Collector, Maria
Mansolillo. According to City Collector’s Office personnel, the following are deemed to be appropriate
reasons for removal from the tax sale list:
• Account payment in full;
• Where financial hardship exists due to extenuating circumstances (divorce, high medical
expenses, receivership/bankruptcies, etc.), and a payment plan is established with a Supervisor
from the Collector’s Office; and
• When a property is to be sold imminently (which will result in recovery of the taxes owed).
• When a property is removed from the Tax Sale list, the Tax Sale Specialist in the Collector’s
Office will typically make a notation on the hard copy Tax Sale list as to who requested the
removal and will also file any supporting documentation.
2. Poisitano Realty
Bob Ceprano advised that Bruce Miller, the Director of Finance, asked him to remove a property
belonging to Poisitano Realty from the most recent Tax Sale in August 2008 (relative to outstanding
2007 taxes). Ceprano indicated that he was not initially comfortable removing the property from the
list because the taxpayer had a poor payment history, and owed 2 years of back taxes and interest of
more than $27,000.
KPMG reviewed the Tax Sale list which indicated that the property was removed per Bruce Miller’s
instruction. Yuberki Torres, the Tax Sale Specialist provided a copy of an email from Bruce Miller to
Bob Ceprano, dated July 28, 2008 as the backup documentation that she had on file.59
The email from Miller to Ceprano was the last in a string of email communications that concerned the
Tax Sale, and primarily the property owned by Positano Realty, which is Plat 21, Lot 333, located at 2
Lake Street in Providence. The initial email is from Thomas Deller, City of Providence Director of
Planning and Development to April Wolf, the Director of Real Estate within Planning and
Development, where Deller advises that he had received one or 2 emails from Josh Teverow60 on a
piece of property that he wanted pulled from the tax sale. Deller indicates that he has discussed this
with the Mayor as it has to do with economic development, and the Mayor agreed that it should be
pulled.
Wolf forwarded this to Rich Kerbel, the City’s Director of Administration, who in turn forwarded the
communication to Bruce Miller. Miller forwarded this email to Bob Ceprano (as well as Marc Castaldi
and Maria Mansolillo, and copied Deller, Wolf and Kerbel), instructing him, per Wolf’s email, to
remove the Poisitano property from the Tax Sale. Ceprano replied to all in his response, where he
indicated that he has not removed the Poisitano property from the Tax Sale, stating that Poisitano
Realty currently owes 2 years of back taxes and penalties totaling $27,635.58, and also mentions that
58
According to City Collector’s Office personnel, this amount has fluctuated in prior years, based on changes in tax collection approach, and has been as little as $1,000 or $500.
59
See attached email in Exhibit 37.
60
Josh Teverow is a Providence based attorney and it is unclear on whose behalf he is requesting that this property be removed from the tax sale.

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the Marandolas (Edward Marandola Jr. is the President of Poisitano Realty, Edward Marandola III the
Vice President) “have a very poor track record with the Collector’s Office.”
Deller responded to Ceprano that he understood the delinquency problem, but advised that “we are
negotiating a major development on the property,” and that if they were successful, the property
would be sold in the next two to three months. Deller further states that “A tax sale of the title
confuses if not kills the deal that we are trying to make happen.” Finally, he reiterated to Ceprano that
he had “discussed this with the Mayor and he was okay with pulling the property from the tax sale.”
Miller follows this communication with his own to Ceprano, instructing him again to remove the
Poisitano property from the tax sale, per his earlier directive, and for the reasons articulated by Deller.
He further advises, “There is no down side to removing the property from the sale since the City can
always place this on a subsequent tax sale if this transaction does not come to fruition.”
Miller adds a subsequent communication to Ceprano advising him that he was surprised to see this
email, apparently referring to Ceprano’s response, and indicating that Ceprano should make sure to
discuss with Miller prior to making a unilateral decision.
Ceprano advised KPMG that he did not doubt that Poisitano’s property was part of a city
redevelopment plan, he just did not think it wise to take the property off the Tax Sale list due to the
taxpayer’s payment history.
A review of Poisitano’s tax payment history shows that all the tax years from 2002 to 2007 accrued an
interest penalty, indicative of payment delinquency. To date, the account still has an outstanding
balance for the 2008, 2007, and 2006 tax years, and is considered to be delinquent for all years,
owing a total of $42,151.76.61
We also reviewed other information pertaining to potential connections between Edward Marandola
Jr. and the Mayor, and other City officials. A review of online RI Election Board records indicates that
an “Edward Marandola” with an employer identified as “Diversified Products,” donated a total of
$1,150 to Mayor Cicilline’s campaign, via four (4) contributions made between May 2003 and March
2007. This appears to be the same Edward Marandola of Poisitano Realty, as Annual Reports filed
with the RI Secretary of State’s office for each business list the same business address (1200 Eddy
Street, Providence) and these filings each also list Edward Marandola Jr. as President. We did not
locate any campaign contributions to the Mayor’s campaign from anyone listing Poisitano Realty as
their employer.
In addition, we noted that Joshua Teverow, whose connection to this property is unclear, contributed
approximately $6,025 to Mayor Cicilline between June 2002 and February 2008.
We also conducted media searches relative to Marandola, Poisitano and Mayor Cicilline, and did not
locate anything relevant to this matter.
3. David Corsetti
During his interview with KPMG, Ceprano indicated that he was also asked to remove property
belonging to entities owned or apparently controlled by David Corsetti from the 2007 tax sale that
occurred in August of 2008. These properties include 300 and 318 Atwells Avenue, Providence,
which are both owned by 300 Atwells Ave LLC, an entity which lists David Corsetti as Manager. They
also apparently include 401 South Main Street, owned by 385 South Main Street LLC.62
At the time these properties were placed on the tax sale list, total taxes owed amounted to nearly
$95,000.63
Ceprano explained that Corsetti had a poor payment record and that Corsetti had property placed on
61
62
This entity was formed in August 2007, and its Articles of Organization filed with the RI Secretary of State’s Office do not identify any owners or members of management. KPMG
was advised by Collector’s Office personnel that this property was also a Corsetti property that came off the tax sale list in 2008.
63
Please refer to Exhibit 39, which includes account information pertaining to the above named Corsetti related properties.

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the Tax Sale list the prior year. Ceprano stated that earlier in 2008, Bruce Miller, Rita Murphy and Leo
Perotta, Senior Advisor to the Mayor, came to his office, closed his door and told him that they
wanted him to take Corsetti’s properties off the Tax Sale list. Ceprano asked why and was told that
the City needed to give Corsetti some consideration due to the fact that he was a developer. Ceprano
told the group in his office that Corsetti would have to provide appropriate documentation concerning
the reason that the properties should be removed from the Tax Sale list. Per Ceprano, he was
advised that Corsetti might be selling the properties that were subject to the tax sale.
Ceprano explained that he told Murphy, Miller, and Perotta that he wanted proof of a sale, such as a
purchase and sale agreement, or proof of certified funds. Ceprano recalled that Miller accused him of
being a “hard ass” and told Ceprano that they did not have a purchase and sale agreement at that
time. Ceprano related that he advised Miller, Murphy and Perotta that without documentation of a
sale, and due to Corsetti’s poor payment history, he could not take the property off the tax sale list.
Ceprano indicated that Miller, Murphy, and Perotta later presented a purchase and sales agreement
relative to Corsetti’s properties to him the day before the tax sale. Ceprano indicated that his standard
practice was to attempt to validate these types of agreements, such as by contacting the buyer, but
given that the tax sale was the next day, he did not have time to do this. Ceprano said that as a
result, he told Miller that if he wanted Corsetti off the tax sale list it was going to be documented on
the Tax Sale list that it was Miller’s decision. Ceprano indicated that he told the Tax Sale Specialist in
the Collector’s Office to mark these properties on the Tax Sale list with Miller’s name.
A review of the documentation file maintained by the Tax Sale specialist indicates that Corsetti
provided a copy of a Purchase and Sale agreement, along with a letter dated August 13, 2008
indicating that all taxes on these properties would be paid from the proceeds of the sale of 300
Atwells Avenue by September 30, 2008.
Currently, all taxes on the above mentioned properties are paid through 2007.
We also reviewed other information pertaining to potential connections between Corsetti and the
Mayor, and other City officials. A review of online RI Election Board records indicates that David
Corsetti donated a total of $5,000 to Mayor Cicilline’s campaign, via six (6) contributions made
between July 2004 and April 2008. On all but one of these donations, Corsetti listed his employer as
Premier Development. The most recent Annual Report filed with the RI Secretary of State’s office for
Premier Land Development, Inc. lists David Corsetti as President.
We also noted a contribution of $1,000 to Mayor Cicilline’s by Maria Corsetti in December 2004.
Maria Corsetti’s contribution record from the RI Election Board lists the same address as those
associated with David Corsetti for his contributions.
We did not locate any campaign contributions to the Mayor’s campaign from anyone listing a Corsetti
entity as their employer, including Premier Land Development, Corsetti Properties and others.
We also conducted media searches relative to Corsetti and his entities, and Mayor Cicilline, as well
as other City officials, and only located one potentially relevant article. This article, published in
January 2007, indicated that Mayor Cicilline attended David Corsetti’s wedding during the summer of
2005.64
Finally, during a review of email data collected from the City of Providence, we noted several
documents which appeared to be entries in Mayor Cicilline’s electronic calendar, indicating a series of
scheduled meetings during 2006 (two years prior to the transaction at issue) with David Corsetti.
These meetings appear to have taken place in January, July, September and October of 2006. The
purpose of these meetings is not indicated in the documentation reviewed.
4. Craig Baker
Ceprano also related to KPMG an instance in 2007 where he believed a directive came from the
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Mayor regarding interest owed on a taxpayer’s account, which Ceprano believed was in conflict with
standard procedure. This concerned real property owned by Craig Baker, at 93 Benefit Street,
Providence (Plat 10, Lot 656). At the time, Baker owed $14,093.14 in back taxes and interest on his
2005 real property taxes due.
Ceprano explained that in early 2007 Craig Baker came to his office to make a payment on his
account, which was in delinquent status. Ceprano recalled that Baker had been sent to the Collector’s
Office by the City’s Office of Neighborhood Services (ONS), and wanted the interest abated on his
account, as he claimed that he had never received a tax bill. Ceprano advised Baker he should have
been aware that he owed taxes on the property, in light of the time that had passed since Baker took
ownership. Ceprano did propose a settlement to Baker that included payment of the taxes and a
reduced one time interest penalty, cutting interest of $1,163.65 by more than half, to $517.18.
Ceprano recalled that the taxpayer did not like his proposal and asked Ceprano if he could be
overruled.
Ceprano recalled that Baker ultimately gave him a check for the taxes and the reduced interest in the
meeting, but also told Ceprano that he was going to speak with the Mayor. Ceprano stated that he
later learned that his decision on this matter “was overruled.” Ceprano explained that Rita Murphy told
him later that day that the Mayor wanted him to remove the interest penalty from the Baker account.
Ceprano indicated that he did comply with this, and on the same day annotated the account under
notes sections in the Govern system to note that this was done per the Mayor’s directive.
Ceprano’s note in the account file was as follows:65
“On 3/9/07@ app.930am I and Pleshette M. met with Craig Baker in interest on his property. I
informed him that I would mitigate the charges to 50% of the Feb. 2007 amount. He said that this
was unacceptable and could I be overruled. I explained that it would only be by the Finance Dir.
He paid the full amount due by check. About 2:00pm, Rita M. informed me that the Mayor wanted
me to change the penalty to zero. I explained that this was not appropriate under the
circumstances, and wanted to speak with the Mayor. Not possible. So I explained that any
interest abatement would be done under his authority not mine. This was approved by the Mayor.
The interest adjustment was made by me at the direction of the Mayor. rpc 3/9/07”
Relative to this matter concerning Baker, we also located an email communication between Mayor
Cicilline and Rita Murphy. Murphy was writing to the Mayor at approximately 10:30 AM on March 9,
2007, and relayed the circumstances of the meeting that had taken place that morning at 9am
between Baker, Ceprano and Pleshette Mitchell of ONS. Murphy explained that City Councilman Cliff
Wood had requested assistance for Baker with regard to his overdue real estate taxes.
Murphy stated in the email that the problem was that Baker had not received his tax bill, indicating
that the purchase date of the property fell after the assessment date for 2006 taxes. Murphy indicated
that Baker hadn’t paid any quarterly taxes, was delinquent, and owed $1,163.65 in interest. She
advised that the solution was that the Collector (Ceprano) offered payment of one-half the interest
amount due. Murphy stated that Baker agreed to this under protest, and paid the amount required.
In closing, Murphy advised the Mayor that he might receive a call, as Baker indicated that he wanted
to speak with both the Mayor and Councilman Wood because “he believes he should not have had to
pay penalties on a bill he had not received.”66
Mayor Cicilline replied to Murphy’s email approximately one hour later, indicating, “I also do not
understand why he would have to pay interest for a bill he did not receive. Stop by when you have a
second. Thanks.”67
A review of Baker’s tax account revealed that an adjustment was made to his account in the amount
65
See attached Exhibit 41. KPMG confirmed through review of Audit Trail data within the Govern system that Ceprano made this note to the Baker account on the afternoon of
March 9, 2007.
66
67
Ibid.

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of $517.18, and this amount was eventually credited against the following year’s taxes. We also noted
in our review that Baker has apparently not made any quarterly payments on the current year’s taxes,
and his account is currently in delinquent status.
When KPMG inquired with Murphy regarding this matter, she did not initially recall working on a tax
matter regarding Craig Baker. Upon reviewing a copy of the 3/9/07 email from her to Mayor Cicilline,
she indicated that she did recall the issue, but stated she couldn’t be certain if she or Pleshette
Mitchell had actually forwarded this email to the Mayor. Murphy stated that the format of the email
was similar to a format utilized by Mitchell, but also acknowledged that some of the language used in
the email was consistent with her own common usage. Murphy advised that it was possible that
Mitchell may have drafted the letter, and sent it to the Mayor for her. When KPMG pointed out that the
email was directly from Murphy’s email account, she stated that Mitchell in the past had sent emails
to the Mayor from Murphy’s computer.
Murphy did not recall if she spoke with the Mayor about this matter. She recalled speaking with the
Mayor about one of the members of the Baker family, but didn’t know if it had to do with this tax
matter. She recalled that she had also worked with Craig Baker’s brother Jeff regarding a trash
matter, and a local school issue. She also stated that she could have spoken with the Mayor about
this issue, or that it may have been Mitchell who spoke with the Mayor. She went on to state that
when the Mayor asks to see her that she didn’t always go to meet with him.
When KPMG inquired if Murphy had directed Ceprano per the Mayor to abate all of the interest on
Baker’s account, Murphy strongly denied it, stating that she never would have done that, and further
that she would never feel in a position to ask or tell Ceprano anything, and specifically that she was
certain that she wouldn’t have instructed Ceprano to abate the taxes. Murphy indicated that she
would never say to anyone that the Mayor wanted something. Murphy also indicated that the Mayor
“knows better,” and that she “wouldn’t let him go there,” and that if he had said it, she would have
“fought with him” over it.
Pleshette Mitchell indicated that she recalled the meeting with Craig Baker, but did not recall drafting
or forwarding an email to the Mayor, or meeting with the Mayor. She did not specifically recall briefing
Murphy regarding the matter that day, but indicated that it was common for her to brief Murphy when
a constituent was upset, and she recalled that Baker was upset over having to pay interest.
Mitchell did not recall ever having used Murphy’s computer to forward an email on Murphy’s behalf.
She also stated that she was not aware that the interest was fully abated, and recalled that she had
considered the matter closed, following the meeting with Ceprano and Baker where Baker made a
payment that included a portion of the interest.
Mitchell further indicated that she would be surprised if Ceprano fully abated Baker’s interest on his
own, as based on the meeting she participated with Ceprano and Baker, she was under the
impression that Ceprano would not change his mind. Finally, Mitchell stated that she did not discuss
any further interest abatement on this account with anyone, including Ceprano and Murphy.
Mayor Cicilline recalled that Craig Baker did contact him regarding this matter, and he recalled
referring the matter to the City’s Office of Neighborhood Services. He indicated that he believed it
came back to his attention due to a disagreement over whether any interest penalty should be paid.
Mayor Cicilline stated that because the City had acknowledged that Baker had not been sent a tax
bill, he felt that the taxpayer should not have had to pay any interest, and recalled that he
communicated this to Rita Murphy, the Director of the Office of Neighborhood Services at the time.
Following this communication to Murphy, Mayor Cicilline did not have any further discussion or take
any other action relative to the matter. He indicated that he assumed that the matter had been
resolved and that Baker was not charged any penalty.
The Mayor further stated that the City Collector had the “ultimate decision” with regards to tax
collection matters, but that in his position as Mayor he had the right to “advocate” regarding any policy
which he believed resulted in an inequity. He indicated that if the City Collector had any objections or
disagreed with this position, he should have discussed it with him and directly advised him of the

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objection. The Mayor stated that “there has never been any Department Director within the City’s
administration who couldn’t walk in and have a meeting” with him. In this instance, the Mayor stated
that he did not have any conversations with Ceprano about the matter, and was not aware of his
objection to the Mayor’s position. He further indicated that he had no recollection of Ceprano ever
requesting to meet with him since he (the Mayor) took office.
Finally, the Mayor rejected Ceprano’s assertion in his note cited above that the Mayor’s position was
inappropriate and any notion that he (the Mayor) exerted any undue influence in this matter.
KPMG also reviewed other information pertaining to potential connections between Baker and the
Mayor, and other City officials. A review of online RI Election Board records indicates that Craig
Baker donated a total of $3,000 to Mayor Cicilline’s campaign, via three (3) contributions made
between February 2005 and March 2007. Baker listed his employer as Domestic Bank on each of
these donations.
It was noted that Nathaniel B. Baker, Craig Baker’s father, and H. Jeffrey Baker, Craig Baker’s
brother, also contributed approximately $7,500 to Mayor Cicilline’s campaign between 2002 and
2007. Both identified Domestic Bank as their employer. Additionally, Linda Baker, who resides at the
same address as Nathaniel Baker, contributed $2,000 between 2005 and 2007.
We did not locate any campaign contributions to the Mayor’s campaign from anyone else listing
Domestic Bank as their employer.
We also conducted media searches relative to Baker and Domestic Bank, and Mayor Cicilline, as well
as other City officials, and did not locate any relevant information.
Finally, during a review of email data collected from the City of Providence, KPMG noted a couple of
items pertaining to the Mayor and Craig Baker. Information contained in at least one email appeared
to indicate that Mayor Cicilline appointed Craig Baker to the City’s Board of Investment
Commissioners, in approximately June 2006. Per a 2008 notice released by the Providence City
Council, Baker was recently reappointed by the Mayor to this same Board in March for a three year
term.
In addition, we noted two (2) documents which appeared to be entries in Mayor Cicilline’s electronic
calendar, indicating meetings between the Mayor and Craig Baker in January 2006 and July
2006.The purpose of these meetings is not indicated in the documentation reviewed.
5. Arthur Robbins
Ceprano related another instance from 2008 where he believed a directive came from the Mayor
regarding interest owed on a taxpayer’s account. This concerned real property owned by Charles
Orms Associates, at 10 Orms Street, Providence (Plat 3, Lot 506). 10 Orms Street is a commercial
office building with a total appraised value of approximately $8.7 million. Charles Orms Associates is
managed by Arthur Robbins.
For 2007, Charles Orms Associates owed a total of $237,072.08 in real property taxes, payable
quarterly in an amount just over $59,000. Due to a late 2nd quarterly payment, approximately
$12,450 had been added for interest penalty.
Ceprano recalled that John McKiver, a representative of Charles Orms Associates, called the
Collector’s office on behalf of Arthur Robbins and asked the Deputy Collector, Marc Castaldi to abate
the interest on the delinquent tax account. Castaldi referred the matter to Ceprano, who proposed
that the taxpayer make a full payment on the taxes and a one time interest penalty.
Ceprano stated that McKiver asked if Ceprano could be overruled and told Ceprano said ‘no’.
Ceprano recalled that McKiver told him that Mr. Robbins would contact the Mayor. Ceprano explained
that shortly after this conversation, Bruce Miller the Director of Finance, came to Ceprano’s office and
told him that the Mayor wanted him to change the payment on the account. Ceprano explained that
he told Miller that if Miller wanted the interest penalty waived, the full tax amount needed to be paid

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up front. Miller told Ceprano that was not how he wanted it done. Ceprano initially stated that he was
not sure what ultimately happened with the collection because the matter was pending when he left
the Collector’s Office.
A review of the Charles Orms Associates account information revealed that Ceprano also apparently
made a note on this account, as he had regarding the above discussed Baker account. Ceprano’s
note to the electronic account file was dated March 3, 2008, and was as follows:
“This adjustment is being made per the direction of the Finance Director and the Mayor. John
McIver had requested an interested (sic) abatement from Marc Castaldi who refused him. McIver
then called rpc who agreed to lower the interest for payment in full based on a good payment
record. McIver said A. Robbins was a friend of Mayor and would request a full abatement of
interest and only pay qtr. Bruce Miller, in response to Mayor directed that I process payment
without interest, abate interest charged and continue qtrly payments. This payment was
processed under direction of Finance Director Bruce Miller not under authority of City Collector.
RPC 3/3/08”68
It appears that in March 2008, following this meeting, the interest of $12,446.28 was abated. We also
noted another notation to the account that appears to have been made by Marc Castaldi on October
1, 2008. In his notation, Castaldi indicates that:
“After a review by Acting Tax Collector Matt Clarkin, a second adjustment in interest ($5926.80)
was granted based upon the previous agreement between the City and Charles Orms
Associates. See email dated 10/1/08. Copy of email on file. 10/01/08 mdc”69
The referenced email in the above note is a communication from Clarkin to Marc Castaldi and Maria
Mansolillo, where Clarkin indicates, “Based on the agreement made between Charles Orms
Associates and the City in March 2008, please forgive the $5,922.80 in interest that is currently
shown as due for the Marriott Hotel Property located at 10 Orms Street (Plat 3, Lot 506).”70
Clarkin indicated that he understood per Ceprano’s original note that the agreement allowed Charles
Orms Associates to continue to pay quarterly payments, as opposed to paying the entire amount in
full back in March. It is our understanding that the practice of the Collector’s Office, once an account
is delinquent, is that the account must be paid in full (meaning the entire annual tax amount). If the
account is not paid in full, interest will continue to accumulate on the account until the full amount of
tax owed is paid. We confirmed with Collector’s Office staff that the Govern tax collection system
used by the City automatically charges interest to an account once it becomes delinquent, and
continues to accumulate interest automatically until a payment in full is received and entered in the
system.
Hence, the action by Ceprano to abate interest and allow quarterly payments, as apparently
instructed by Miller, resulted in a total abatement of approximately $18,369.
When KPMG inquired with Bruce Miller regarding this matter, he recalled that Ceprano approached
him to discuss the matter. Miller did not recall that Ceprano made any comment regarding Robbins
being a friend of the Mayor, or that he apparently was going to speak to the Mayor.
Miller also stated that he did not talk to the Mayor about this matter, and never took direction from the
Mayor regarding this tax matter. He did not recall making any statement that could have been
perceived by Ceprano that Miller was being directed by the Mayor.
Miller explained that his direction to abate this interest for this taxpayer was due to his desire to have
the practices of the Collector’s Office regarding these types of circumstances be handled consistently.
He advised that Ceprano told him that in the past he had given full abatements for taxpayers in
68
See attached Exhibit 43. KPMG confirmed through review of Audit Trail data within the Govern system that Ceprano made this note to the Charles Orms Associates account on
the afternoon of March 3, 2008.
69
Ibid.
70
See attached Exhibit 44. Clarkin’s reference to the Marriott Hotel Property in this email is apparently a mistake, as the Marriott is located at 1 Orms Street.

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circumstances where the taxpayer had a clean payment history (i.e. no delinquencies). Miller
indicated that he also thought in this case that there had been another reason that the taxpayer was
late, and while he couldn’t recall the issue, thought that this also contributed to his determination in
the matter.
Relative to the Charles Orms Associates account, and his discussions with Miller, Ceprano did not
recall that Miller addressed or was concerned that this matter was handled inconsistently with past
practice. Regarding the other issue cited but not fully recalled by Miller, Ceprano advised KPMG that
Charles Orms Associates had apparently forwarded their tax payment mistakenly to their utility
provider, and had forwarded their utility payment to the Collector’s Office. Ceprano stated that his
office promptly returned the utility payment to Charles Orms Associates, to notify them that they had
sent the wrong payment. Despite this notification, Charles Orms Associates did not contact him or
arrange for tax payment until several months after this notification, and when payment did occur, the
interest penalty was incurred. When the matter was eventually raised to Ceprano by the taxpayer’s
representative McIver, Ceprano determined that due to the lack of response over time, the matter did
not warrant a full abatement.
Ceprano and other Tax Collection officials, including the Deputy City Collector, and the Assistant Tax
Collector, stated that the standard practice of the Collector’s Office was to offer some level of
abatement on a delinquent account, but only if the taxpayer had a clean payment record and agreed
to pay the account in full at the time of the agreement to abate interest. They stated that the tax
collection system in Govern is set up in this manner, where interest will continue to accrue on a
delinquent account until the full amount of annual tax is paid.
Mayor Cicilline recalled that he did receive a call from Arthur Robbins about this matter, and that in
reaction he did ask someone within his administration, possibly within the Office of Neighborhood
Services, to assist Mr. Robbins. The Mayor could not recall to whom he referred it to or his actual
conversation. The Mayor indicated that he confirmed the circumstances of what had occurred, and
believed that he would have said in response that this was an “honest” mistake by the taxpayer, and
that it should not be penalized.
The Mayor further advised that in general, he believed strongly that the City “should not be penalizing
or taking advantage of taxpayers regarding de minimis amounts or in situations where honest
mistakes have occurred.” He stated that he would afford this type of advocacy to any taxpayer who
contacted him regarding a tax matter. Finally, he advised that he did not see any conflict of interest
relative to his advocacy concerning Mr. Robbins, or relative to Mr. Baker.
We also reviewed other information pertaining to potential connections between Robbins and the
Mayor, and other City officials. A review of online RI Election Board records indicates that Arthur
Robbins contributed a total of $6,350 to Mayor Cicilline’s campaign, via ten (10) contributions made
between July 2002 and February 2008. Robbins identified his employer as Robbins Properties on
each of these donations.
We did not locate any campaign contributions to the Mayor’s campaign from anyone else listing
Robbins Properties, Charles Orms Associates or other Robbins entities as their employer.
We also conducted media searches relative to Robbins and Mayor Cicilline, as well as other City
officials, and identified two articles. The first, was from a Providence Journal article dated May 12,
2002, and Robbins is quoted as saying, “David Cicilline is a very dear and close friend….” The
second article is dated March 9, 2003, also from the Providence Journal and Robbins is described as
“Cicilline friend, hotel man Arthur S. Robbins.”71
71
See referenced articles in attached Exhibit 45.

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V. PROCESS OBSERVATIONS AND RECOMMENDATIONS
A. Tangible Tax Assessment
KPMG representatives met with Roberta D’Onofrio, the City’s Supervisor of Tangible Property, and Mary
Ann Ferri, Supervisor of Property Tax in the City of Providence Tax Assessor’s office, in order to review
the Tax Appraisal process as practiced by the City.
Based on these discussions, KPMG created a flow chart of the Tax Assessment process, which is
attached here as Exhibit 46.
KPMG also made a series of observations and associated recommendations, pertaining to potential
opportunities for enhancement of the Tax Appraisal process. These include:
1. Document retention
a. The Supervisor of Tangible Property was not aware of a written document or records retention
policy for the City. KPMG recommends that the City formalize its document retention policy to
memorialize its practice of maintaining tax records, including the locations of those records,
indefinitely. Formalizing policies and procedures can provide the City with an opportunity to
standardize routine processes and allow them to be carried forward into the future, when current
staff members leave the employ of the City.
b. KPMG also recommends that the City improve the conditions in which it stores its records.
Currently, older records are stored in the basement and subject to mold and periodic flooding,
prior to being moved offsite to a third party vendor. It is our understanding that these records are
not immediately moved to safer, offsite storage because they are needed to conduct daily
business. However, if an older document is damaged due to unsafe storage, the City’s ability to
accomplish its business could be impaired. Given current space constraints, KPMG suggests the
City investigate electronic document storage options.
2. Segregation of Duties
a. KPMG noted that the current staffing levels in the Tangible Tax group created difficulty in
achieving a proper segregation of duties. Segregation of duties is vital to both the prevention of
fraud and inadvertent errors that, uncaught, could cost the City unpredictable amounts of lost
revenue. Currently the Tangible Property Tax group consists of the City’s Supervisor of Tangible
Property, periodic temporary workers, and the Assessor. KPMG recommends reassigning duties
so that members of different departments are available to provide a secondary level of review for
their colleagues with the Tangible Tax group. In addition, when appropriate from a budgetary
standpoint, the City should consider increasing the current staffing level in the Tangible Property
Tax department to at least one additional clerk.
3. Data Integrity
a. KPMG noted that any transfer of information from one data system to another could result in lost
data. Lost data, in this instance, would translate into listed businesses that are not input into the
Govern system, and therefore not charged tax during the current year. When data is uploaded
from RRC software to Govern software, Bob Hickey, of City State Computers (“City State”), the
City’s system maintenance vendor, has a practice of verifying that all accounts migrated by
comparing the total record counts on each system. However, KPMG believes that this process
should be formally documented and followed to ensure that such checks continue to occur.
b. Account numbers for each taxpayer address are currently assigned by RRC, a third party
contractor. RRC reassigns account numbers during the revaluation process every ten years.
Reassigning account numbers poses a risk that businesses that are currently on the tax rolls may
inadvertently be excluded in the tax roll produced during the subsequent revaluation. A lost

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V. PROCESS OBSERVATIONS AND RECOMMENDATIONS (continued)
account could result in the City losing tax revenue from that entity until they reappear (if they
reappear) on the tax rolls through the normal assessment process. In years of revaluation, KPMG
recommends that the City independently reconcile account numbers from the previous
revaluation cycle to the “old reference” field account numbers in the new revaluation cycle to
ensure that all tax accounts are appropriately transferred from one tax roll to the other. KPMG
also recommends that this process be documented so that it carries forward to future revaluation
periods.
c. The City currently has a practice of issuing “Compute Reports” to review the total City tax for
reasonableness (i.e.: total asset balances, rates, interest, number of accounts, etc). KPMG
suggests the City could further enhance the value and usability of these reports by adding fields
for prior year figures. This will allow the reviewers in the Assessor’s office to more easily compare
current year figures to prior year figures and note any significant unexplained differences that
could indicate processing errors.
4. Tax Abatements
a. KPMG recognizes that the City has a policy of requiring an evidenced secondary review of all tax
abatement forms, regardless of abatement amounts. Currently the Supervisor of Property Tax
prepares tax abatement forms and the Assessor reviews all forms, evidencing his approval with
his initials and date. However, once the Assessor signs abatement forms, the form preparer then
enters abatement credits into the Govern system; there is no secondary review of data input into
the system. This exposes the City to the risk that an abatement preparer could enter
inappropriate or unapproved abatements in the system, regardless of prior review, as no
subsequent reconciliation is performed.
b. KPMG recommends that the City charge another individual with the task of entering reviewed
abatement form information into the Govern system. Barring this, KPMG recommends that the
City develop a process to track total abatement amounts approved by the Assessor, and then
reconcile that amount to system output at regular intervals to coincide with the tax billing cycle. In
order to operate in the most effective manner, this reconciliation should be performed by an
individual other than that reviewing or inputting this information into the system. In addition to
mitigating the risk of inappropriate abatement entry, this control will also help the City identify any
inadvertent data entry errors.
5. Tax Enforcement
a. KPMG understands that Annual Returns to the Assessor are accepted by the Assessor’s office
well beyond the stated due date. In addition, while extension letters are scanned into a tracking
log, Returns received after Jan 31st are not matched to taxpayer extensions. Rather, all Annual
Returns to the Assessor are accepted so long as data is still being uploaded into the RRC
system.
b. The City’s current policy is to charge an estimated tax equal to the prior year’s tax liability plus an
additional 10%. It is our understanding that, if an Annual Return to the Assessor is received late
(after RRC completes its data entry process) an estimated tax is applied. The practice of
continuing to accept Annual Returns to the Assessor, beyond the stated due date, and not
verifying that Returns filed after Jan 31st have associated extensions, is potentially costing the
City an additional 10% in tangible tax revenue on those particular accounts.
c. KPMG recommends that the City begin verifying that all Annual Returns post marked after Jan
31st are associated with appropriately filed extensions. The City should investigate automating
this process using its barcode reading software.
6. Tax Exemptions

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a. Tax exemptions could represent a high risk area for the City. Businesses that are inappropriately
treated as exempt can cost the City hundreds or thousands of dollars in tax revenue. Currently,
tax exempt businesses are tracked in the Govern system by a tax exempt code. After new
businesses are approved for tax exempt status, they are entered into the Govern System by the
Supervisor of Property Tax. However, the data entered into the system is not subject to further
review. If a taxpayer is incorrectly or inappropriately coded as exempt, the City will not earn the
appropriate tax revenue.
b. It is KPMG’s understanding that, a taxpayer exemption applies universally to all taxable asset
classes (Real Estate, Tangible Property, Motor Vehicles). KPMG suggests that the City run
periodic reports on the Govern system comparing tax exempt businesses in the tangible property
system with taxpayers being granted exemptions in other departments. Any taxpayer accounts
with exempt status in one department, but not another, should be verified by tracing the account
to the appropriately approved exemption documentation. This review should be conducted by
individuals other than those responsible for inputting exemption information into the system.
c. As part of the tax exemption process, the City currently assigns appraisers to visit applicant
businesses and ensure that actual business activities agree to supporting documents obtained as
part of the exemption application form (charter, bylaws, etc). KPMG recommends that the City
further enhance this process by periodically reviewing the work of the City’s appraisers through
peer or management quality assurance process.
d. KPMG understands that the City of Providence does not currently monitor tax exempt
businesses. Once an organization has been granted tax exempt status it is tax exempt in all tax
categories (Motor Vehicles, Real Estate, and Tangible Property). If an organization previously
qualified as a tax exempt entity, but later changed its mission in a way that would cause it to lose
its status, the City has no mechanism for identifying the change or revoking the privilege. This
could cost the City many thousands of dollars depending on the size of the organization and the
number of years it conducted non-qualified business as a tax exempt entity. KPMG recommends
that the City periodically revisit businesses with existing exemption status to ensure that the
business continues to be rightfully exempt.
e. KPMG also notes that there is currently no way to track the type of businesses assigned to
particular appraisers. If a particular appraiser happens to service a particular business category,
there is a risk that certain appraisers may become susceptible to graft. This risk could be
especially costly to the City, given the fact that once an entity is declared tax exempt, there is no
further opportunity for review. KPMG recommends that the City monitor appraiser activity and
rotate appraisers as necessary, in order to mitigate the risk of appraiser graft.
7. Other
a. The city currently uses information obtained from the licensing department to update its current
year tax rolls. KPMG believes that a further synergy could be developed between the licensing
department and the tax assessor’s department, by utilizing RRC’s door to door canvassing to also
ensure that all businesses are properly licensed, if licensing is applicable.

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B. Tangible Tax Collection
KPMG representatives also met with Marc Castaldi, Deputy Tax Collector and Maria Mansolillo, Assistant
Tax Collector, to review the tangible tax collection process.
Based on these discussions, KPMG created a flow chart of the Tangible Tax Collection process, which is
attached here as Exhibit 47.
Similar to the above, KPMG made a series of observations and associated recommendations, pertaining
to potential opportunities for enhancements of the Tax Collection process. These include:
1. General Area
a. During our discussion, it was noted that there are existing policies on the daily collector’s
operations such as payment plans and receiving tax payments etc.; however per review of the
policies provided and per our inquiry, the some policies appear to be out dated and policies, in
many cases, do not provide an in depth procedure of the department’s daily activities.
Formalizing policies and procedures can provide the City with an opportunity to standardize
routine processes, enhance employee understanding, reduce supervisor time needed to address
staff questions and errors, and limit the role of unnecessary use of judgment at the staff level.
KPMG recognizes that many of the activities in the Tax Collection department are not routine
processes and it may not be appropriate to design policies requiring step by step procedures in
these cases. However, the City can and should enhance its policies for these procedures to
include: employee functions authorized to perform non-routine activities, reasonableness
thresholds, documentation retention requirements, and a process of approval and secondary
review.
As such, KPMG recommends that the City enhance its current policies and procedures and
perform an analysis of all daily activity to determine whether additional policies and procedures
should be put in place.
b. It became evident in our review that during heavy payment processing times, the Collector’s
Office staff may experience time restrictions that may reduce its ability to observe proper
segregation of duties. Segregation of duties is vital to both the prevention of fraud and inadvertent
errors that, uncaught, could cost the City unpredictable amounts of lost revenue. During heavy
payment processing times, the City should consider reassigning duties so that members of
different departments are available provide a secondary level of review for their colleagues. As
the City continues to grow and the department evolves, KPMG recommends the City continually
evaluate department staffing levels and assigned responsibilities.
c. A greater amount of automation in the payment process (i.e.: online payments) could save the
City and taxpayers time and money and decrease the probability of errors due to manual entry.
2. Security of Payment Receipts

a. We understand that cash payments to the city are not properly secured. On a daily basis, the
Collector’s Office receives numerous cash transactions from taxpayers. During KPMG’s
walkthrough of the payment receipts process, we noted that one taxpayer made a single cash
payment of approximately $1500. Despite this risk, there is no CCTV security camera in place.
Cash transactions pose a high level of theft and misappropriation risk.
A security camera system can serve as a deterrent to any individuals who may try and steal
money from the cashiers or to cashiers who may otherwise attempt to steal cash from their
drawers. KPMG recommends that security cameras be strategically placed in the collector’s office
to increase cash protection as well as increase the sense of security to employees. At a

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minimum, KPMG recommends cameras be placed at the main entrance to the department, near
the cashier windows, near the balancing department, where payment receipts are reconciled, and
in the safe. In addition, if a theft occurs, security cameras can be used in an investigation to
attempt to recover the assets.
b. KPMG recommends that there be unique access codes for each door of the safe and also that
these access codes be changed at least on a quarterly basis. This will reduce the risk of another
employee gaining unauthorized access to the safe if he/she were to gain access to the access
code. In addition it will reduce the risk of fraudulent activity such as theft.
c. We were advised that the head cashier along with all four cashiers will enter the safe to store
payments at the same time. The large numbers of individuals in the safe simultaneously could
expose the City to the risk of theft. Larger numbers of cashiers may be less easy to supervise
while in the presence of unsecured cash drawers. KPMG recommended that a security camera is
installed in the safe or on the safe to monitor daily entries and dealings. This will reduce the risk
of inappropriate actions such as theft from the City and unauthorized entry into the safe.
d. It is our understanding that that the balancing report is not balanced until the following day.
Currently, if a cashier takes a large amount of cash from a cash drawer, they can leave the
building and stop reporting to work. While the guilty party may be evident in a scenario such as
this, it may still be difficult to recover the City’s money in this situation. KPMG recommends that
the balancing report is reviewed at the end of each day and balanced before staff members
depart the collector’s office. This will reduce the risk of not being able to resolve issues
appropriately and having a shortage of cash payments stored in the safe.
e. KPMG noted that the Head Cashier is responsible for preparing bank deposits. Bank statements
are then reconciled to the Schedule of Total Receipts by the Controller’s office. The Schedule of
Total Receipts is a system generated report that tracks all payments received by the collection
department each day. Total amounts listed on the Schedule of Total Receipts should be directly
traceable to deposits on the bank statements. However, according to the Assistant Tax Collector,
the head cashier has the capability of making edits and changes to entries in the Govern system.
Changes in the Govern system will result in changes to the Schedule of Total Receipts. We
understand, there is currently no process in place to review system edits made by the Head
Cashier, or any other supervisor. This exposes the City to the risk of unidentified asset
misappropriation. The Head Cashier currently has the ability to take cash from the daily deposits,
and delete those receipts from the Govern system. If entries are deleted from the Govern system,
they will not appear on the Schedule of Total Receipts. Therefore, a potential theft would not be
caught in the reconciliation.
KPMG recommends that on a weekly basis, the Assistant to the Controller, or another Supervisor
from a department outside of the Collections process, run an audit trail report that will show all
edits/changes in the system and review to make sure a sample of changes were appropriate. In
addition, KPMG recommends that the City develop an authorization process, or institute a dollar
threshold amount for system changes necessitating a second level of authorization. This will
reduce the risk of inappropriate adjustments to the system, in addition, inaccurate amount posted
to the city for payments received or on inappropriate transaction of payments.
3. Govern Access Rights

a. We noted that there is currently no formalized approval process for granting particular access
rights to employees. In addition, the City does not review its Govern System Access rights on a
regular basis (at least once a year) to ensure that employees’ access continues to be in line with
their job functions. This exposes the city to the risk of inappropriate system access and the
possibility of system overrides by unauthorized personnel.

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KPMG recommends that the Department institute an authorization process requiring at least two
Supervisors to sign off on new employee access rights. These approvals should be documented
and retained as evidence of the approval. In addition, the City should create a procedure to
review the access rights of all users on an annual basis, at a minimum. This could help to identify
any terminated employees who may still have rights to the system. According to the Assistant Tax
Collector, the Govern system cannot be accessed remotely by staff, however, there remains a
risk that current staff can use the usernames of terminated employees in an attempt to
circumvent the system’s audit trail capabilities.
4. Delinquent Accounts and Interest Rates:

a. KPMG noted that the Interest Rate Calculation currently used by the city is highly complex.
Specifically, total interest accrued is not tracked in the Govern system, rather, Govern
recalculates interest amounts due on the total tax amount outstanding every time a payment is
received. This could result in multiple interest charges on the same balances during the same
billing cycle, if the taxpayer makes multiple payments in that cycle. This exposes the City to the
risk that an individual taxpayer could potentially face an undue or inequitable burden regarding
the amount of interest paid or owed to the City. KPMG recommends the City re-evaluate its
interest rate calculation methodology. Policies should be re-examined and calculations simplified
so that interest accrues as of the last payment date, rather than on all unpaid balances as of the
start of the tax year.
b. According to the Collector’s Office, the City’s interest rate calculation methodology causes the
Collection Department to issue many interest adjustments per year. Tax supervisors make
manual interest rate adjustments in the system when taxpayers bring multiple interest charges,
described above, to the attention of the tax collection department. However, there are currently
no policies in place outlining the instances in which interest rate adjustments can be granted. In
addition, there are no policies requiring any level of adjustment pre-approvals or subsequent
review. Therefore, any employee with the appropriate access rights can grant an interest rate
adjustment, and potentially issue cash refunds, without any secondary review. Manual
adjustments are an area of high risk due to both error and fraud. KPMG recommends that the
City create more standardized policies outlining when and how interest rates can be adjusted. In
addition, the City should establish an approval and review process to ensure that interest rate
adjustments are not being made unilaterally.
c. KPMG also noted that the City’s Govern system does not currently track interest rate receivables.
Rather, interest is recalculated on any uncollected balances each time a payment is received.
The City does not actively monitor the amount of interest currently due from taxpayers. If a
taxpayer is severely delinquent in their tax payments, and no payment is ever made, there is no
receivable in the system for the interest amount. In addition, this system does not allow the City to
easily change the interest rates it charges. Under the current system, changing the interest rate
on late payments would change the interest rate on all unpaid balances for that tax year. KPMG
recommends that the City create a separate interest receivable to track outstanding interest owed
by each taxpayer.
d. It is KPMG’s understanding that the City can choose to extend a universal grace period to all
taxpayer accounts. We were informed that in practice interest rate effective dates are chosen by
the City Collector and entered into the system by any one of the three tax supervisors. However,
there is no formalized or documented approval or review process. As the City’s interest rates are
not prorated, missing even one day of interest on late payments could result in the loss of a
month’s worth of interest on those accounts. As interest rate dates are applied to all taxpayer
accounts, the number of affected accounts could be significant. KPMG recommends that the
department adopt and document a formalized interest rate effective date approval policy,

24138BOS
including provisions for the subsequent review of the approved effected date once it has been
entered into the system.
5. Payment Plans:
a. While the majority of payment plans entered into by the City are for real estate, and not tangible
property, all tax subsystems (RE, Motor Vehicles, and Tangible property) are subject to similar
risks in this area. Payment Plans are developed based upon a large degree of tax collection
supervisor subjective judgment in the analysis of supporting documentation and the
reasonableness of the proposed payment plan. KPMG recommends that all payment plans are
subject to a secondary review, by an individual in the management function.
b. Collection agencies are currently authorized to enter into payment plans with taxpayers that
freeze interest rates at the rate in effect when the taxpayer enters into the plan. These payment
plans are sent to the Tax Sale Specialist and flagged in the Govern System. However, there is no
level of review by the Tax Sale Specialist or City to ensure that payment plans are being entered
into appropriately by the Collection Agencies. This exposes the City to the risk of inappropriate
activities by their third party vendors. Collection agencies are compensated based upon the
amount of past due balances they are able to collect. Therefore, Agencies may be tempted to
enter into unauthorized payment plans that either A) lower interest rates to increase their
likelihood of collection, or B) increase interest rates to increase their potential collection amount
and, therefore, their potential commissions. KPMG recommends that the City test payment plans
reported by the Collection Agencies on at least a sample basis, or require the Collection Agencies
to provide results from any external control reviews (i.e. SAS 70 report or peer review).
c. There should be a periodic review process to ensure that all accounts with payment plans and all
accounts that are in collections are properly flagged in the Govern system. Payments to accounts
that are not flagged as payment plan accounts could necessitate manual interest adjustments
that could expose the City to the risks of error or fraud. At a minimum, KPMG recommends the
City generate system reports reconciling the total number of payment plan accounts to the total
number of payment plans submitted by the collection agencies.
6. Accounts in Collection
a. According to the Collector’s Office, they advise City State, the external vendor responsible for the
Govern system maintenance, which parameters to use to determine which delinquent accounts
will be transferred to collections each year. For example, if City State is advised to transfer all
accounts with past due balances of $10 older than one year to the collection agencies. If
parameters are not consistently set from year to year, the City faces the risk that some accounts
may be inappropriately excluded from the collection agency transfer. KPMG recommends that the
criterion for when a delinquent account is turned over to collection be documented so that it can
be consistently applied from year to year. In addition, KPMG recommends that prior to being sent
to City State, this criterion be reviewed and approved by another tax collection department
manager.
b. Accounts are currently transferred to Collection agencies via a CD download of delinquent
accounts generated from the Govern System. Agency representatives are currently required to
sign a form indicating that they have received a CD with delinquent accounts turned over by the
City. However, there is currently no formalized policy in place to reconcile the Accounts per CDs
to the total delinquent accounts found on the system. There is a risk that delinquent accounts
may not be appropriately turned over to collection agencies due to error or intentional exclusion.
KPMG recommends that in addition to the Collection Agency representative’s signature, the
Collection Agency’s sign-off form also include the number of records the Agency received. The
total of accounts received by both agencies should equal the total of all delinquent accounts

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pulled in the initial systems report. This alleviates the risk that a delinquent account is not
assigned to a collection agency, and therefore not collected until the subsequent year.
c. Currently the City writes off delinquent accounts in bulk, by tax year. There should be a review of
old accounts in collection that are not submitted to litigation to ensure that collection agency
personnel are not inappropriately excluding particular accounts from their collection efforts until
they can be written off. In addition, KPMG recommends that the City periodically review a sample
of collection agency accounts to determine whether or not they show proper evidence of pursuit.
d. According to Maria Mansolillo, Rossi Collections and Rossi Law represent two different branches
of the same company. Rossi Collections earns 11.5% on amounts it collects for the City. Rossi
law earns 21.5% on the amounts it collects for the City. In light of the potential conflict of interest
(in that Rossi may be motivated to transfer accounts to litigation sooner than would have
otherwise occurred, in order to capitalize on the higher collection fee), the City should conduct
appropriate review of accounts referred to Rossi to ensure that proper collection efforts are being
made.
7. Other
a. During KPMG’s interviews with the Tax Assessor’s department KPMG learned that the Collector’s
Office assists in the creation of the tax roll by informing the Assessor’s department when
taxpayers request letters of good standing. KPMG notes that licensed businesses are required to
obtain letters of good standing from the tax collection department prior to being issued new
licenses or having their licenses renewed. However, during the tax collection interview it was
noted that the tax collection department does not have access to the RRC software. According to
tax collection supervisors, it is sometimes difficult to search the Govern system by business name
(due to changed names, DBAs, etc). Therefore, it is possible that an account may not be in good
standing, and a letter is inadvertently issued because back taxes were not found in the Govern
software, due to being listed under a different name. If the license is granted and back taxes are
owed, it is possible that those taxes will not be paid until the next year, when the City again has
any enforcement mechanism to use to collect the taxes. KPMG notes that RRC software is
searchable by business address. Therefore KPMG recommends granting individuals in
appropriate staff functions in the Collector’s Office inquiry access to the RRC software.

24138BOS
. Exhibits
VI. EXHIBITS
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City of Providence

January 20, 2009

II. EXECUTIVE SUMMARY ........................................................................................... 3

IV. INVESTIGATIVE OBSERVATIONS

V. PROCESS OBSERVATIONS AND RECOMMENDATIONS

Privileged & Confidential – Attorney Work Product i

Privileged & Confidential – Attorney Work Product 1

Privileged & Confidential – Attorney Work Product 2

II. EXECUTIVE SUMMARY

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II. EXECUTIVE SUMMARY (continued)

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1. Document Collection and Review

2. E-Data Collection and Review

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III. METHODOLOGY (continued)

(consisting of approximately 5 gigabytes of data) from the City’s email server.8

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III. METHODOLOGY (continued)

Processing and Review

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III. METHODOLOGY (continued)

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IV. INVESTIGATIVE OBSERVATIONS

A. Garcia Enterprises’ Tax Matter

1. Garcia Enterprises’ Tangible Tax Account History

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IV. INVESTIGATIVE OBSERVATIONS (continued)

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IV. INVESTIGATIVE OBSERVATIONS (continued)

3. Settlement of the Garcia Enterprises’ Account in May 2006

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IV. INVESTIGATIVE OBSERVATIONS (continued)

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IV. INVESTIGATIVE OBSERVATIONS (continued)

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IV. INVESTIGATIVE OBSERVATIONS (continued)

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IV. INVESTIGATIVE OBSERVATIONS (continued)

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IV. INVESTIGATIVE OBSERVATIONS (continued)

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IV. INVESTIGATIVE OBSERVATIONS (continued)

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IV. INVESTIGATIVE OBSERVATIONS (continued)

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IV. INVESTIGATIVE OBSERVATIONS (continued)

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IV. INVESTIGATIVE OBSERVATIONS (continued)

2006 unless otherwise instructed.”37

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IV. INVESTIGATIVE OBSERVATIONS (continued)

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IV. INVESTIGATIVE OBSERVATIONS (continued)

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IV. INVESTIGATIVE OBSERVATIONS (continued)

5. Replacement Check and Written Agreement

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IV. INVESTIGATIVE OBSERVATIONS (continued)

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IV. INVESTIGATIVE OBSERVATIONS (continued)

Privileged & Confidential – Attorney Work Product 25