Money Missing, Little League Lawsuit Alleges : Sports: Continental Little League directors sue four former league officials in the second Escondido youth sports scandal in a year.

In the second scandal in a year involving the finances of an Escondido youth sports program, the directors of the Continental Little League have sued four former league officials, alleging that more than $25,000 in league funds are missing.

The four were accused in the lawsuit of committing acts of “fraud and deceit” and of breaching their duty to the league.

Chief among the accusations are that cash profits from snack bar sales during the 1989 baseball season were thousands of dollars less than expected and that there was not a full accounting of snack bar sales, that the treasurer made personal purchases with league funds and that money was paid to a sporting goods store--now out of business--for which there are no receipts or goods received.

The lawsuit’s language is at times ambiguous and falls short of alleging theft, but the attorney for the league said he is pressing for a criminal investigation.

The lawsuit does not make a complete accounting of how much money is believed to be missing, promising only to show the figures at the time of trial.

“This goes way beyond sloppy paperwork,” said Michael Curran, an attorney hired by the 1990 board of directors for the baseball league, one of three serving Escondido youth. “There’s no way to explain what we found (in an audit) that can be reconciled by poor financial management. This was clearly intentional.”

The attorney for the four defendants said the allegations are false, “and my clients have instructed me to get this matter in front of a judge as soon as possible so they can be vindicated.”

“The lawsuit is grossly inaccurate, and their reputations in the community are on the line,” said Matthew Herron, the lawyer representing the four. “They’re taking this very seriously, and if we could, we’d get this in front of a judge tomorrow, if not today.”

Curran said the directors decided to pursue the matter in court “because they have a fiduciary obligation to try to recover some of this money.”

League officials say they have set aside $15,000 to pay the legal costs of pursuing the lawsuit.

Regional officials of Little League Baseball Inc. in Orange County did not return phone calls to their office Friday.

On their face, the charges are similar to ones that rocked Escondido’s North County Youth Soccer Assn. earlier this year, when its treasurer, Paula Archie, pleaded guilty to taking $51,000 in league funds to help cover personal business debts. She was sentenced to 60 days in jail and five years probation, and ordered to pay restitution.

In 1987, Joe McDowell, then president of the Fallbrook Youth Soccer Program, was ordered to pay $21,000 in restitution after pleading guilty to reduced charges of embezzling $13,000 in candy fund proceeds.

No criminal charges have been sought as a result of the current controversy, but Curran said the organization is assembling records for review by the Escondido Police Department, to determine whether the case should be forwarded to the district attorney’s office for possible prosecution.

Targets of the civil lawsuit, filed Oct. 1 in Vista Superior Court, are Pam Farmer, treasurer of the Continental Little League during the 1989 season; her husband, Dave Farmer, league equipment manager; Jane Lake, snack bar coordinator, and Tom Klein, president of the board during that season.

Among the specific accusations:

* The snack bar showed a net profit of about $2,300 for the season, about a fourth of profits recorded the previous and subsequent years, and with little documentation of the cash revenue.

* More than $2,000 in payments to a now-defunct sporting goods store cannot be accounted for with receipts or merchandise, leading to an “unexplainable double debit.”

* More than $500 in cash involving the 1989 league registration was not reported as having been returned to the league’s bank account.

* Postage expenditures of $415 were reported by Pam Farmer, although there was no explanation as to how 1,200 first-class stamps were used.

* The Farmers allegedly purchased unspecified personal groceries and other items from two discount grocery and supply outlets at the same time as they purchased league groceries and supplies, but didn’t deduct their personal items when they were reimbursed by the league.

* About $600 in a raffle fund-raiser is missing, and $200 in petty cash given to Lake does not have documentation of how it was spent.

Moreover, the lawsuit contends that Pam Farmer and Lake “failed to conform with standard or even reasonably accurate methods of accounting otherwise utilized in Little League Baseball” and similar organizations. Checks and check stubs are missing, accounting reports differ substantially from bank statements and “substantial amounts of cash known . . . to have been in the possession of (Pam Farmer and Lake) have not been deposited to any account of plaintiff (and) the whereabouts of such funds is unknown.”

The problem first surfaced when a routine, year-end audit of league finances in November, 1989, generally indicted the league for poor bookkeeping.

Escondido certified public accountant James K. Vander Spek found, among other things, that “treasurer reports were incomplete and not useful, there appeared to be no budgetary control over money spent (and) no registers or journals were kept to trace cash receipts.”

At a follow-up meeting of the board of directors that was attended by two representatives of the national Little League Baseball Inc., members traded charges and accusations about the league’s financial straits.

Bill Robards, the 1990 president of the league, which serves about 550 children between the ages of 6 and 14, said parent directors of the organization were distressed that the 1989 season ended in a $3,389 net deficit and unpaid bills. In contrast, the 1990 season ended with a net income of about $22,000.

Especially curious to the board, he said, was the fact that the snack bar generated only about $2,200 in profit under Pam Farmer’s and Lake’s supervision, even though it generally generates $8,000 to $10,000 in profit during a season.

Confounding the issue, he said, was Pam Farmer’s failure to make nightly cash deposits from snack bar sales, as was expected of her. Instead, she made several irregular, lump-sum deposits, he said.

Robards said that, for the following 1990 season, two persons were charged with counting the snack bar proceeds nightly, a journal of cash receipts was maintained and nightly bank deposits were made.

The four defendants were stopped by their attorney from speaking publicly on the issue, although Pam Farmer, who also is an active parent volunteer with Escondido’s youth soccer organization, told The Times last November about that group’s scandal: “This is a pretty cheeky thing for someone to do to our kids. This is sad. It’s distressing, and it’s disappointing, and I can imagine how devastated (the soccer league’s board of directors) must be.”

Herron said he was preparing a defense response to the accusations, as well as a motion for the entire suit to be stricken.

“This is one of those things where you can make a bold (accusatory) statement, but to rebut it, you have to get involved in the specific, particular facts.”

He said the snack bar made little profit simply because neither Pam Farmer nor Lake was given instructions by the board of directors to try to make a profit on snack sales.

“They were told, and they understood, that the snack bar was a courtesy to the parents and the kids, and wasn’t intended to be a profit center,” he said. “When they took it over, they didn’t have any direction on how to operate the snack bar. They had to figure it out themselves, and they did it themselves.”

Herron criticized the board for not monitoring Farmer’s actions during the year. “She prepared monthly accountings, which she gave the board, and nobody said, ‘Hey, you’re not making enough money on this.’ ”

He said the accountant’s review of the books was unduly harsh.

“The CPA didn’t say money was taken, just that ‘I don’t like the way you set up your books.’ Well, this is a lady who is volunteering her time, who is not an accountant, and who kept the books in her checkbook. Cash receipt journals are technical accounting things, and nobody told her to set it up like that. She did the best she could.”

He said the Farmers frequently made purchases on behalf of the league at the Price Club--at which times they may have made personal purchases as well--and were then reimbursed by the league. But, he said, the Farmers separated the costs when they sought league reimbursement.

And he ridiculed the process server who confronted Pam Farber with the lawsuit as she was parked in front of an Escondido school, versus serving her at home, out of public view. “That was a cheap shot,” he said.

“They’re all very hurt by this, and the only thing they can do is defend themselves in court,” Herron said.