Lawyer accuses auditors of ‘hatchet job’ in City of Industry invoice review

Auditors hired by the City of Industry to review millions of dollars in payments to businesses owned by former Mayor David Perez and his relatives produced “a hatchet job” on the family, a lawyer for the companies wrote in a letter to the city Thursday.

Attorney Stephen Larson accused City Manager Kevin Radecki of using KPMG auditors’ findings to improperly justify canceling the city’s contract with Zerep Management Corp., which for decades had provided services such as landscape maintenance, building upkeep and trash collection in the San Gabriel Valley industrial suburb east of Los Angeles.

“Now, after 45 years of doing business in the area Zerep and the Perez family are being slandered, impugned, and attacked based on the biased and unsubstantiated conclusions in the KPMG report,” Larson wrote.

His letter was in response to Radecki’s request for records from the family’s trash-collection business, whose contract with the city is under review. Radecki terminated Zerep’s broader general maintenance contract last September.

Neither Radecki nor the author of the KPMG report could be reached for comment Thursday night.

Auditors brought in after Perez resigned as mayor in 2012 found that his family’s businesses had reaped $326 million from city contracts since 1995. Their review concluded that the companies’ invoices lacked detailed descriptions of the work performed.

“Without supporting documents or detailed description of the services rendered, it is nearly impossible to determine with absolute certaintly that the labor and equipment costs as identified on the invoice are reasonable, accurate and commensurate with the work performed,” the auditors’ report noted.

Larson’s letter challenged the findings and noted that the city had reviewed and approved Zerep’s invoices for three decades before beginning in December 2013 to demand detailed billings.

The state controller’s office and the Los Angeles County district attorney’s office have opened separate investigations into the financial dealings between the city and the ex-mayor and his family businesses.

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