California taxpayers falling for a scam thats cost victims millions. What you need to know and whats being done to stop it. Heres chief Investigative Reporter. Thanks for joining us. For the next 30 minutes we investigate exposing government wastes, uncover issues that make a difference, and asking questions that sometime make the powerful uncomfortable. We begin in a major bay area university. Its an issue of conflict and questions at san jose state. An investigation that started with students and faculty calling nbc bay area accusing the university of a coverup and calling for accountability at the highest levels. Tonight, we investigate missing money and questionable decisions. Inside this building, inside these classrooms professors talk about equity, fairness, and the principals of justice. This is the Justice Studies Department. Is justice served here . No. Shes a professor in the department. If San Jose State University thinks that what happened at the department is done with and justice was served, i openly disagree with them. Did the university do the right thing here . In my eyes, no. Reporter hes a former staff member. He served as the department coordinator. For me it just seems like things got swept under the rug and everything was aokay. The concerns in question center on former Department Head dr. Mark correia, questionable spending and this university investigation. Im really alarmed about it. Im really alarmed that San Jose State University isnt more concerned that it looks like tens of thousands of dollars were taken and misused. Reporter some of the spending centers on this unauthorized off campus Checking Account. The nbc bay area Investigative Unit obtained a copy of this letter sent by then justice studies Department Head dr. Correia to dean charlie bullock. It includes, im embarrassed to say there were some inadvertent personal charges which i reimbursed. The investigation seems to me like a coverup. Reporter an official investigation by the finance department followed. It found the head of justice studies had used nearly for personal items and expenses that included an ipad, plane tickets, Wireless Phone charges, and parking tickets. He gets caught, he reimburses the money. Apparently nothing else happens. Right. Is that justice . Absolutely not. Thats not justice at all, yeah. Thats theater, basically. Reporter so after he was questioned about the unauthorized Checking Account, after he closed the account and admitted to spending 6800 on personal items, dr. Correia returned the money. San jose states investigation concluded there was no indication of fiscal impropriety p, no deliberate fraud, theft, or embezzlement. They declared that no fiscal im pmpropriety occurred. It doesnt make sense. Should the university be embarrassed about this investigation . Oh, absolutely. Absolutely. And even more so because it happened in the Justice Studies Department. Reporter following the investigation san jose state students organized an online petition. So far more than 300 signatures calling for a more thorough investigation. If youre a faculty or a high position employee on this campus that you can get away with anything, thats the message that is being reporter some students, staff, and faculty want the university to dig deeper. Their concerns center on tens of thousands of dollars in some of these contracts they say dr. Correia awarded to Close Friends and other the situations he made rile running the department. There were favors that were given, course releases to professors for bogus service work. I mean, there was just a long list of financial abuses that were never dealt with. Reporter the accusations were included in this 16page whistleblower report sent to the california state auditor last year. We contacted san jose state to answer the concerns raised by students, staff, and faculty members. Hey, tony. You got a couple of moments . Reporter after declining a request for an interview we met sean bibb on campus, Vice President of administration and finance. His department conducted the investigation. Are you satisfied with your investigation . Im satisfied the university received all of its facts. Reporter the investigation that concluded there were no fiscal impropriety despite finding use of an unauthorized Checking Account for personal expenses by a university Department Head. Our definition of fiscal impropriety is were made hole, if we didnt lose any funds and we did not, in the end we did not, no fiscal impropriety occurred. Dan bullock, how are you . Charles bullock also declined our request for an oncamera interviewed. Are you satisfied with the conclusionses of this investigation . I werent, i would be doing more. Whats your answer to their claim that you didnt go far enough . I think i just showed you. Seems to me that what i thought needed to be done was done. Reporter hes in charge of the Justice Studies Department. We met him at the san jose airport. But does it add up there were no fiscal improprieties with an unauthorized Checking Account . Does it add up to you . Your students, your staff, and your faculty say that the investigation raises questions. And i said to you if thats all there needed, to be more, i would have asked for that. Reporter so the universitys Investigation Called for no discipline and the findings were not turned over to university police. The only recommended corrective action, a request to send out a memo to the department. On Department Head mark correia, we dont know if hes displand but he accepted a deans position at indy Nan University in pennsylvania. Dr. Correia did not return our calls or emails. So, how do top administrators in san jose state respond to the controversy that unraveled in the Justice Studies Department . Help our viewers understand why you did nothing until this issue showed up on tv. When we come back, answers from the president of the san jose state and both are calling for a closer look. At issue, justice in the Justice Studies Department at san joesz state. We continue our investigation now. In the days following report you just watched top administrators were forced to react and respond. Actions including a resignation and a call to the Chancellors Office in long beach by san jose states president. Correia that was inappropriate, whether it was intentional or it was inadvertent, what he did undermined the trust that public students and reporter following our original investigation san jose states president sat down to answer our questions and address the conflict and controversy inside the Justice Studies Department. Help our viewers understand why you did nothing until this issue showed up on tv. I was concerned about that, the narrow report that we did on campus. I was not i was concerned and thats why i asked our Chancellors Office to look at that issue closely and base their findings we will take appropriate actions. Reporter that does not explain why san jose states president and university took no apparent action in the weeks and months that followed the universitys own internal investigation. This report was completed in may of 2013. Can you help us understand why it took a year to ask for a deeper investigation . Well a review that was done by the campus was very narrow. And im concerned. Thats why i asked the Chancellors Office to do a more total review of that and audit of that department. This institution makes a living out of giving out grades. Right . What grade would you give san jose state on this investigation . Thats why i stated earlier, we are reviewing this by an outside entity and based on their review we will take appropriate actions. And if that response to our question sounds redundant and possibly rehearsed, it should. We listened to san jose states president provide that apparent stock answer to many of our questions. Im really trying to work hard here to give you all the respect you deserve but youre not answering my questions. Help me understand why it took you a year to call for a further investigation. I say to you earlier you havent. You havent answered it, sir. We have asked the Chancellors Office to review the issue. And based on their findings, we will take appropriate actions. Reporter and there was more fallout in the days following the report. Your students, your staff and your faculty say that the investigation raises questions. I said to you if thats all, there needs to be more investigation, i would have asked for that. Asking Charles Bullock responsible for the Justice Studies Department and called for the original investigation. In this email he announced as of july 1, 2014, i will no longer be dean. And it included, i will be retreating to the faculty. Did dean bullock resign, was he forced out . What led to the decision . Its a fair question, tony. But its a Personnel Matter and its a confidential matter. I cant discuss the reasons for the dean returning back to faculty. Reporter Andy Feinstein is the second most powerful person on the san jose state campus. Sources confirmed that provost feinstein met with dean bullock days following the investigation, days before the dean stepped down. Can you answer if he was forced out or if he resigned . I cannot. Are you happy with the way this unfolded in justice studies . I think were not happy about what unfolded in justice studies. We also and the president and i both agree that the initial investigation was too narrow and was not thorough enough and i think thats one of the primary reasons why the president has requested from the Chancellors Office a complete investigation of what occurred in justice studies. During the past several weeks a team of auditors from the Chancellors Office has dug deeper into tissues we uncovered in the Justice Studies Department. Results of that new audit are expected in the coming weeks. Up next, we change venues, from campus to cabs. What would a driver have to do to actually have their permit suspended or revoked . Well, again, theres a system in place. And they would, you know, im not prepared to answer immediately. We investigate what you dont know about the driver behind the wheel of your cab. We dig into driving records and uncover criminals still on the road. When you hail a taxi in San Francisco you probably expect them to have a good driving record. Otherwise they probably wouldnt be in that business. Tonight, Investigative Reporter takes us inside San Franciscos cab business for an up close look at cabby drivers and a question at who is watching out for you. Reporter theyre licensed, city approved, San Francisco taxicab drivers. Was it hard to get a license . Reporter that we found also have lengthy traffic records, one is even on californias sex offender registry and others that sometimes cross the line. Did you see who hit you . Yeah, it was a tax i can driver. Reporter adam ludwig hailed down a yell he cab but says the driver ran over his leg after refusing to drive him home. He took off. Took a sharp turn. Knocked me over and broke my left leg. Reporter leaving the longtime run were this tig titanium rod. Ludwig sued yellow cab. They said there were no yellow cabs at the time in location and there are several pirate yellow cabs in San Francisco. Still, a jury awarded ludwig 415,000 in damages but the driver who ran ludwig over was never found nor held responsibility. He got away with a hit and run. Reporter Investigative Unite discovered others with questionable driving habits. In a single day we rode in more than a dozen cabs and pulled the driving records of each cabby. Only two had clean records. We found 46 violations ranging from no registration or valid license to running red lights. One driver even had nine citations in just the last year and a half. Three of those were for speeding. If i got nine citations in the last year and a half, my license would be suspended. How can a driver still have a licen license . I would have to look into the specifics of the case. Its hard for me to response without knowing all the information. Reporter kate is with the transportation Municipal Transportation Agency which oversees taxis in the city. She says the agency can suspend or revoke a drivers permit but the Investigative Unit discovered sfmta only requires it for new applicants or when a driver is applying for a medallion. Public safety is serious. Reporter they also rely on public complaints and takes action accordingly. But we dug through hundreds of complaints and found sfmta is slow to follow up. Despite reports of fare refusal or rude behavior, majority of the time the city just advises a driver of a complaint. 2 of the time a citation is issued. And fewer than 1 have their taxi permit suspended. What would a driver have to do to actually have their permit suspended or revoked . Well, again, theres a system in place and they would, you know, im not prepared to answer immediately. Reporter she does say drivers have to pass a driving test and, quote, have no prior convictions of a crime that would, in the judgment of the sfmta, present a risk to public safety. Meaning, its up to the discretion of the agency to decide whether the driver is dangerous. Are you aware that you have registered sex offender as a medallion holder . I dont want to comment on any specific individual. I just want to be broad in my response. I think the public would be surprised to know that. Well, im aware that there may be an individual and this is something that has, again, everybody has due process. Reporter this taxi driver was convicted of a felony after he arranged to meet a minor for a sex. We asked him how he got through the permitting process. I was honest with them. You told them . Yeah. Reporter sfmta decided he wasnt a public risk. Adam ludwig says whether its a criminal past or dangerous driving habits, it appears the system allows some San Francisco taxi drivers to avoid accountability. Sounds like whats going on there is a result of lax enforcement. It us thent seem like there is a huge consequence. Well, ill certainly look into this and see if we have taken appropriate action and if Going Forward then whats that we can focus on. A couple of pointers. If you have a problem with a taxi or the driver, sfmta wants you to file a complaint. And keep in mind, cabs do have cameras inside but the recordings are only kept for 72 hours. So make sure you request for that video is quick. Now, when we return, its a call you dont want to receive. Its the largest scam of this type that im aware of. Who is calling and why answering the call has cost californians a Million Dollars so far. Thats next. So raise your hand if youre looking forward to a call from the irs. Well, youre not alone. Tonight a scam alert. The latest twist on an old trick, one thats convinced thousands of taxpayers into paying out millions of dollars. Investigative reporter steven stock has learned california is getting hit the hardest. Reporter the calls sound eerily similar. They said that they were calling from the irs. Reporter tens of thousands of them. Im calling you from irs. He identified himself from the department of treasury. Reporter in the last eight months alone federal criminal investigators have already counted more than 60,000 of these calls made across the united states. All of the calls in some way threaten the person receiving them with arrest or irs legal action if the phone call is not returned. Before you get arrested yeah, it make me it scared me. Reporter a native of the philippines got the call at his Castro Valley home right before tax day. We have received a legal notification notice against your name kerping the tax fraud, tax evasion. So before we take this matter to the federal claim courthouse or before you get arrested, can you call us back on the call back number. I was shocked because it was totally unexpected. I never visit so why he call me. When i first heard it, wait a minute, is this possible . Reporter bob got four different calls. He works in sales at nbc bay area in a division separate from our newsroom when he found out we were investigating oh, he came forward to share what his callers told him. I need to call them right away because i was at risk of having my wages garnished, my house repossessed, and possible arrest. Its the largest scam of this type that im aware of in my 23 years of Law Enforcement experience. Reporter tim should know. He started his career as a criminal investigator for the irs back in 1985. Hes now Deputy Inspector general at the treasury Inspector Generals Office in washington which oversees the irs. Part of the scheme would involve the person pretending to be the Internal Revenue service actually having some digits of your Social Security number and they tell you those digits. When that matches, a lot of times people are then inclined to believe it is the irs. Reporter investigators say the callers tend to target immigrants and the elderly and could likely be the work of organized crime, both here and overseas. Impersonation of the irs impugns the integrity of the Internal Revenue service. Reporter so in people believe the callers and send in checks that criminal investigators which tracked 4 million sent to the scammers nationwide just since last object. And thats just those who have reported being scammed. The actual loss would be two to four times higher. Generally before the irs will ever contact you on the telephone you will receive multiple notices in the mail. Reporter our investigation found that out of 4 million lost to this scam nationwide, a fourth of it, more than a Million Dollars, has come from california. New york state finishes a distant second with a half Million Dollars lost so far. So if you get a phone call like this, dont return the call. No matter how official sounding and urgent the voice may be. It really makes me mad that how people like that trying to target senior people like me. Reporter heres a good note. None of the people we talked with paid the scammers. Now, if you do get this phone call the irs wants you to call them, not the number left on the message. Now, now. Now, if you have a story for us call us on tip line at 888996tip 888996tips. Thank you for watching. Youre invited to watch us regularly right here on nbc bay area. You might ask us why. Our answer, because we investigate. Good night. The president calls for patriotic profit supposing tax loopholes while the markets hit new highs is the Corner Office even listening . My attitude is i dont care if its legal its wrong. A look at americas role in a world with renewed conflict. Former secretary William Cohen on the cost of prices in europe h and the middle east. Holy billions batman. One of the richest superheroes turns 75. Why the capedcrusader is a big winner in gotham and around the globe. 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