Who want to know where the money is . Plus, this man was prominent in the sheriffs advisory pour bord now accused of stealing more than 1 million from investors. Now he is doing time after we investigate. Here is chief investigative reporter, tony kovaleski. Thanks for joining us. For the next 30 minutes, we investigate. And holding those in power, accountable. We begin with the safety of public transportation. A popular choice for commuters and getting to levi stadium. We dug into inspection records and uncovered safety concerns. Investigative reporter vicky nguyen found faulty wheels, potential for headon collisions and other issues that show vta has been slow to fix. Reporter vta trains travel at a top speed of 55 miles an hour, carrying 30,000 riders a day and sharing the road with thousands of cars. A vta insider with knowledge of how these trains are maintained and operated asked to be disguised for fear of being fired. Is safety a priority at vta . Only when caught by the state or federal government is it than a priority. The public records question, Investigative Unit requested these state inspection reports that reveal vta failed to properly maintain critical signals and many of its trains. The reports detail safety hazard that could lead to derailment and trains colliding head on. In a report summary from february 2013 inspectors wrote vta willfully violated safety procedures and cpuc regulation and vta doesnt have the capability to maintain and repair safe vehicles. In one announced visit that month, multiple wheel defects and worn out tread on trains. What risk does that pose to people riding or operating these trains. It is a risk of derailment. When your inspectors found these problems, what did they instruct vta to do is. Not run those vehicles. And we found that they did run them after that. King says as recently as last month, more than a year after inspectors first cited problems, vta was still sending out traines with condemned wheels. Was vta at any time operating trains with defective wheels . No. Michael is in charge of operations at vta. He said he didnt know that vta was running chains on wheels that didnt meet safety standard until we showed him the inspection report. This report says that one of the vehicles that inspected departed for service with condemned wheels. Im not aware of that. Last may, they instructed service to replace wheels out of compliance. Thats nearly a third of the entire fleet. But thats not vtas only problem. Did vta have multiple incidents last year where trains were headed toward each other on the same track . No. Except that i will tell that you we operate single track sec sections so there are places where trains have to wait for a train to go in the opposite direction if that makes sense. Vta says there were concerns about signals being crossed and those trains potentially colliding headon. Are you saying thats not true . Cpc may have that concern. We do not have that concern. Inspectors had that concern because of this. Multiple incidents in 2012 and 2013 where inspectors found problems with signals allowing trains to head toward each other on a single track in potential headon collisions. There would be signals between the trains. There would be other place for the trains to stop or where the train would be required to stop. Should that happen at all ever . On if there are signals in between, should two trains be heading toward each other . No. The report notes various reasons from Defective Electronics on signal to confusion for vta controllers. In one instance inspectors saying they are concerned trains were both traveling at a high rate of speed 55 miles on hour and 45 miles an hour toward each other. Before they stopped. It happened here on the line between fruit veil and lets give you a better look from the sky. This is 1. 5 mile stretch of track that north and southbound trains have to share. If they continue traveling at those speeds, they would have collided in less than a minute. There has never been an incident where vta trains or an accident or vta trains were in a headon collision. It disturbs me he is minimizing the problem. Theirs just lucky. A rail safety expert spent 20 years as an inspector with the National Transportation safety board. We asked him to review the state inspection reports. It tells me that this maintenance problem has been going on for a long time. To the point now where it is going to take a major fix to come back up to speed and make sure the cars are up to standard. Inspectors say they are now asking the state commission for the power to Issue Citations when transit agencies dont fix their safety violations. Time has run out. They have had plenty of time to fix this. It hasnt gotten fixed. Meantime, the Agency Working to fix the signal and wheel issues. Vta is a very safe operation. We have very professional operators and i encourage everyone to ride vta. Vta was running a little more than 50 of the existing trains earlier this summer. The agency now tells us it has added trains to its route but cant confirm just how many. Also, as early as next week, the cpuc will look at a plan that allows inspectors to Issue Citations when safety problems arent fixed. Coming up, we investigate trucks and drivers hauling fedex goods on fedex routes but not official employees. Why it could be putting other drivers on the road at risk. Thats next. Youve probably seen them on the road. We are talking about fedex trucks. Weve learned not all those trucks and drivers belong to fedex. Instead, Third Party Contractors get paid to fall fedex goods on fedex routes some contractors operate illegally. Potentially putting other drivers in danger. Its here. A Federal ExpressDistribution Center if sacramento. A major hub in Northern California where hundreds of trucks come in and out everyday. Some with recognizable purple and green fedexo plastered on the side. Thats what drive th driver was going on august 8, 2011 after picking up packages from a Distribution Center just outside of sacramento. Quintero failed to stop his 25,000pound box truck for stalled traffic along interstate 5. He crashed into Donald Taylors parents care. Their bodies were burned beyond recognition. The High School Sweethearts dialed, in flames. A toddler also in a car. The truck driver survived. Quinteros had no valid license, let alone a commercial license to deliver fedex packages and they were doing business without authority. It was a red flag by the department of transportation. Quinteros was found guilty of manslaughter and other charges, and sentenced to 14 years in prison. But because he was considered an independent contractor for fedex, not an employee, the corporation with a was not held o responsible. Federal express did not want it discuss the situation. Didnt want to talk about it. We were told that a freight forwarder, fedex smart post contracts with Third Party Vendors with Transportation Services who agree it maintain their own d. O. T. Operating authority and as a result are responsible for any claims related to their operations. Meaning, fedex had nothing to do with the accident. They basically told us, not a problem, good away. Fedex says it makes sure that Third Party Contractors are operating legally. They use a vendor to monitor the department of transportation website for operating Authority Insurance and safety compliance. But remember, the Trucking Company did not have the required operating authority and records show they had safety violations against them before that deadly crash in 2011. Even so, drivers continue tran porting fedex goods. What has it happen is rules, effective enforcement, accountability by Companies Operating equipment and contracting for the services of these companies. The parting head of the safety administration, arguing that some companies dodge federal eversight, penalties are stiff when safety standard are poor. Highest penalty is we shut them down. Why use contractors then . They save a lot of money. We found another Third Party Contractor that appears to have slipped through the cracks. We spoke to this contracted driver who talked with transporting fedex goods. He looked up the transportation number on the side of the companys truck and discovered they have no insurance and this in may the government revoke heed their operating license. They told the Investigative Unit they stopped using that contractor in june. Finding out it lost its operating authority. For several days in july we saw them transporting fedex goods in and out. Anger. Just flatout pissed off. Its a Business Model that Donald Taylor says allows fedex to distance themselves when things go wrong. His route is only a fedex route. He does not do anything outside of Federal Express. There for, they should have immediate control. Donald taylor decided ton sue fedex after his lawyer advised him that California Law allows companies to hire Third Party Contractors. The Trucking Company which had a few employees is no longer in business. And finally the government tells us they are now looking into that Third Party Contractor we found operating without valid permits. When we return i just dont think thats proper use of taxpayer funds. We investigate why 2 million doesnt necessarily add up. We eval yit over a private clubhouse and one bay area community. Using private money for a public clubhouse. Sparking an intense debate in one community. Here is the idea and conflict. Use resident tax dollars for a facility that would be mostly off limits to many of those paying for it. It is a small town story with big implications for anyone living in a special tax district in california. Steven stock investigates. Take a look around. Next to the recently renovated exclusive swimming pool. The Sleepy HollowHomes Association clubhouse built in the 1950s is showing its age. Its in dire need of replacement. The Facility Needs to be replaced. Something needs to be done. Because it is falling apart. While almost everyone agrees, this clubhouse needs replacing with be this disagree about how to pay for it. I just dont think that is a proper use of taxpayer fund. These will build an emergency facility. Tax dollars from Sleepy HollowFire Protection district. 2500 or so resident in the district pay 17 of their base property tax to cover fire and emergency services. The Fire Districts threemember board is considering using 2 million of its tax reserves to build an already planned 2. 5 million clubhouse to replace the old one. While ecveryone has it pay the fire tax, not everyone is a homeowners association, which means they dont have access to the pool or clubhouse. John grubs serves as claireman of sleepily hollow claritiable foundation formed to raise money for and oversee the construction of the new facility. That is matched with 2 million from the Fire Protection district. Let me ask you, how critical is the 2 million to your project . This project as it currently stands is very critical. So critical that in fact the charitable website tracking donations has assumed its getting 2 million funding even though it hasnt been approved yet. I think the money could be better spent. Thats the rub for residents like john who lives across the street. He does not pay to be a member of the Homes Association for pool. Yet his tax dollars would go to rebuild the new facility if tax district officials approve the deal. It is taxpayer funds and it should be used tofor taxpayer purposes, not for building somebodys dream clubhouse. I think it is a misuse of tax payor dollars. This neighbor lived in Sleepy Hollow all his life. He is a dues paying member of the Homes Association and pool. There are many more ways to utilize that money than put it into a structure that is not going to be used for the Fire District. Fire district officials call this project quote an emergency shelter. They point to planned pages showing possible emergency uses including permanent Fire District office there. What your tax dollars are going for, which you have complete use of as a member of the public is Public Safety components of this building. Richard serving as treasure and spokesman for Sleepy Hollows district board. All three Board Members are also members of the Homes Association. This would be for any Public Safety person to anybody who want to come to it for free. There are people who are not members who pay taxes to your tax district, right . Right. Why is it appropriate for them to use their tax dollars to build this clubhouse. Were not building a clubhouse. But look at this. The marin county shows it a clubhouse. Including a library, coffee bar, wrap around porch and bocce ball. And parts of the building off limits to anyone who is not a dues paying member. Again, is this an appropriate use of tax dollars. It is an appropriate Public Private partnership to improve the safety for all of the residents all the members of the Sleepy HollowFire District. It is very difficult to distinguish cleanly between private purposes and public purposes. Teaching tax law at uc berkeley. He estimates there is as many as 5,000 special tax districts like this in california. And there is very little oversight. These district dont answer to the governor or anybody else on the state directly. It is using taxpayer funds for private organization. Some residents maintain even if the new building serves emergency functions once in a while, thats not enough to merit their tax dollars footing 80 of the construction bill. There are many other ways it use the 2 million to better serve the resident, all of the residents. By the way, the Fire District board already paid 25,000 for an architect to draw up those plans. The Fire District had another meeting earlier this month. But made no progress. And experts say voters only have a few recourses in a special tax district. They can organize a recall election or file a lawsuit in court. Up next prf will you explain . Will you explain . Sir, please stay away from him. Please dont touch the camera. Please dont push me. Results from the Investigative Unit. Why this man accused of stealing millions in a ponzi scheme is behind bars after we investigated. Stay with us. A former high Ranking Member of the santa rosa board and a high car dealer. Now he is behind bars. The d. A. Says he is part of a ponzi scheme. He entered a no contest plea on nine felony charges connected to 1. 3 million of missing money he took from bay area investors. Were just overwhelmed with the notion of having a hearing that finally justice is going to be done. She is one of nearly two dozen victims. She asked us to hide her identity. She is reacting to rons decision. He essentially entered a guilty plea. He is going to prison for what he did. Your reaction. Im stunned. He told the judge he was responsible for nine felony crimes stemming from 1. 3 million in investor money that disappeared. The defendant was running a ponzi scheme. In 2012 our investigation pointed bright life on invest amount that started with ad look this one in several area newspaperes. Promising a 10 return on investments into his car dealership. After collecting 1. 3 million from bay area investors, he stopped making interest payments. And he didnt want to answer our questions about their money. Will you explain . Sir, please stay away from him. Please dont touch the camera. Please dont touch me, sir. Excuse me. What do you say to the people who want to know where their money is . Why do you think he entered that guilty plea . If you look at the evidence against him and realize, certainly there is a level of satisfaction when a person comes into the courtroom and admits what they did. However i wont be satisfied until each one of the victims gets every dollar that theyve lost in this scam. Satisfaction. There can never be satisfaction in a situation like this. It is heart breaking. I think he probably thought he was invincible. By entering the plea and not taking it to trial, he now faces about four to five years in the state prison. On the phone, his attorney said he will not have a comment until after the sentencing that is scheduled for september 5th. So if you see something wrong and want us to investigate, this is your invitation to call our tip line or send an email. Thank you for watching. If you like investigative journalism, please join us regularly here on nbcbayarea. Why . Some report we investigate. Good night. Hi, everyone. Welcome to on the money. Im becky quick. New record highs. The markets heat up for august but will it be a september to remember . From former president s to billionaires, everyone seems to be taking the ice bucket challenge. Is it changing the way people give . And does it actually raise money . Investing for retirement with a set it and forget it plan. They are called target date funds but are they right for you . Why brad and angelinas new Business Venture might make you think pink and how that glass of rose could please your palate and your portfolio. On the money starts right now. This is americas number one Financial News program. On the money. Now, becky quick. Heres a look at whats