MLS stripped the team of $1 million in future general allocation money and said the Galaxy will not be allowed to acquire players coming to MLS internationally during next summer's transfer window. MLS also said former general manager Dennis te Kloese must submit an application to the league office if he wants to be hired by any MLS team.
The league said Friday that Pavon should have been classified a designated player who counts only partly against the salary cap.
Klein was suspended through the primary transfer window, which usually runs until early May. Head coach Greg Vanney was promoted to sporting director during Klein's suspension and will report to Dan Beckerman, president of the parent company Anschutz Entertainment Group.
Pavon joined the Galaxy on loan from Argentina's Boca Juniors and was listed as having a $1.2 million salary in 2019 by the Major League Soccer Players Association.
LA attempted to re-sign him ahead of the 2021 season, but Pavon was accused of sexual assault in his native Argentina while the Galaxy were working to secure his permanent acquisition from Boca Juniors.
"The LA Galaxy entered into agreements that were not disclosed that included payments that were not accounted for in the calculation of Cristian Pavon's salary budget and roster category,'' MLS said in a statement. "The undisclosed agreements and payments resulted in the improper classification of Pavon as a target allocation money player in 2019, who should have occupied a designated player slot.''
An MLS team can use general allocation money to "buy down'' a player's salary budget charge.
Target allocation money can be used to sign new players whose salary and acquisition costs are above the maximum salary charge or to convert a designated player to a non-designated player.