01/05/2021 | Press release | Distributed by Public on 01/05/2021 16:10
LOS ANGELES, CA - The U.S. District Court for the Central District of California has sentenced John S. Romero - a former president of the United Industrial and Service Workers of America in Colton, California - to 12 years in prison for embezzling funds from the union's health plan, conspiracy and making false statements on annual government filings.
The court's action follows an investigation by the U.S. Department of Labor's Employee Benefits Security Administration (EBSA), Office of Inspector General (OIG) and Office of Labor-Management Standards (OLMS), and a 6-day federal jury trial. The joint investigation found that, from 2008 through 2014, Romero, son John J. Romero, daughter Danae Romero and ex-wife Evelyn Romero, embezzled hundreds of thousands of dollars from the union's health plan to pay for personal expenses.
The jury found Romero guilty of one count of conspiracy, 12 counts of theft in connection with healthcare and one count of making a false statement to a government agency. U.S. District Judge Virginia A. Phillips set an April 5, 2021, hearing to determine the restitution that Romero and three family members - who pleaded guilty previously to related criminal charges - must pay.
Investigators found health plan assets were used to pay for a $110,000 personal civil judgment; $40,000 for criminal defense attorneys in an unrelated matter; $25,000 to pay off a car loan; $310,000 disguised as rent payments to a shell company controlled by the Romero family; and $300,000 in fraudulent salary payments to members of the family. Romero and his son also filed a false annual report with the Department of Labor to hide more than $100,000 in union assets used for personal expenses.
Before surrendering to federal prison in 2010 for a previous conviction for making a false statement while he was president of a different labor union, Romero appointed Evelyn Romero to succeed him as that union's president and health plan's trustee. He also appointed Danae Romero and other family members to union officer positions without real elections. From prison, Romero directed the operation of the union and the health plan, which family members to appoint to union officer positions, and personal payments from the health plan's bank account.
'Appallingly, these individuals defrauded a union-sponsored health plan and conspired to line their own pockets,' said Regional Director for the U.S. Department of Labor's Employee Benefits Security Administration Crisanta Johnson, in Los Angeles, California. 'EBSA will continue to work aggressively with our law enforcement partners to stop the financial harm caused by these types of schemes.'
'We will continue to vigorously combat fraud, investigate these type of allegations and help bring to justice individuals that embezzle union funds and deprive participants of money they set aside to pay for their healthcare needs,' said Special Agent-in-Charge Quentin Heiden, in the U.S. Department of Labor's Office of Inspector General Regional Office, in Los Angeles, California.
'The Office of Labor-Management Standards will continue to seek prosecution of those union officials who victimize their membership though nepotism and the misappropriation of union funds for their personal financial gain,' said U.S. Department of Labor's Office of Labor-Management Standards District Director Edgar Oquendo, in Los Angeles, California.
The U.S. Attorney's Office for the Central District of California prosecuted the case.
Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa
Suspected unemployment insurance fraud should be reported to the Department of Labor's OIG Hotline by calling 1-800- 347-3756.
EBSA's mission is to assure the security of the retirement, health and other workplace related benefits of America's workers and their families. EBSA accomplishes this mission by developing effective regulations; assisting and educating workers, plan sponsors, fiduciaries and service providers; and vigorously enforcing the law.
The OIG is responsible for identifying and reducing labor racketeering and corruption in employee benefit plans, labor-management relations, and internal union affairs. Through its conduct of criminal investigations and collaboration with EBSA and other federal law enforcement partners, the OIG works diligently to ensure prosecution of individuals involved in the infiltration, exploitation, and/or control of a union, employee benefit plan, employer entity, or workforce for personal benefit by illegal, violent or fraudulent means.
OLMS administers and enforces provisions of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). The LMRDA promotes union democracy and financial integrity in private sector labor unions, and transparency for labor unions and their officials, employers and others. OLMS also administers provisions of the Civil Service Reform Act of 1978 and the Foreign Service Act of 1980, which extend comparable protections to federal sector labor unions.
The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.