Daily Labor Report

®
NUMBER 19 A-8 JANUARY 29, 2013

Service Employees

Former SEIU Official Freeman Convicted On 14 Counts, Including Embezzlement

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yrone Freeman, a former official of the Service Employees International Union, was convicted on federal charges of embezzling tens of thousands of dollars from his union local, the office of the U.S. Attorney for the Central District of California announced Jan. 28 (United States v. Freeman, C.D. Cal., No. cr 12734, verdict 1/28/13). The Jan. 28 jury verdict came after a 10-day trial before Judge Audrey B. Collins of the U.S. District Court for the Central District of California. Freeman, the former president of SEIU United Long Term Care Workers Local 6434 and a former member of the SEIU international executive board, was found guilty of seven counts of embezzlement and/or theft of labor union assets, four counts of mail fraud, one count of making a false statement to a federally insured financial institution, and two counts of subscribing to a false tax return. The charges carry combined maximum prison sentences of more than 200 years. Freeman is scheduled to be sentenced by Collins April 22, according to the U.S. attorney’s statement. Freeman was indicted by a federal grand jury last July on 15 charges brought after an investigation by three separate agencies of the Labor Department, as well as by the Federal Bureau of Investigation and the Internal Revenue Service (148 DLR A-11, 8/1/12). One of three charges involving Freeman’s tax returns was dismissed by the prosecution prior to the trial.

A spokesman for Local 6434 told BNA Jan. 29 that the case has been stayed and a status conference scheduled for this week has been postponed because of the verdict. He said the local will have a better idea of its next steps when the status conference is rescheduled. ‘‘Today, a jury of his peers found Tyrone Freeman guilty of 14 counts brought by the federal government for actions taken while he served as president of 6434,’’ according to a statement from the local provided to BNA. ‘‘Although these charges represent a challenging time for the local, the members of SEIU United Long Term Care Workers (ULTCW) have moved on to build one of the strongest unions in the state, dedicated to achieving social and economic justice for all Californians.’’

Local Lawsuit Seeks $1.1 Million From Freeman. The conviction comes more than four years after SEIU permanently banned Freeman, who headed the union’s largest local in California, from holding union office or membership in light of evidence that he had misused union funds (230 DLR A-5, 12/1/08). After a report by an outside hearing officer found Freeman had engaged in a ‘‘pattern of financial malpractice and self-dealing,’’ SEIU ordered him to make restitution of more than $1.1 million to return all misappropriated local funds. A lawsuit filed by the 160,000-member Local 6434 in 2009 seeking to compel Freeman to pay the fine (64 DLR A-1, 4/7/09) has been on hold in the Los Angeles County Superior Court at the request of the federal government while it pursued its case.
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Freeman Pilfered Money From Local. Evidence presented during the trial showed that Freeman pilfered money from Local 6434 by diverting to himself reimbursement payments from a public sector union— California United Homecare Workers—that were meant for his local. According to the indictment, Freeman collected $2,500 a month from Local 6434 and CUHW, which was established in 2005 by SEIU and the American Federation of State, County, and Municipal Employees to represent public sector employees in the home care industry in California. Freeman, who served as president of both organizations, concealed from the Local 6434 executive board and the CUHW executive board that he was receiving the payments of $2,500 per month in addition to his regular salary from Local 6434. Freeman also was found guilty of using a Local 6434 credit card to charge more then $8,000 in personal expenses he incurred during a 2006 trip to Honolulu, which included expenses related to his ‘‘purported’’ wedding to Pilar Planells, his executive assistant at the union local. According to a trial memorandum filed by the prosecution at the beginning of the trial, at the time of the wedding, Freeman was still married to his first wife. Freeman also was found guilty of underreporting the amount of income he earned on his taxes for 2006 and 2007 by failing to report about $63,000 of income he received. He also was found guilty of lying to Countrywide Bank when applying for a home loan of nearly $700,000. He falsely told the bank that Local 6434 paid for his personal American Express credit card debt and the monthly lease payments for his Land Rover, when it did not.
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2 ‘‘This was a case about abuse and betrayal,’’ U.S. Attorney Andre Birotte Jr. said in the Jan. 28 statement. ‘‘Freeman abused his position as leader of the SEIU, and he betrayed the hardworking people whose interests he was supposed to represent.’’ The trusteeship took place after Rosselli, then president of UHW, and rank-and-file leaders refused SEIU’s demand that 65,000 long-term-care workers—almost half of UHW’s membership—be moved to a new longterm-care workers local. At one point, prior to Freeman being expelled from SEIU, it appeared that all those workers would be put into Local 6434. Rosselli always contended that the trusteeship was imposed because he spoke out about the corruption by some SEIU leaders, including Freeman. He accused the international of accepting lower standards for existing nursing home members in exchange for organizing rights at nonunion workplaces (28 DLR A-7, 2/12/08). In his statement on Freeman’s conviction, Rosselli charged that officials of SEIU ‘‘were made aware of financial problems in 6434 and its predecessor unions years before this scandal broke publicly and did nothing to prevent this catastrophe because Freeman was blindly loyal to the leadership of SEIU.’’ Neither of Freeman’s two attorneys could be reached Jan. 29 for comment on the verdict. A call Jan. 29 seeking comment from SEIU was not returned.

Conviction Vindicates NUHW, Rosselli Says. Sal Rosselli, president of the National Union of Healthcare Workers, issued a Jan. 28 statement in response to the conviction. Rosselli contended in the statement that the conviction is a ‘‘vindication of the leaders and members’’ of NUHW ‘‘who were forced out of SEIU for raising questions about corruption and their refusal of an order from then-SEIU President Andy Stern with the support of current SEIU President Mary Kay Henry and SEIU United Healthcare Workers President Dave Regan to have 65,000 California homecare workers handed over to Freeman’s SEIU Local 6434.’’ In 2009, SEIU placed its California local—United Healthcare Workers-West—into trusteeship and removed its officers, who went on to form the rival union NUHW (17 DLR A-17, 1/29/09).

BY MICHELLE AMBER

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2013 BY THE BUREAU OF NATIONAL AFFAIRS, INC.

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ISSN 0418-2693

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