State Expands Shakedown Probe of Labor Inspector

A longtime state labor inspector arrested three months ago in the alleged extortion of a Los Angeles garment contractor has been accused by at least two other contractors of attempting additional shakedowns, California Labor Commissioner Jose Millan disclosed Monday.

California Justice Department agents are reviewing the new accusations against Howard Hernandez, a 17-year veteran of his agency, as part of a continuing criminal investigation, Millan said. When authorities arrested Hernandez in September, they said he had accepted $8,000 from a Korean-speaking middleman who worked with Hernandez in shaking down a Korean American garment manufacturer.

The Los Angeles County district attorney’s office, however, has not filed any formal charges against Hernandez or the alleged middleman, Edwin Kim, 41. Officials also disclosed that Hernandez, 46, who was placed on administrative leave with pay after his arrest, has resigned from his nearly $50,000-a-year inspector’s job.

Hernandez resigned late last week apparently to avoid testifying in a disciplinary hearing sought by the labor commissioner’s office, Millan said. Although the hearing would have focused on whether Hernandez should be dismissed, it could have put pressure on him to give testimony that could later be used against him in a criminal case.

Miguel F. Garcia, a Montebello lawyer representing Hernandez, acknowledged that the hearing was a factor in his client’s decision to resign. But Garcia said the primary reason Hernandez quit his job was that he “wants to get started in a new life. He wouldn’t have felt comfortable returning to the same position.”

Garcia denied any wrongdoing by his client and said he was not aware of additional accusations.

Millan, however, said that after Hernandez was arrested, two other Korean American garment contractors came forward to claim they also were targets of attempted shakedowns involving thousands of dollars. Millan said the contractors were referred to the Justice Department and that one or more additional contractors may have gotten in touch directly with that agency.

George Fawrup, a special agent supervisor with the Justice Department, confirmed that his agency’s investigation into Hernandez was continuing, but he declined to elaborate.

Millan expressed confidence that the Hernandez case will prove to be an isolated incident in the labor commissioner’s office. “The rest of my staff is diligent, honest and hard-working,” he said. “There’s a good chance that Mr. Hernandez was operating alone in this case without any additional assistance or collaboration from the staff here.”

At the same time, Millan said he has introduced procedures requiring inspectors to work with one or more partners when conducting garment industry investigations. Hernandez and Kim were arrested, authorities said, for extorting $8,000 from a small garment manufacturer, Two Thumbs Up, whose only official labor violation was its alleged failure to report a new business address.