Union sues former executive for $1.1 million
The union of low-wage caregivers that Tyrone Freeman once headed has taken him to court to demand restitution of more than $1.1 million -- dues money that allegedly financed his lifestyle of $175 glasses of cognac, $250 bottles of wine and a $3,400 trip to the NFL’s Pro Bowl in Hawaii.
The lawsuit filed by a Los Angeles-based chapter of the Service Employees International Union opens another legal front in a scandal that dates to last summer and remains the subject of a federal criminal investigation.
In the civil complaint, brought in Los Angeles County Superior Court, the United Long-Term Care Workers accuses Freeman of misappropriating funds in a broad scheme to enrich himself and his relatives. Named as co-defendants are his wife, Pilar Planells; his mother-in-law, Carmen Planells; and the video and day-care companies they operated out of their homes.
The suit, which also seeks unspecified punitive damages and legal costs, alleges breach of contract and fiduciary duty and conversion of union funds for personal benefit.
Freeman and the Planellses could not be reached for comment, and Freeman’s lawyer did not respond to interview requests.
The SEIU removed Freeman from office after The Times published a report in August on his spending practices. Freeman and the Planellses had told the paper they did nothing wrong.
The Times report led to the criminal investigation, and the firings and resignations of several other SEIU officials and staffers. Freeman ignored the union’s subsequent order for repayment of the money, which was made after an internal hearing in the fall, SEIU officials say.
“We are going to do absolutely everything in our power to make sure that he is held accountable to the members,” SEIU spokeswoman Michelle Ringuette said Tuesday.
The suit maintains that the payments to the video and day-care companies could not be justified by the goods and services received. It says Freeman never disclosed to his executive board that he or his relatives stood to gain from the transactions.
Most of the local’s 160,000 members care for the elderly or infirm in private residences and nursing homes, and earn about $9 an hour or slightly more. Freeman, a onetime protege of SEIU President Andy Stern, had been a rising star in labor and political circles because of his stewardship of the local, California’s largest.
The suit contends that Freeman directed at least $755,000 to his wife’s video enterprise, Lotus Seven Productions, and that he had access to the funds after they were transferred.
It further alleges that Freeman arranged for expenditures of more than $300,000 for a voter registration program known as the 2M+ Project, and that some of that money went to a video firm called The Filming Co., which in turn made payments to Lotus Seven.
Other allegations are that Freeman had the local pay about $16,000 for his wife’s medical benefits when she was not entitled to them, and that he got “kickbacks” from his mother-in-law’s day-care company -- in the form of free care for his own child -- worth tens of thousands of dollars.
The suit says that the day-care firm received more than $500,000 in union money from January 2003 to August 2008. The payments were made through a worker-training charity that Freeman founded and controlled.
Freeman improperly paid himself about $31,000 from a second nonprofit he controlled, and $47,500 from an affiliated local he led, the California United Homecare Workers, the suit asserts.
After The Times inquired about Freeman’s spending at the Grand Havana Room, a Beverly Hills cigar lounge, he reimbursed the union $9,800, but he still owes more than $3,000, according to the suit. The expenditures allegedly were for cigars and a personal humidor at the celebrity haunt, as well as the cognac and wine, the suit alleges.
It accuses him of tapping union coffers to attend the 2006 Pro Bowl, cover about $8,100 in travel costs related to his Hawaiian wedding later that year and pay nearly $3,800 in cancellation fees for a reservation at a Santa Barbara resort.
The Times has also reported that Freeman’s local spent hundreds of thousands of dollars on a luxury golf tournament and expensive restaurants, according to the union’s financial statements. The local paid $16,000 to a now-defunct minor league basketball team coached by his brother-in-law, the records show.
Meanwhile, Freeman required employees of the training-center charity to work on partisan political campaigns, despite laws barring such activities, and then denied doing so to an Internal Revenue Service examiner, sources told The Times.