The wife of the former head of one of the nation’s largest union locals has pleaded guilty to an income tax charge in connection with more than $540,000 she received in consulting payments from the Los Angeles-based labor organization.
As part of a deal with the U.S. attorney’s office here, Pilar Planells pleaded guilty earlier this month to a misdemeanor count of failure to file a 2008 tax return for the money that Local 6434 of the Service Employees International Union paid to a firm she founded. Planells is expected to be sentenced to three years’ probation next month, according to court records.
She must also pay about $130,000 in back taxes, interest and penalties, records show. The case against Planells grew out of Times reports in 2008 that focused on the financial dealings of her husband, Tyrone Freeman, who was later ousted as Local 6434 president. The federal investigation of Freeman is continuing, officials said Friday.
“It’s a very active case,” said a person close to the inquiry, who requested anonymity because of the sensitive nature of the matter.
Freeman’s attorney, Michael Zweiback, declined to comment.
Local 6434 represents about 180,000 low-wage workers who provide in-home healthcare. Before the scandal, Freeman was considered a rising star in the 2 million-member SEIU, a labor powerhouse.
The Times reported that Local 6434 and a related charity paid hundreds of thousands of dollars to Planells’ firm, Lotus Seven Productions, and her mother’s day-care service. Under Freeman’s direction, the local spent similar sums at a golfing resort, expensive restaurants and a Beverly Hills cigar lounge, according to records and interviews.
Fallout from The Times’ reports spread through the SEIU and cost other union officials their jobs. Still pending is a lawsuit the union filed against Freeman and Planells that seeks to recover more than $1.1 million allegedly pilfered. The money allegedly financed Freeman’s lifestyle of $175 glasses of cognac, $250 bottles of wine and a $3,400 trip to the NFL Pro Bowl in Hawaii. At the time, Local 6434’s members were paid about $9 an hour.
Under the plea bargain, the government agreed to not charge Planells with fraud and conspiracy to embezzle or steal from the union, records show. Planells’ attorney, Stephen Larson, said his client has not promised to testify against anyone as part of the deal.
“She has accepted full responsibility for what she was charged with and is looking forward to having this matter behind her,” Larson said.
A call to Local 6434, known as the United Long Term Care Workers, was not returned Friday. Freeman had said the payments to his wife’s company and mother-in-law’s day-care operation benefited his members because of the services the firms provided to them. Lotus Seven Productions, which was based at Freeman’s house, made videos promoting the union.