Hawaiian Gardens Union Members Found Guilty of Financial Fraud, Suspended Four Years

 

 

BY BRIAN HEWS • October 20, 2020

In June of 2019, Hews Media Group-Cerritos News obtained a written decision that placed Hawaiian Gardens AFCSME Local 3624, who’s president was Hawaiian Gardens resident Fred Licon, under receivership after allegations of serious financial fraud and administrative irregularities were levelled against Licon and others.

Those accused were Licon, Frank Amaro, Armando Soto,  Luis Polanco, Eric Leon, Claudia Raya-Ortiz, and Luis Gonzales.

In imposing the receivership AFSCME stated, “In our opinion, an emergency situation exists in Hawaiian Gardens….the local is threatened, the funds and assets of the local is threatened, and the local is acting in violation of the International Constitution.”

AFSCME President Lee Saunders placed 3624 under emergency receivership and named Field Services Director Kevin Brown as the administrator after the allegations surfaced.

The June front page article related to the receivership was deemed “offensive and dirty” and Licon and his friends down at City Hall immediately resorted to lies, petty theft, defamation, and a violation of free speech and the First Amendment in a misguided attempt to bury the story from the public; and they did it by stealing HMG-CN newspapers from City Hall.

But they could not stop the wheels of justice.

HMG-CN has obtained a second decision, dated October 16, that found Licon, Soto, Amaro, Polanco and Leon fraudulently spent union funds and funds donated solely for charitable organizations on Christmas parties and gifts,  while also committing gross violations of the union’s constitution.

Judicial Panel member Michael Demarco conducted a teleconference meeting in August stating that it was “uncontested” that the accused parties were in violation when they did not document expenditures and cashed checks without the required two signatures.

In addition, Demarco also ruled that it was uncontested that while Licon was president, monthly meetings were not held and when they were, proper paperwork, including financial reports, were not presented.

Demarco stated, “The main issue before this meeting is to determine who authorized or approved the actions taken, and once this issue is decided, determine the appropriate penalty for those guilty.”

During testimony, witnesses stated that when they brought up the issue of annual elections, “both Vice President Frank Amaro and President Licon would get highly upset and threaten retaliation.”

Witnesses also testified that Licon would never have meetings, and if he did, the treasurer’s report was not presented.

The level of fraud eventually became intolerable after witnesses informed other executive board members that Licon and Amaro were using the local’s bank account as their personal piggy bank; that later triggered members to file the first complaint in June 2019.

The most explosive part of the fraud was a $50,000 Moscowitz Foundation donation to the union that was earmarked for charitable organizations in Hawaiian Gardens.

The treasurer at the time set up a separate bank account to ensure the funds were dispersed properly, but Licon and Amaro raided that bank account and spent the money “on gifts and a Christmas party.”

Witnesses testified that when the misuse of funds was brought to Licon and Amaro’s attention, “both would get really upset and raise their voices saying they will not be not accused of stealing.”

When the time came for the accused to defend themselves, no witnesses were brought forward to corroborate their statements; some resorted to badgering the witnesses.

Demarco stated “a sparse defense was offered by the accused parties which included the accused testifying they were not aware of the union’s financial standards code and that Licon and Amaro had received approval for the Christmas party expenses.”

After the testimony of both sides, Demarco concluded that for over four years, the union was subject to the whims of crooked members, led by Licon and Amaro.

Elections were not held, meetings were infrequent and did not include formal presentations as required by the union and the accused members were withdrawing thousands without approval.

And if anyone complained, retaliation was common place.

By virtue of their witness testimony, Demarco released Raya-Ortiz and Gonzales from any actions.

Demarco concluded that the Licon, Amaro, Soto, Lyons, and Polanco were guilty of all charges and suspended them from the right to hold elected office at any level of the union for a period of four years.

In addition, the witnesses testified that the $50,000 donation from the Moscowitz Foundation money was earmarked for charitable organizations within the city.

That would place the funds under restricted status, under government code, that could expose the guilty parties to charges of charity fraud and bring in the California Attorney General.

 

 

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