RIVERSIDE, California - Four former and current officials of an independent labor union in Colton were arrested this morning on federal charges related to a scheme to embezzle funds from the union’s health plan.
The four defendants, who were named in a 40-count indictment returned by a federal grand jury on Jan. 21, are charged with conspiring to embezzle from the health plan for the United Industrial and Service Workers of America Local 101 (UISWA), which serves members in the Inland Empire.
Over the course of eight years, the defendants allegedly misappropriated a total of approximately $900,000 in union funds.
John S. Romero, 68, the former president of USIWA;
Evelyn Romero, 66, John S. Romero’s wife, who succeeded her husband as president of USIWA and served in that position until June 2014;
John J. Romero, 50, who is the son of John S. and Evelyn Romero and who is the former secretary/treasurer of USIWA; and
Danae Romero, 37, who is the daughter of John S. and Evelyn Romero and who served as an officer in the union.
All four defendants are expected to be arraigned on the indictment this afternoon in United States District Court.
The indictment charges the defendants with conspiring to embezzle assets from the UISWA Health Plan, which was a program intended to provide healthcare benefits to union members.
The indictment also includes charges of knowingly filing false annual reports with the U.S. Department of Labor that failed to disclose more than $100,000 in UISWA revenues and disbursements, willfully misusing the assets from both the UISWA and UISWA Health Plan, and knowingly and willfully permitting another Romero-family member who had previously been convicted of a felony narcotics violation to serve as an officer and employee of the UISWA.
The indictment alleges that some of the Health Plan's bank accounts were held in the name of a construction company associated with the Health Plan's third party administrator, through which the Romero family received payments without the knowledge of consent of the Health Plan's second trustee. It is further alleged that the Romero family controlled the Health Plan's reserve fund accounts and used those assets for their personal benefit.
The defendants family allegedly used union funds to pay personal and union-related legal fees and judgments levied against them, systematically making payments of Health Plan assets to a separate business entity they operated under false pretenses, fund a payroll account that had been established using the name and employer identification number of a previous labor union they had been in control of that had since terminated operations, pay off a car loan for a vehicle belonging to another Romero family member, and recirculating assets from the Health Plan's reserve fund to its operating account to cover the insurance expenses for their own healthcare benefits that were billed to the union.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
If they are convicted of the charges in the indictment, all four defendants would face decades in federal prison.
The indictment is the result of a joint investigation conducted by the U.S. Department of Labor - Office of Inspector General, the U.S. Department of Labor - Employee Benefits Security Administration, and the U.S. Department of Labor - Office of Labor Management Standards.
Source: U.S. Department of Justice, Office of the United States Attorneys
