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NLRB compliance officer fabricated victims, stole from compensation fund

Joe Mont | August 22, 2017

A former compliance officer for the National Labor Relations Board pleaded guilty this week to stealing more than $400,000 from an agency fund.

Hector “Sonny” Martinez, who worked in the NLRB’s Los Angeles office, was charged with the crime in June. He pleaded guilty on Aug. 21 in U.S. District Court for the District of Columbia. The formal charges from the U.S. Attorney’s office include wire fraud and “aggravated identity theft.”

The fund at the center of the crime was established to compensate employees entitled to back pay because their employers violated federal labor rules and were ordered to make back pay awards.

Monetary damages related to lost wages, expenses, and interest, either are paid directly to employees by their employer or union, or are paid to NLRB headquarters in Washington D.C. and disbursed through its network of regional offices. The agency refers to all monetary damages as "back pay."

From April 1993 through July 2016, Martinez worked at the NLRB’s regional office in Los Angeles as a compliance officer, described in the charging papers as “a position of public trust.”

As a compliance officer, Martinez was responsible for, among other things, disbursing back pay to victims in the Los Angeles area.

These individuals were not always aware that they were due payments or in what amount. Martinez was responsible for working with an employer or union representative to identify the victims entitled to back pay, calculating the back pay amount, notifying ictimss about an award, and disbursing the correct funds. In performance of those duties, he had access to a confidential law enforcement database for purposes of trying to locate those entitled to back pay.

From December 2010 through October 2015, Martinez is accused of developing a scheme to illicitly access and draw from the NLRB fund by creating a variety of fake victims and claimants. He fabricated the names of individuals who were allegedly entitled to back pay funds, used real Social Security Numbers belonging to other people and represented that they belonged to the fabricated victims, and listed his personal bank account information as belonging to them. He would then “authorize” payments to those accounts.

Martinez opened at least eight bank accounts at three financial institutions that were intended to both further the scheme and conceal it, according to prosecutors.

Martinez’s will pay $435,000 in restitution to the NLRB. His sentencing hearing is scheduled for Nov. 6.