Thursday, August 9, 2012

Court Document: Kickbacks Abounded under SEIU's Tyrone Freeman

SEIU's Tyrone Freeman
As Tasty noted earlier, he intends to publish information that links SEIU’s top officials to Tyrone Freeman’s corruption scandal. The details may help explain why the Feds recently "declined to comment on whether any other SEIU officials could be charged, citing a continuing investigation," according to the Wall Street Journal.

But... first things first. Today, Tasty is posting a court document that describes some of the schemes employed by Freeman and his business buddies to rob more than $12.5 million from SEIU members and their health insurance plan. The info comes to you courtesy of a conscientious reader who forwarded the info!

What's Tasty posting today? It’s a court document filed by Freeman’s attorneys in response to a civil lawsuit against Freeman, TelaDoc and Dickerson Employee Benefits Inc. Tasty described the lawsuit in this earlier post.

Why is the document important? Well, it gives readers a stream-lined view of the lawsuit's main allegations as well as a point-by-point response from Freeman’s attorneys. The filing offers stomach-churning details about the SEIU corruption scandal, including these...

The TelaDoc Scam: Freeman and the executives at TelaDoc -- a for-profit company based in Texas -- conspired to systematically overcharge more than 100,000 low-wage homecare workers for the over-the-phone medical consultations provided by TelaDoc. This scheme produced mega-profits for TelaDoc. Freeman then negotiated a deal for TelaDoc to “refund” a portion of the excess profits. However, instead of refunding the money to union members (who had paid the TelaDoc fees in the first place), Freeman rigged the deal so that all of the “refunds” were sent to SEIU Local 6434!  Freeman then used the money for “special projects.”

Here's a tidbit from the court document that details TelaDoc's system of kickbacks. On a single day in March of 2008, TelaDoc paid Freeman’s union an "underutilization refund" of $185,000 and also donated $75,000 to Freeman's golf tournament at the Four Seasons! A quarter-million-dollar day for Tyrone!

The Dental Benefits Scam:  In another scheme, Freeman signed up 116,439 of SEIU's members for dental benefits. Sounds good, right? Except that Freeman allegedly charged each worker a 25% “commission” on top of their monthly premium payments. So who pocketed the commissions? None other than Freeman’s business pals at Dickerson Employee Benefits, a for-profit company in Los Angeles. In just one year, Dickerson pocketed $1.3 million in “commissions” from SEIU members, according to court records.

If SEIU's dental plan had been honestly designed, how much should Dickerson have gotten in commissions? According to an industry expert, $50,000.  That means $1.25 million was sucked from low-wage workers' paychecks in just one year.

The Dickerson Kickbacks:  The fat-cat executives at Dickerson were so happy about their tidal wave of commissions that they funneled giant kickbacks to Freeman. First, they gave Freeman stock options in a company that Dickerson’s executives happened to own. Next, they gave Freeman shares of stock in another company owned by Dickerson’s sons-in-law. Oh, and Dickerson’s CEO personally funneled money into Freeman’s reelection campaign for the presidency of SEIU Local 6434. At the time, Freeman also served as a Vice President of SEIU's International Executive Board.

Plus, like their buddies over at TelaDoc, the pin-striped boys at Dickerson contributed generous amounts to Freeman’s annual golf tournament, the proceeds of which were “whittled away on Freeman and his guests,” according to the lawsuit.

And that, my friends, is just the beginning. More info is contained in the 55-page court document available below. It's no wonder that the members of SEIU Local 6434 had substandard union contracts, terrible wages, and bad representation from their union: Tyrone was simply too busy devising schemes to steal millions of dollars from them.
Lawsuit Filing by Tyrone Freeman in Civil Suit vs Freeman, TelaDoc and Dickerson Employee Benefits 2-28-11