Former Compliance Officer for National Labor Relations Board Pleads Guilty to Stealing More Than $400,000 from Agency
Defendant Took Money Meant for Legitimate Claimants
WASHINGTON – Hector Martinez, a former compliance officer with the National Labor Relations Board (NLRB), pled guilty today to federal charges stemming from a scheme in which he stole more than $400,000 from the agency.
The guilty plea was announced by U.S. Attorney Channing D. Phillips, Andrew Vale, Assistant Director in Charge of the FBI’s Washington Field Office, and David P. Berry, Inspector General for the National Labor Relations Board.
Martinez, 53, of Pico Rivera, Calif., pled guilty in the U.S. District Court for the District of Columbia to charges of wire fraud and aggravated identity theft. Under federal sentencing guidelines, he faces a likely range of 33 to 41 months in prison for wire fraud and an additional mandatory two-year prison term for aggravated identity theft. He also has agreed to pay $434,823 in restitution to the NLRB and is subject to a forfeiture money judgment. The Honorable Randolph D. Moss scheduled sentencing for Nov. 6, 2017.
The NLRB is an independent federal agency. Among its responsibilities, the NLRB acts to prevent and remedy unfair labor practices committed by private sector employers and unions. Employees, union representatives, and employers who believe that their rights under the National Labor Relations Act have been violated may file charges alleging unfair labor practices at their nearest NLRB regional office. When the NLRB successfully litigates or settles a case on behalf of aggrieved workers (litigants known as “discriminatees”), monetary damages are paid by the employer or union, or through the NLRB. The NLRB refers to such payments as “back pay.”
According to the government’s evidence, Martinez carried out his scheme from December 2010 and continued it through October 2015, when he was placed on administrative leave by the agency and ultimately discharged. During that time, he was a compliance officer at the NLRB’s Region 21 office in downtown Los Angeles. In that role, his responsibilities included disbursing back pay to discriminatees in the Los Angeles area.
As part of the scheme, Martinez created fictitious discriminatees in real cases in which back pay was owed. He invented names for the discriminatees and paired the fabricated names with real Social Security numbers for other people. Then he created fictitious amounts of back pay and diverted this money to his own personal bank accounts. In order to generate the money, Martinez diverted the full amount of money due to legitimate discriminatees, who received nothing, or skimmed money from legitimate discriminatees, reducing the amount paid to them.
All told, in his guilty plea, Martinez admitted that he diverted back pay funds that nine employers paid to the NLRB and that he should have paid to victims. The NLRB has since engaged in remedial efforts.
In announcing the plea, U.S. Attorney Phillips, Assistant Director in Charge Vale, and Inspector General Berry commended the work of those who investigated the case from the FBI’s Washington Field Office and the NLRB’s Office of the Inspector General. They also expressed appreciation for the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Diane Lucas, who handled forfeiture issues, and Paralegal Specialists Jessica Mundi and Christopher Toms. Finally, they commended the work of Assistant U.S. Attorney Denise A. Simmonds, who investigated and prosecuted the matter.