SEIU Labor Union Leader Resigns Following Embezzlement, Tax Fraud Charges

On Wednesday, Alma Hernandez, the Executive Director for Service Employees International Union (SEIU), the largest labor union in California resigned after her and her husband, Jose Moscoso, were charged by California Attorney General Rob Bonta on numerous embezzlement and tax fraud charges.

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According to a California Department of Justice statement, the CA DOJ, along with multiple state organizations including the Employment Development Department (EDD), the California Franchise Tax Board (FTB), and the Tax Recovery in the Underground Economy (TRUE) Task Force found multiple instances of filing false tax returns and other crimes dating back to 2014.

In documents filed on Wednesday, Hernandez was found to have written two checks worth $11,700 to Moscoso for services not provided from the account of the Working Families for Solorio for Senate 2014 PAC, whom Hernandez was serving as treasurer at the time.

From 2014 to 2018, Moscoso and Hernandez also allegedly filed multiple joint income tax returns in which they underreported earnings by $1,427,874, owing the state $143,483 in unpaid income tax.

Moscoso, who ran an air duct cleaning business, was also found to have not listed multiple employees in his business through taxes, not reporting more than $300,000 in wages and, from 2017 to 2020, failing to pay $16,000 in employment taxes.

The findings led Attorney General Bonta to file criminal charges against the couple in Sacramento County Superior Court on Wednesday. Both Hernandez and Moscoso face five counts each of filing a false tax return with intent to evade, as well as a special allegation of aggravated white collar crime with loss over $100,000. Individually, Hernandez also faces two counts of grand theft and one count of perjury, with Moscoso facing and additional one count of failure to file a report with the Employment Development Department, one count of failure to pay unemployment insurance and training tax, one count of failure to pay disability insurance, one count of failure to file employment tax returns with intent to evade paying taxes, and one count of failure to collect and pay personal income tax.

While Attorney General Bonta praised labor unions in his statement on Wednesday, he also noted that it was their duty to charge them when they broke the law.

“Labor unions are an integral part of what makes California strong. Unions are working people standing together to demand fair wages, quality healthcare, a safe work environment, and the ability to retire with dignity,” said Attorney General Bonta on Wednesday. “Working people deserve leaders they can depend on to help them achieve these goals at the bargaining table and through political advocacy, but also leaders they can trust. When there is reason to believe trust has been broken and crimes have been committed, we have an ethical duty to investigate – we owe that to the people of California. Thank you to our state partners for their collaborative partnership.”

Numerous charges lead to Hernandez’s resignation on Wednesday

The numerous charges immediately preceded Hernandez’s resignation by only a few hours. While unconfirmed, it is very likely that her decision was a result of the CA DOJ’s charges. Neither Hernandez nor Moscoso responded to interview requests on Wednesday. However, SEIU did release statements over the charges and resignation.

“We are deeply concerned about the allegations against Alma Hernandez. We have accepted Ms. Hernandez’s resignation, and we have cooperated fully with authorities on this matter and will continue to do so,” noted SEIU California State Council Executive Director Bob Schoonover on Wednesday. “Any misuse of funds is unacceptable, and we are committed to doubling down on our efforts to ensure that all officers and staff adhere to the highest level of ethical and financial conduct.”

Those who have pushed back against labor unions both politically and legally in recent years in California saw the charges and resignation of Hernandez as a major win on Wednesday.

“No one is against labor union 100%, but when they get to big or corrupt or start doing the things that they themselves fought against in the past, then it’s really good to see the government follow through on justice,” Michael Aden, a New York lawyer who has helped file lawsuits against union in several states, including California, told the Globe Wednesday. “Corruption at any level is unacceptable, and as much as we’d like to think that the days of union corruption are over, it’s still very much rampant, especially in more union friendly states like California. Today is proof of that, at least at an individual level.”

“Hopefully this leads to some more investigations of union in California and around the nation. Again, unions are not this evil force and have done a lot of good for a lot of people. We just can’t ignore them when they do something shady or when a union leader misappropriates funds. You don’t hear this too often, but good on California for taking on a union leader!”

While fines and prison time are likely, it is currently not known how much Hernandez and Moscoso will exactly owe or how much prison time they may be looking at. Hernandez had served as the Executive Director for SEIU California since 2016.