COMPLAINT

 

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

 

Jonathan M. Gould, on behalf of St.    

Louis-Kansas City Carpenters’                

Regional Council (Mid-America          

Carpenters Regional Council)                  

                                                                    

                              Plaintiff,                               

Case No.:

                                                                        

JURY TRIAL DEMANDED

                                                                

                                                    v.                                                        

                                                                

                       Douglas J. McCarron,                            

                                                                    

                              Defendant,                   

                                                                    

 

VERIFIED COMPLAINT

COMES NOW, Plaintiff Jonathan M. Gould (“Mr. Gould”), on behalf of the St. Louis-Kansas City Carpenters’ Regional Council (Mid-America Carpenters Regional Council) (“CRC”), and for his Verified Complaint against Defendant Douglas J. McCarron (“Mr. McCarron”), General President (“GP”) of the United Brotherhood of Carpenters and Joiners of America (“UBC”), states:

PRELIMINARY STATEMENT

          Mr. Gould brings this action derivatively on behalf of the CRC and UBC for breaches of fiduciary duties under 29 U.S.C. § 501.

          As General President (“GP”) of the UBC, Mr. McCarron owed the CRC and UBC fiduciary duties under 29 U.S.C. § 501 (a). Mr. McCarron violated his fiduciary duties through (1) allowing misappropriation of CRC and UBC funds, (2) ignoring repeated attempts from Mr. Gould to notify Mr. McCarron and the UBC that former Executive Secretary-Treasurers’ Terry Nelson and Al Bond were leading efforts to misappropriate CRC and UBC funds, (3) failing to take action for similar, systematic acts of misconduct perpetrated by multiple CRC officers and agents. Mr. McCarron’s breaches foster a culture wrought with fraudulent misappropriation and as demonstrated herein, have cost the CRC and UBC millions of dollars in lost funds.

 

          Mr. Gould is a present dues paying member of the CRC and UBC and was formerly a CRC Business Representative. Mr. Gould became aware of multiple violations and reported his concerns to CRC leaders from 2008 through 2014. Mr. Gould’s outspoken disapproval of certain conduct ultimately led to his termination in August of 2014. Mr. Gould then provided ample evidence of financial crimes to Mr. McCarron and the UBC in September of 2014. No action was taken. Mr. McCarron ignored this attempt by Mr. Gould to end corruption within the CRC and UBC. As a result, Mr. Gould filed a civil lawsuit in Missouri state court alleging wrongful termination (“whistleblower”). Discovery in that case confirmed Mr. Gould’s allegations of fraudulent misappropriation under former Executive Secretary-Treasurers Terry Nelson and Al Bond. In 2018, Mr. Gould once again notified Mr. McCarron and the UBC of violations of law and/or public policy, including Representatives operating CRC funded vehicles without valid driver’s licenses. Finally, on October 3, 2021, Mr. Gould demanded Mr. McCarron secure a forensic accounting and recover damages on behalf of the CRC and UBC. After a month without response, Mr. Gould is certain that Mr. McCarron is once again ignoring his duties as defined under the UBC constitution and 29 U.S.C. § 501 (b). Further demand by Mr. Gould is futile, the UBC, and presumably Mr. McCarron, are themselves under federal investigation in New Jersey. UBC financials have been subpoenaed, as have the records of the CRC and UBC accounting firm, Calibre CPA. Thus, for the detailed reasons discussed below and in Mr. Gould’s Motion for Leave to File Verified Complaint, good cause exists to file this Complaint, and for Mr. Gould to recover damages for the benefit of the CRC and UBC.

 

          This case continues a sad chapter in the story of corruption that has plagued the former St. Louis-Kansas City Carpenters’ Regional Council (CRC) and the United Brotherhood of Carpenters and Joiners of America (UBC). Based on that corruption, specifically on “financial malfeasance” committed by the former Executive Secretary-Treasurer, Al Bond, the UBC dissolved the CRC and thus terminated the CRC’s leadership. This followed an investigation by the UBC and/or its agents.

 

 

PARTIES

 

1.       Mr. Gould is a citizen of the state of Illinois, with his primary address at 7357 Providence Dr, Edwardsville, Illinois 62025.

2.       At all times relevant, Mr. Gould was a member in good standing of the CRC and UBC.

3.       Douglas J. McCarron is the GP of the UBC, with the international office located in Washington D.C.

4.       At all times relevant, Mr. McCarron was the GP of the UBC.

5.       At all times relevant, Mr. McCarron owed fiduciary duties to the CRC and UBC under 29 U.S.C. § 501 (a) (“fiduciary duties”).

 

JURISDICTION AND VENUE

 

6.       This court has jurisdiction over this matter because the claims arise under laws of the United States, 28 U.S.C. § 1331.

7.       Venue is also proper because a substantial part of the events, particularly the embezzlement of union funds, occurred in this judicial district, under 28 U.S.C. § 1392 (b) (2).

 

MR. GOULD’S 29 U.S.C. §501 DEMANDS FROM 2014 THROUGH 2021

 

8.          From September of 2014 through October of 2021, Mr. Gould has been whistleblowing to Mr. McCarron and the UBC about fraudulent misappropriation and illegal spending of CRC/UBC monies, including, but not limited to, expenditures by CRC Representatives, CRC Employees, and CRC Executive Board Members. Prior to 2014, Mr. Gould had been reporting violations of federal law to his superiors inside the CRC from 2008 through 2014. Mr. Gould alleged then, and continues to allege now, numerous fiduciary breaches, including improper CRC reimbursements to its Executive Board and Business Representatives for:

 

a.    Flying family and friends to Conventions or Conferences;

b.   Expenses for family and friends at Conventions or Conferences;

c.    Unlimited alcohol expenses at Conventions or Conferences;

d.   CRC vehicle policy that illegally inflated UBC pension funds;

e.    CRC providing non-business-based meals to employees;

f.     Concert tickets;

g.    Musical tickets;

h.   Play tickets;

i.      Comedy Act tickets;

j.      Sporting Event tickets;

k.    Tour Tickets;

l.      Souvenirs, gifts, personal effects, cigars;

m.  Illegal loans in excess of $2000 to CRC employees;

n.   Unlimited alcohol expenses with no business purpose;

o.   Reimbursement of medical insurance deductibles for employees;

p.   Lavish birthday and retirement parties for employees;

q.   Insurance deductibles following employee auto accidents;

r.      Massages, clothing, tobacco products, and golf;

s.     Petty Cash transactions that lacked proper documentation;

t.     Mr. Bond coercing/tricking CRC Delegates into an $85,000 per year wage increase;

u.   Income tax evasion

v.    Unreported personal relationships between CRC employees and CRC leadership;

w.  Unreported personal relationships with CRC contractors receiving financial assistance from the CRC;

x.     Reimbursements lacking proper receipts or receipts all together: 1) place of transaction; 2) union purpose of the transaction; 3) when the transaction occurred; 4) individuals present at the transaction; 5) itemized receipts; or the “5 Ws”

y.     Other incidentals being paid for by the CRC for business representatives, employees, board members, and guests.

z.     Excessive fees paid to investment firms, resulting in multi-million dollar losses for CRC fund accounts.

 

9.         Mr. Gould provided Mr. McCarron and the UBC proof of his September 22, 2008, whistleblower communication with the Illinois Attorney General. Mr. Gould sought whistleblower protection because the dues monies of CRC members were being misappropriated from the CRC general fund, CRC pension fund, CRC health and welfare fund, CRC training funds, CRC vacation fun, CRC market recovery fund, contractor association funds, and the UBC training fund through underreporting of hours, which resulted in benefits being shorted to the CRC, and ultimately the funds mentioned above. See Exhibit 1.

 

10.         Mr. Gould continued whistleblowing to his CRC superiors about violations of multiple federal laws from 2008 until his termination in August of 2014. Mr. Gould provided copies of multiple emails in which he reported violations of law and/or public policy to the UBC and Mr. McCarron in 2014.

See Exhibits 2-7. The CRC or UBC made no fundamental changes relating to the fraudulent and illegal misappropriation of funds created by breaches of fiduciary duties committed by CRC Representatives and Executive Board members.

 

11.         On August 12, 2014, during a CRC Delegate Board meeting, Mr. Gould emailed a four-page document to CRC Executive Board members; the letter contained Mr. Gould’s accounting of breaches of fiduciary duties, and fraudulent misappropriation and illegal spending of CRC and UBC funds, and tax evasion, including:

 

A.   Breach of fiduciary duty pursuant to 29 U.S.C. § 501 (a);

B.   Violation of statutory duty pursuant to 29 U.S.C. § 501 (c);

C.   Withholding accounting information from CRC Delegates in violation of 29 U.S.C. § 501;

D.   Withholding accounting information from CRC members in violation of 29 U.S.C. § 501;

E.    Misappropriation of CRC funds to benefit certain CRC Executive Board members, CRC Representatives, and employees in violation of 29 U.S.C. § 501;

F.    Theft or conversion of CRC funds to benefit certain CRC Executive Board members, CRC Representatives, and employees in violation of 29 U.S.C. § 501;

G.  Violations of 29 U.S.C. § 501, the UBC Constitution, NLRA, and the LMRDA regarding reporting and accounting to CRC members for expenditures of CRC funds;

H.   Excessive compensation, benefits, travel, expenses, and other perks for certain CRC Executive Board members, CRC Representatives, and employees in violation of 29 U.S.C. § 501;

I.      Misappropriation of CRC funds spent on alcohol, food, and travel by certain CRC Executive Board members, CRC Representatives, and employees in violation of 29 U.S.C. § 501;

J.     Travel receipts being intentionally prepared, submitted, and paid by the CRC that hid multiple expenditures for guests of certain CRC Executive Board members, CRC Representatives, and employees in violation of 29 U.S.C. § 501;

K.   Theft or conversion of CRC funds for use by certain CRC Executive Board members, CRC Representatives, and employees to pay for spouses/family members/guests to travel to conventions or conferences in violation of 29 U.S.C. § 501;

L.    Theft or conversion of CRC funds for use by certain CRC Executive Board members, CRC Representatives, and employees to pay for extra days and nights, either before or after traveling to conventions or conferences in violation of 29 U.S.C. § 501;

M. Theft or conversion of CRC funds for use by certain CRC Executive Board members, CRC Representatives, and employees to pay for free golf, hunting, food, event tickets, and alcohol in violation of 29 U.S.C. § 501;

N.  Violation of 29 U.S.C. § 501 through participation in a vehicle policy consisting of excess compensation designed to increase the UBC pensions of CRC Representatives and Executive Board members as the expense of CRC coffers.

O.  Violation of 29 U.S.C. § 501 through spending that is exorbitant and inconsistent with the interests of the CRC/UBC members as a whole and failed to comply with federal laws and regulations, including the accountability owed to CRC members;

P.   Violation of state and federal law, including 29 U.S.C. § 501, through fraudulent accounting that entices CRC members and Delegates to approve dues check-off increases through deceit or coercion;

Q.  Federal and state income tax invasion by listing perks for CRC Executive Board members, Business Representatives, and employees a-s legitimate business expenditures.

See Exhibits 8-9.

 

12.         At the August 12, 2014 CRC Delegate meeting, Mr. Gould have a speech to CRC Delegates, members, and leaders, stating:

 

a.    Mr. Gould had been working to stop the CRC vehicle policy for several years;

b.   The CRC vehicle policy violated 29 U.S.C. §  501 and was being used to provide excessive compensation and inflate the UBC pensions for CRC Business Representatives and Executive Board members; and

c.    Certain CRC Business Representatives, employees, and Executive Board members had breached their fiduciary duties owed to CRC members by misappropriating union funds for personal benefit.

See Exhibit 9.

 

13.         From September 2014 through December of 2014, Mr. Gould continued to provide the UBC, Mr. McCarron, and UBC representatives with details of CRC bosses breaching fiduciary duties, fraudulent misappropriation, and illegal spending of CRC dues monies, including:

 

a.    Providing the UBC with a copy of Mr. Gould’s 2008 communication with the Illinois Attorney General’s office;

b.   Providing the UBC with a copy of Mr. Gould’s 2008 email to former EST Terry Neslon;

c.    Providing the UBC with a copy of Mr. Gould’s 2009 email to his Southern Illinois Coordinator, Ron Dicus;

d.   Providing the UBC with a copy of Mr. Gould’s 2011 email to Mr. Dicus;

e.    Providing the UBC with a copy of Mr. Gould’s 2012 email to Mr. Dicus;

f.     Providing the UBC with notes from Mr. Gould’s 2014 meeting with Mr. Nelson;

g.    Providing the UBC with a copy of Mr. Gould’s 2014 letter to Mr. Nelson, Mr. Bond, CRC Executive Board members, and Business Representatives;

h.   Providing the UBC with an audio copy and transcript of Mr. Gould’s August 12, 2014 speech delivered to CRC Delegates following his termination by former EST Terry Nelson.

See Exhibits 2-9.

 

14.         Despite Mr. Gould’s repeated efforts to expose and change the illegal policies and practices of the CRC, actions designed to eliminate breaches of fiduciary duties, and numerous endeavors to curtail fraudulent misappropriation and illegal spending of CRC funds by CRC leadership, no actions were taken by the UBC or Mr. McCarron. Nor did any CRC leaders take it upon themselves to remedy the rampant fraud within the CRC.

15.         In October of 2017, Mr. Gould made another plea to Mr. Bond to end financial games within the CRC. See Exhibit 9D.

16.         In 2018, Mr. Gould reported additional financial malfeasance to Mr. McCarron and the UBC via an Ethical Grievance. Mr. Gould reported that numerous CRC Business Representatives, including EST Al Bond, were receiving vehicle allowance payments, vehicle insurance, and mileage reimbursement payments despite lacking driver’s licenses or driving privileges due to multiple DUI/DWI arrests. See Exhibit 9A.

17.         In May of 2018, former EST Al Bond filed an Affidavit stating that the removal of former Kansas City Carpenters’ District Council EST Terry Davis was because of “rumors” that Mr. Davis was requiring appointed Business Representatives to provide cash kickbacks from their salaries to Mr. Davis. The removal of Mr. Davis for financial misappropriates resulted in the dissolvement of the Kansas City Carpenters’ District Council as they were merged into the CRC by GP Douglas J. McCarron. This sworn statement by Mr. Bond greatly differs from public statements made by the UBC and CRC. See Exhibit 9B-9C.

 

18.         In January of 2020, the DOL and OLMS released results of a Compliance Audit commenced in the Spring of 2018. The audit reviewed the 2017-2018 CRC financials and pinpointed numerous issues that Mr. Gould had reported to the UBC, including:

 

a.    Illegal loans in excess of $2000 to employees;

b.   Lack of proper salary authorization for Mr. Bond and CRC Business Representatives;

c.    Improper reimbursements via petty cash for receipts lacking the required documentation;

d.   Perks being reported as legitimate business expenses, rather than taxable income for CRC executives and employees;

e.    Improper reporting of CRC financials on LM2 reports;

See Exhibit 10.

 

19.         The UBC and UBC attorneys were aware of the failed OLMS audit, including Mr. Bond’s scheme to defraud the CRC members out of $85,000 per year in salary by coercing them into believing that the UBC had demanded he receive a salary increase. See Exhibit 11. ¶¶ 1, 2, & 8

20.         The UBC was also informed by OLMS auditors that Mr. Bond and the CRC had been making six and seven figure loans to contractors without signed loan applications or documents. 

21.         OLMS auditors questioned CRC in-house attorney, Martin Waler, about the CRC’s use of Market Recovery Funds to make payments to the CRC’s health and welfare funds. Mr. Walter lied to the OLMS auditors and claimed that this type of payment was only used to reimburse funds for expenses incurred by employees sharing duties amongst multiple funds. However, discovery in a prior civil lawsuit uncovered proof that the CRC had used Market Recovery Funds to pay benefits owed by a “preferred” CRC signatory flooring contractor following a failed audit. The audit uncovered nearly eighty-six thousand in unpaid benefits. In the end, Mr. Nelson and the CRC forgave over fifty thousand dollars of the debt and accepted a payment of twelve thousand dollars from the contractor. Mr. Nelson then directed CRC employees to cut a check from the CRC Market Recovery Fund to pay for twenty thousand dollars in benefits owed on behalf of rank-and-file members by the CRC’s largest flooring contractor. When those two payments were still short to cover the agreed upon amount owed following the audit, Mr. Nelson directed CRC staffers to wire transfer the remaining balance from the CRC member’s Vacation Fund. See Exhibit 12.

 

22.         The OLMS audit marked the third audit of CRC financials for the 2017-2018 calendar year. Amazingly, all three audits ended with different results. Longtime CRC “independent” auditing firm, RSM, found no apparent violations of CRC policy or federal laws. Calibre CPA found violations of CRC policy and/or federal laws. However, due to a flaw in Mr. Gould’s demand letter, the CRC was allowed to only audit and report to Mr. Gould information about the expense reports and credit card statements of five named defendants. Calibre CPA was eventually subpoenaed by federal agencies in New Jersey. See Exhibit 13. Mr. Gould had made a demand for an independent accounting of CRC funds to Mr. Bond in January of 2018. Ironically, with all the current intrigue surrounding Mr. Bond’s termination for financial malfeasance, it isn’t hard to understand why the hand-picked receipts and consolidated financial statements provided by the CRC to auditors failed to uncover Mr. Bond’s crimes. The documents provided to auditors were either forged or auditors helped to hide CRC fraud. Mr. Gould’s 2018 letter is attached for reference as Exhibit 34. Finally, OLMS auditors found seven pages of CRC policy, federal laws, and the LMRDA. To date, the CRC and UBC have failed to produce copies of these audits, or the items used to prepare and produce each audit.

MR. GOULD’S FORMAL DEMAND TO MR. MCCARRON FOR DAMAGES AND/OR AN ACCOUNTING PURSUANT TO 29 U.S.C. § 501

23.         On October 3, 2021, Mr. Gould presented an appeal of Mr. McCarron and the UBC’s announced merger of the CRC into the Chicago Carpenters Regional Council (Mid-America Carpenters Regional Council) to Mr. McCarron, Mid-America Carpenters Regional Council Executive Secretary-Treasurer, Gary Perinar, and the UBC. In this letter, Mr. Gould also made a demand on Mr. McCarron to take action to sue Mr. Bond to recover damages, secure forensic accounting of CRC financials under Mr. Bond’s leadership, show rank-and-file members audit reports and communications and documents used to product audits, cease the merger of the CRC into Chicago, declare an official Trusteeship of the CRC under the conditions of the UBC constitution and the LMRDA, retain all CRC records, prefer internal union charges against Mr. Bond, report any illegal activity to proper agencies, hold other CRC Executive Board members and employees responsible for any violations of the UBC constitution or laws they may have broken, allow Mr. Gould to assist and witness any forensic audits, commission a third-party investigation into the years long effort by Mr. Nelson, Mr. Bond, and professional service providers to coverup fraud. See Exhibit 14.

 

24.         The eight-page document contained Mr. Gould’s multiple experiences with CRC breaches of fiduciary duty and violations of public policy, as well as state and federal laws, including:

 

 

a.    Paying to fly spouses and guests to conventions and conferences, despite this particular spending being against CRC policy for at least twenty-seven years under Controller Juli Laramie;

b.   Paying expenses for spouses and guests at conventions and conferences;

c.    Paying for unlimited alcohol purchases at conventions and conferences, as directed by former EST Terry Nelson, and continued under former EST Al Bond;

d.   Paying for non-business-related meals, alcohol, concerts, musicals, sporting events, clothing, spa treatments, golf, and incidentals;

e.    Paying for and granting reimbursements to CRC employees via “petty cash” that did not meet minimum LMRDA reporting requirements;

f.     Increasing salaries via an illegal vehicle policy that serves(d) to fraudulently inflate the UBC pensions of CRC leaders;

g.    Increasing Mr. Bond’s salary by roughly $85,000 in May of 2017 by tricking or coercing CRC Delegates into approving the increase based on the premise that the UBC made a demand on the CRC to increase Mr. Bond’s salary to eighty-five percent of the wage paid to Mid-Western District Vice President David Tharp. The UBC confirmed to the DOL and Office of Labor Management Standards auditors that the UBC made no such demand and had no knowledge of, or correspondence related to the “purported” “UBC directive” pertaining to Mr. Bond’s salary. This theft netted Mr. Bond at least $320,000 between May of 2017 and his termination in September of 2021. See Exhibit 11.

h.   Income tax evasion by not reporting non-business-related perks/benefits as income on employee W-2s’ (confirmed by Controller Juli Laramie in a 2018 deposition) See Exhibit 15.

i.      Receipts lacking proper documentation, as required by CRC policy and the LMRDA. Receipts almost always lacked the union purpose of the expense, names of persons in attendance, date of the expense, location of the expense, and itemized items;

 

25.         Since April of 2018, Mr. Gould has been providing evidence of financial crimes committed by Mr. Bond and others to the Federal Bureau of Investigation. During an August of 2020 meeting, Special Agent Jeff Johnson confirmed to Mr. Gould and his attorney, Mr. Mike McGinely, that CRC schemes hiding personal expenses as legitimate union expenses was a mirror image of the United Auto Workers fraud currently being prosecuted by the Department of Justice. See Exhibit 16.

 

26.         Mr. McCarron and Gary Perinar both made public statements in the days following Mr. Bond’s termination that the merger or dissolvement of the former St. Louis-Kansas City Carpenters’ Regional Council was in the best interest of UBC members, would provide better oversight, reduce costs, maximize resources, and increase market share. Employees and Business Representatives of the CRC stated to members that the actions taken by the UBC and Mr. McCarron were not the result of any malfeasance committed by Mr. Bond. See Exhibits 17-18.

 

27.         On October 28, 2021, Mr. Perinar held a Q and A with Associated General Contractor chapters from across Kansas, Missouri, and Illinois. In the interview, EST Perinar admitted that the “Merger” of the CRC into the Chicago Carpenters Regional Council occurred because of “issues” that needed taken care of. Mr. Perinar also stated that the UBC had completed an audit and that the newly formed Mid-America Carpenters Regional Council was currently conducting an audit themselves. See Exhibit 19.

 

28.         On November 3, 2021, Mr. McCarron and the UBC filed an official statement in federal court that illustrates his removal of Al Bond and others from positions of leadership within the CRC. Mr. McCarron states that an anonymous complaint about the St. Louis-Kansas City Carpenters from a former employee, combined with reports made to UBC representative Mike Kwiatkowski by a UBC member and current CRC employee led Mr. McCarron to assign UBC Representatives to investigate the allegations, including allegations of financial malfeasance. See Exhibit 20.

 

29.         McCarron states that on September 22, 2021, he issued a directive that allowed Terrence R. Mooney, CPA, to take possession of CRC records for review. The three UBC representatives and Mr. Mooney provided preliminary findings to UBC officials. The investigation is apparently ongoing. However, it is very safe to assume that financial malfeasance has occurred as Mr. Bond, and four other officers were promptly removed from office starting on September 24, 2021.

 

30.         Mr. Gould has little faith in the investigation and purported review of CRC records by Mr. Mooney. Mr. Mooney’s office serves as the registered address for UBC owned Jobsite Steel. Jobsite Steel has been subpoenaed as part of a federal investigation into the UBC under Mr. McCarron’s leadership. See Exhibits 13, 20-21.

 

31.         Furthermore, Mr. McCarron and the UBC have been aware of numerous examples of fraud carried out by CRC leadership since 2014. The decision to act now is seven years too late and resulted in millions of dollars being misappropriated by Mr. Nelson, Mr. Bond, and numerous other union officials.

 

32.         Mr. Gould, upon information and belief is also aware of numerous reporting violations on CRC LM2 reports, including:

 

a.    $2.5 million dollars being wire transferred to Interrail Signs over ten months in 2020 and 2021. None of these wire transfer payments were reported on CRC LM2 reports. Accounting department employs reported that Mr. Bond initially claimed the expenses were to pay for signs Interrail was producing for the CRC. Upon further questioning and requests for proof of the signs being produced, Mr. Bond changed his story to include Interrail and the CRC being partners in litigation over perspective locations to place CRC signage. The situation led to litigation with Interrail receiving all invoices from the law firm and passing on the expenses to the CRC for payment; See Exhibit 23.

b.   From 2012-2018, the CRC spent several thousand dollars per year on airfare expenses. Following Controller Juli Laramie’s deposition, in which she admitted to tax evasion involving personal airplane expenses hidden as legitimate union expenses, the CRC ceased to spend any money on airfare. Despite numerous individuals, members, employees, Executive Board members, Business Representatives, and others flying repeatedly to the UBC training center in Las Vegas, and other locations across North America;

c.    Millions of dollars in Market Recovery Fund loans being made to firms with ownership related to CRC leadership. These loans were not reported properly on IRS 990 declarations;

d.   Rampant nepotism inside CRC offices and entities. Also unreported on IRS 990 reports;

e.    Millions of dollars spent on compliance assistance via accounting firms and lawyers that resulted in zero compliance, only excessive payments to individuals willing to look the other way at financial fraud within the CRC;

f.     Former EST Terry Nelson receiving $198,000 in compensation for three months work in the 2015-2016 reporting year.

g.    CRC Business Representatives and Executive Board members receiving mileage reimbursement payments during periods in which the individuals had no driving privileges due to DUIs.

h.   Comingling of funds to pay for salaries and expenses;

i.      PPP Fraud in 2021. The CRC falsified the number of employees, increasing from roughly one hundred ten individuals in 2020, to over three hundred employees in 2021. This allowed the CRC leaders to maximize PPP funds. In all, the CRC, and its trust funds, received $3,813,751 from four PPP loans. Many workers were being claimed as employees of the CRC’s general revenue fund for the first time ever. However, the employees continued to work for the Pension Funds, Health and Welfare Funds, Training Funds, Etc; See Exhibits 24-27.

j.      Continued violations of loans made to employees over the $2000 threshold as set in the LMRDA. The loans persisted despite promises from CRC leadership to the DOL and OLMS in January of 2020 that these illegal loans would cease;

k.    Missing reimbursements from the Carpenters Industrial Committee (“CIC”); Mr. Bond and Mr. Perinar were board members of this fund. In January of 2021, the CIC reimbursed the CRC $24,100 for expenses related to the 2020 UBC General Convention. The funds were not reported on the CRC’s corresponding LM2 as income or under other receipts; See Exhibits 28-31.

l.      Improper reporting of attorney fees on the multiple LM2 reports. Per DOL 214.540, the LMRDA requires attorney fees incurred on behalf of the defense of union officers and officials to be reported as an expense or allowance to the officer and may not be shown as an organizational expense to the union. For example, the CRC paid Blitz, Bardgett, and Duetsch, LLC (“BBD”). $451,029 from 2018-2021 for the sole purpose of defending six union officers. However, the payments were reported under Representational Activities or General Overhead. Additional payments were made to Kretmar, Beatty, and Sandza (“KBS”) over the same time. Much like the payments made BBD, none of the payments made to KBS were properly listed as an expense or allowance for the officers; See Exhibit 32.

m. Investment fees paid to firms that were millions of dollars more than what was considered proper by Mr. McCarron.

n.   Allegations of former EST Bond receiving kickbacks from contributions made by the CRC’s CHIPP PAC to political consultants and campaign consulting firms.

 

33.         As of November 5, 2021, Mr. McCarron, Mr. Perinar, and the UBC have failed to even respond to Mr. Gould’s merger appeal and demands made under 29 U.S.C. § 501 on October 3, 2021. This sheer avoidance of Mr. Gould’s appeal and demands duplicates the seven years that McCarron and the UBC have ignored Mr. Gould’s more than credible complaints about fraud being carried out against the members of the CRC and UBC by Mr. Nelson, Mr. Bond, and others.

MR. MCCARRON’S FIDUCIARY DUTY TO ENSURE ALL CRC/UBC EXPENDITURES ARE/WERE MADE IN ACCORDANCE WITH 29 U.S.C. § 501 (a), AND INTERNAL CRC EXPENSE REIMBURSEMENT POLICIES

34.         As the GP of the UBC, Mr. McCarron owed the CRC and UBC various statutory duties and responsibilities, including but not limited to:

a.    The duty to hold CRC/UBC money and property solely for the benefit of the CRC/UBC and their members;

b.   The duty to manager, invest, and expend CRC/UBC funds in accordance with the Constitution and by-laws; and

c.    The duty to refrain from holding or acquiring any pecuniary and personal interest which conflicts with the interests of the CRC/UBC; See 29 U.S.C. § 501.

 

35.         The CRC expense reimbursement policy stated:

“[r]eimbursements will only be made for actual expenses properly incurred that are related to [CRC] business. All expenses should be reasonable and documented. Each expense (including meals) must be supported by a receipt or other documentation. The name of the person, the event, and purpose of the expense should be documented on the receipt. The CRC expense reimbursement policy stated: “[b]usiness entertainment expense is reimbursable only if it was incurred for legitimate union purposes.” See Exhibit 32.

36.         As the GP of the UBC, Mr. McCarron holds a duty to hold CRC/UBC money and property solely for the benefit of the CRC/UBC and their members.

37.         Mr. McCarron holds a duty to manager, invest, and expend CRC/UBC dues monies in accordance with the UBC Constitution and CRC by-laws.

38.         CRC expense policies state reimbursements will only be made for actual expenses incurred that are related to CRC business. All expenses should be reasonable and documented. Each expense (including meals) must be supported by a receipts or other documentation. The name of each person, the event, and purpose of the expense should be documented on the receipt.

39.         CRC expense reimbursement policy states that entertainment expense is reimbursable only if it was incurred for legitimate union purposes.

40.         CRC policy says that items of personal nature and souvenirs are not acceptable expenses.

FACTS SPECIFIC TO CLAIMS AGAINST MR. MCCARRON ON BEHALF OF CRC AND UBC MEMBERS

 

41.         Mr. McCarron owes fiduciary duties to members of the CRC/UBC and must ensure that CRC/UBC funds are spent according to 29 U.S.C. § 501 (a) and to internal expense policies. Under Section 501, union officials “are held to the highest standards and responsibility and ethical conduct in administering the affairs of the union,” Servs. Emps. Int’l Union, 718 F.3d at 1044.

42.         Mr. McCarron breached his 29 U.S.C. § 501 (a) fiduciary duties by allowing CRC/UBC dues monies to be misappropriated while he served as GP of the UBC.

43.         Mr. McCarron, as the GP, was aware of and complicit in the Mr. Nelson and Mr. Bond’s breaches of fiduciary duty.

44.         Mr. McCarron was aware of numerous occasions in which Mr. Nelson and Mr. Bond violated CRC expense policies and the LMRDA.

45.         Although not intended to be an exhaustive list, on behalf of the CRC and UBC, Mr. Gould provides the following examples of CRC Representatives, employees, Executive Board members, and officers spending CRC/UBC funds in violation of CRC expense policy and 29 U.S.C. § 501:

AA. Approved expenditures to rent machine guns, handguns, purchase ammunition, and clothing in Las Vegas.

BB. Approved expenditures for food and alcohol for CRC business representatives and spouses with no union business purpose on the receipts.

CC. Approved expenditures for entertainment with no names or union business purpose on the receipts.

DD. Approved expenditures for “city tours” with no names or union business purpose on the receipts.

EE. Approved expenditures for taxicab reimbursements without dates, times, names, locations, or physical receipts.

FF. Approved expenditures for Las Vegas shows with no names or union business purpose listed on the receipts.

GG. Approved expenditures for alcohol without itemized receipts, names, locations, times, or union business purpose listed on the receipts.

HH. Approved expenditures for hotel suite upgrades for CRC business representatives with no union purpose on the receipt.

II. Approved expenditures for CRC business representatives and spouses for Argosy Cruises with no union business purpose on the receipts.

JJ. Approved expenditures for sporting event tickets without the union business purpose listed on the receipts.

KK. Approved expenditures for excess luggage-baggage fees without the union business purpose listed on the receipts.

LL. Approved expenditures for lighters and cigars with no names or union business purpose on the receipts.

MM. Approved expenditures for concert tickets with no names or union business purpose listed on the receipts.

NN. Approved expenditures for airline tickets for CRC employee spouses and/or guests with no union business purpose listed.

OO. Approved expenditures for airline tickets with excessive costs to secure maximum “travel points” for Mr. Nelson and Mr. Bond without union business purpose.

PP. Approved expenditures for credit card cash advances with no names, receipt or union business purpose listed on the receipts.

QQ. Approved expenditures of $1000.00 plus per night hotel stays with no union business purpose listed and when hotel rooms were available for fractions of the $1000.00 per night expense.

RR. Approved expenditures for hotel rooms at places like the Waldorf Astoria, Lowes Madison Hotel, Liaison Capitol Hill, Mandarin Oriental, Phoenix Park Hotel, Wynn Las Vegas, Hyatt Regency, and more.

SS. Approved expenditures for meals at places like Capital Grill, McCormick Schmicks, Ruth’s Chris Steakhouse, 801 Chophouse, and more.

TT. Approved expenditures for a house account at Bartolino’s in St. Louis that was used for almost daily lunches for CRC staffers.

UU. Approved expenditures of several thousand-dollars on PAYPAL charges via CRC credit cards without itemized receipts, names, or union business purpose listed on the receipts/statements.

VV. Approved expenditures for airline miles for former EST Terry Nelson without a union business purpose listed on the receipts.

WW. Approved expenditures for several thousand-dollar Las Vegas hotel charges without itemized receipts, a union business purpose, and no names listed on the receipts.

XX. Approved expenditures to pay for benefits owed by CRC signatory contractors following failed CRC audits. The CRC funds used to pay for these benefits resulted in members paying for their own benefits.

YY. Approved expenditures for catering to CRC offices with no names, itemized receipts, or union purpose listed on the receipts.

ZZ. Approved expenditures for hunting-fishing licenses without listing a union business purpose on the receipts.

 

CLAIM FOR RELIEF – BREACH OF FIDUCIARY DUTIES UNDER 29 U.S.C. § 501 (b) – DEFENDANT DOUGLAS J. MCCARRON

 

46.         Mr. Gould incorporates by reference the allegations contained in Paragraphs 1 though 41 of his Verified Complaint as if fully set forth.

47.         As an officer, agent, representative of the CRC/UBC, Mr. McCarron occupies a position of trust in relation to the CRC/UBC and their members as a group.

48.         Per Section 501 of the LMRDA, officers, agents, and representatives of a labor organization “occupy positions of trust in relation to such organization and its members as a group.” In this case, the CRC/UBC, Mr. McCarron owes fiduciary duties to his members.

49.         Mr. McCarron, the General President of the UBC, breached his fiduciary duties to the CRC/UBC by failing to intervene when informed of clear violations of CRC policy, the UBC Constitution, and the LMRDA. Mr. McCarron continues to breach his fiduciary duty under Section 501 (a) by failing to properly account for CRC/UBC funds.

50.         The UBC, its General Executive Board, and Mr. McCarron as GP, refused and/or failed to sue or recover damages or secure a forensic accounting by a verified independent CPA or firm, or to seek appropriate relief within a reasonable time after Mr. Gould’s request was made on October 3, 2021.

51.         As of December 1, 2021, Mr. McCarron has failed to notify the Employee Benefits Security Administration about irregularities surrounding CRC General, Pension, Health, and Vacation Fund investment fees.

52.         Mr. McCarron’s failure to act in 2014, and his continued failure to act in the years since have cost the CRC and UBC millions of dollars in funds misappropriated by CRC leadership.

53.         As a direct and proximate cause of this negligence and Mr. McCarron’s current refusal and/or failure, the CRC and UBC have incurred actual damages in the form of lost money and property.

54.         Mr. Gould brings Count 1 to recover damages or other appropriate relief for the benefit of the CRC and UBC.

WHEREFORE, upon verified application and for good cause shown, Plaintiff Jonathan M. Gould, on behalf of and for the benefit of the CRC/UBC, prays this Court enter judgement in favor of and for the benefit of the CRC/UBC, and against Defendant Douglas J. McCarron, for actual damages fairly and reasonably believed to exceed the sum of $10,000,000 exclusive of costs and interests, for reasonable attorneys’ fees and costs and to compensate Mr. Gould for any expenses necessarily paid or incurred with this litigation, an injunction prohibiting Mr. McCarron from further wrongful and negligent acts, and for any such other and further relief, both at law and in equity, as this court deems just and proper under the current circumstances.

               

 

By:         ________________________

                                                       Jonathan M. Gould, Pro Se

                                                       7357 Providence Dr.

                                                       Edwardsville, Il. 62025

                                                       618-980-0205 cell

                                                       gouldj77@icloud.com

 

VERIFICATION

STATE OF ILLINOIS            )

                                             )         SS

COUNTY OF MADISON    )                  

     Jonathan M. Gould, being first duly sworn on oath, states that he knows the contents of the foregoing Complaint and believes same to be true.

                                                            ________________________

 

                                                                      Jonathan M. Gould

 

Subscribed and sworn to before me, a notary public, on this the ___ day of _____________ 2022.

 

                                                            ___________________________

Notary Public