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
