The California Attorney General’s Office has filed felony charges against the executive director of the state’s largest union, alleging that an investigation into possible campaign finance violations revealed that Alma Hernández and her husband had under-reported their income by more than $ 1.4 million to evade tax.
Hernández has resigned as executive director of the Service Employees International Union California State Council, ending her 11-year tenure as the head of the 700,000-member organization’s advocacy work at the State Capitol, where she is considered one of the most powerful forces in politics.
“Workers deserve leaders they can count on to help them achieve these goals at the bargaining table and through political advocacy, but also leaders they can trust,” Atty. General Rob Bonta said. “When there is reason to believe that trust has been broken and crimes have been committed, we have an ethical duty to investigate – we owe it to the people of California.”
A lawyer for Hernández and her husband, Jose Samayoa Moscoso, challenged the charges in a criminal complaint this month.
“We do not agree with the charges in this case, and they distort the real facts to reflect their hard work to make an honest life for themselves and their families,” attorney Jeffrey Tsai said. “I cannot comment on legal issues related to Ms. Hernández and Mr. Samayoa. [Moscoso]. But allegations in any court case are not evidence, and anyone in a criminal case is presumed innocent until their guilt is proven beyond a reasonable doubt. ”
Named one of Capitol Weekly’s Top 100 California Politicians, Hernández is a veteran political operator who helped activate an army of SEIU volunteers to fight Gov. Gavin Newsom’s attempted recall last month.
California SEIU President Bob Schoonover said the organization was deeply concerned about the allegations and would continue to cooperate fully with authorities.
“Any misuse of funds is unacceptable, and we pledge to redouble our efforts to ensure that all officers and personnel adhere to the highest standard of ethical and financial conduct,” he said.
Hernández faces two counts of robbery related to two payments of $ 7,200 and $ 4,500 from a SEIU-sponsored political action committee to Moscoso, and a charge of perjury for reporting the payments on a campaign form. The attorney general’s office alleges in court documents that payments were made for food and drink that Moscoso never provided during campaign events leading up to the 2014 general election.
Authorities charged Hernández and Moscoso with five counts of tax evasion for allegedly failing to report $ 1.4 million in income on their 2014 to 2018 tax returns, totaling $ 143,000 in unpaid taxes. According to the attorney general’s office, Moscoso also allegedly paid employees at his under-table air duct cleaning company and failed to file quarterly reports with the Department of Employment Development and paid more than 16,000 $ in taxes on employment.
Court documents indicate that the state Department of Justice’s investigation began in March 2019, when the California Fair Political Practices Commission contacted the Attorney General’s Financial Fraud and Special Prosecutions section.
The FPPC – which investigates and regulates campaign finance, conflict of interest, lobbying and government ethics – discovered questionable payments to Moscoso from a union-funded political action committee to support the unsuccessful campaign of Democrat Jose Solorio in the State Senate against Republican Janet Nguyen in 2014, according to court records. As treasurer of the committee, Hernández is said to have submitted and made the payments.
The attorney general’s office obtained a search warrant for the couple’s bank records and questioned them at their Glendale home in late June 2019. Authorities allege Moscoso “admitted to being an air duct cleaner and not being involved in food services “and said he had not done so. recognize invoices.
The state alleges that Hernández said the payments were for the feeding campaign volunteers, although the volunteers interviewed said “they never observed any food services.”
Several search warrants were obtained for the couple’s personal and business bank accounts, and the records were checked by the Department of Justice and examined by officers from the Franchise Tax Board, who said they discovered suspected discrepancies between the deposits. and the couple’s receipts and tax returns.
The Department of Justice executed search warrants in October 2020 at the couple’s home, Moscoso’s business, and their tax preparer’s office, collecting US Internal Revenue Service documents, tax records , bills, check books, computers, cell phones and other information, according to court records. EDD investigators also found evidence they say shows Moscoso did not file a report or pay UI and disability insurance to the agency.
“At the end of the FTB investigation, the results revealed that Hernández and Moscoso had underreported income and tax deficits for the years 2014 to 2018,” according to court records.
All of the charges against Hernández and Moscoso are felonies, and the Justice Department is treating the case as an aggravated white-collar crime.
The couple could be ordered to pay more than $ 700,000 in restitution and fines and face jail time if found guilty, according to the attorney general’s office.