Ex-NLRB Compliance Officer Pleads Guilty to Stealing $400K in Back Pay

National Labor Relations Board, located at 1099 14th Street, NW, in Washington, D.C. April 16, 2012. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL.

A former National Labor Relations Board compliance official pleaded guilty Monday in Washington to charges he used his position to steal more than $400,000 in back pay that was meant for victimized employees.

Hector Martinez, who once served as a compliance officer in the agency’s Los Angeles office, was charged in June with creating fake victims in cases where employers were found to have violated federal labor rules and ordered to make back pay awards.

Rather than sending the back pay awards to those victims, Martinez deposited the funds in his own accounts, sometimes taking the full amount and, in other instances, skimming off the top, leaving the victims with less than they were owed, according to the U.S. Attorney’s Office for the District of Columbia.

In charging papers, prosecutors in Washington described Martinez’s compliance officer job as a “position of public trust” and said he was responsible for working with employers to identify victimized employees, calculate back pay and notify those workers of their awards.

“These individuals were not always aware that they were due payments or in what amount,” prosecutors alleged. The government said Martinez opened at least eight bank accounts at three financial institutions “to further the scheme and conceal backpay.”

Federal prosecutors said Martinez carried out the scheme from December 2010 to October 2015, when he was placed on administrative leave. By the time of his firing in July 2016, Martinez had worked at the NLRB for 23 years.

In his guilty plea, Martinez admitted to improperly diverting the back pay funds nine employers had paid to the NLRB with the expectation that it would be funneled to employees. The NLRB has since “engaged in remedial efforts,” the Washington federal prosecutor’s office said Monday.

As part of his guilty plea, Martinez has agreed to pay $435,000 in restitution to the NLRB. His sentencing hearing before U.S. Judge Randolph Moss, in the U.S. District Court for the District of Columbia, is scheduled for Nov. 6. Martinez was represented by the federal public defender’s office in Washington.