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Complaint alleges coverup in SAG pension plan embezzlement scheme

September 16, 2011 |  1:01 pm
A former employee of the Screen Actors Guild pension and health plans has filed a complaint alleging that he was fired for attempting to uncover an embezzlement scheme involving a previous executive of the fund.
Craig E. Simmons, a former executive with the SAG plans, alleges in a complaint filed this week with the U.S. Department of Labor that he attempted to blow the whistle on a $5 million to $10 million
embezzlement scheme by the plans' former chief information officer, Nader Karimi.
But Simmons alleges in his complaint that his former boss, Screen Actors Guild-Producers Pension and Health Plans Chief Executive Bruce Dow, told him to "mislead" the board of trustees and Department of Labor investigators about the abuses and that when he refused to do so, he was fired in March. Simmons' complaint also accuses Dow and other current executives of participating in various kickback schemes to benefit themselves or their relatives.
"There are numerous ... violations which have not been investigated nor addressed by the Board of trustees,'' Simmons said in the complaint. "Unfortunately, the Trustees have apparently chosen not to act on the information provided to them despite strong evidence of violations. As a result, I am now seeking an additional independent investigation into this troubling matter by the [Department of Labor]."
A spokeswoman for Labor said it was the department's policy not to comment on complaints or pending investigations.
SAG spokeswoman Pam Greenwalt noted that the health and pension plans are multi-employer benefit plans that the union itself does not administer.
The plans, which control about $2.5 billion in assets for SAG members, are overseen by trustees who represents employers and SAG members. "We are confident that the plans' trustees are taking the appropriate steps to ensure proper oversight and protection of the plans' assets and will continue to safeguard the interests of plan participants," Greenwalt said.
In his complaint, first reported by The Wrap, Simmons alleges that he uncovered repeated acts of criminal and civil wrongdoing by current and former employees of the funds. Those included claims that Michael Estrada, the plans' executive director, and Dow, the chief executive, used inside information on purchases of stocks and funds for their personal benefit.
Simmons, who did not immediately respond to a request for comment, also said in his complaint that the plans conducted business with an insurance company operated by Dow's wife, allowing her to receive "substantial commissions and business advantages" and the plans employed his brother-in-law in a "phantom" job.
According to his letter to Labor, Simmons said that he made specific complaints in March and August to the SAG-PPHP board of trustees about the alleged improprieties, but that no action was taken.
Dow, Estrada and Karimi were not immediately available for comment. Representatives of SAG-PPHP did not return calls.
[Update: The board of trustees of the SAG-PPHP issued the following statement: "We take these allegations very seriously and we have retained outside counsel to conduct a full review of the matter. Bruce Dow has a nearly thirty year unblemished record of running this organization and continues to have the full support of the SAG-PPHP Board, as we believe these allegations are without merit.]
-- Richard Verrier