Phoenix Metro Transit Union Treasurer Pleads Guilty to Thefts

ATU logoRichard Wayne Johnson may have thought his union wouldn’t find him out.  He guessed wrong.  This Tuesday, June 2, Johnson, formerly secretary-treasurer of Amalgamated Transit Union Local 1433 and a bus driver for Valley Transit, pleaded guilty in U.S. District Court for the District of Arizona to embezzlement, fraud and forgery in an amount of nearly $275,000 from the union, which represents thousands of bus, para-transit and light rail operators in the Phoenix metro area.  He faces 16 years in prison at his sentencing hearing in August.

Johnson served as a union official from 2005 until January 2012.  Shortly after assuming his post, funds started disappearing.  A fellow bus driver, Hayden Scheider, who worked side by side with Johnson, became suspicious.  “I started calling around to the Labor Department and other people to find out what was going on with our financial reports,” he said.  In the fall of 2010, the union conducted an audit.  The result:  Funds were missing and Johnson was the likely culprit.  Coincidentally or not, about two weeks after the release of the audit, an electrical fire broke out at the local office in Phoenix.

The audit triggered an investigation by local CBS-TV affiliate KPHO.  The probe laid out the details.  Johnson allegedly used the union debit card to make unauthorized purchases and the union checking account to write checks.  The purchases went for a variety of household items such as Costco cash cards, groceries and a $5,000 home sound system.  The checks mainly were written out to Johnson’s wife, daughter, son, daughter-in-law and son-in-law.  A secret audio recording of an April 2012 union meeting obtained by KPHO indicated an unidentified attendee saying of Johnson:  “He had a very elaborate scheme planned out, and it’s all in the family, a whole family affair here.  It’s not just him.”  At that same meeting, Local 1433 Vice President Michael Cornelius remarked:  “Richard Johnson was able to hide his embezzlement by failing to file federal tax deposits from the officers of the union and members.”  A KPHO Channel 5 news team tracked down Johnson at his house; Johnson denied embezzling any funds.

Denials aside, the end of the line wouldn’t be far off.  The union leadership turned over all evidence to the Phoenix Police Department, which concluded Johnson had embezzled about $273,000.  The Justice Department then took over and eventually filed criminal charges.  Following the guilty plea, Local President Bob Bean stated:  “We’re relieved that the legal process is over and happy that justice has been served.”  Michael Cornelius, Johnson’s replacement, asserted:  “We have strengthened our internal controls, hired a new accounting firm, and put into place policies that should prevent this from ever happening again.”  Local members no doubt are glad to hear that.