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AZ man accused of embezzling from union members

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PHOENIX (CBS5) -

The Amalgamated Transit Union Local 1433 is a brotherhood of sorts. The union represents thousands of Valley bus and light rail operators. But now one of the members is being investigated for allegedly embezzling from his own.

"This is corruption that goes to the deepest core of unionism and any type of union," Chuck Weigand, a bus operator, said. "It affects everybody in all walks of life."

Weigand and Hayden Scheider worked side-by-side with Richard Johnson as bus operators for the last decade. But they said that when Johnson became financial secretary of Transit Union 1433, money started disappearing.

"I started calling around to the Labor Department and other people to find out what was going on with our financial reports," Scheider said.

"Mr. Johnson would get up behind a podium and say we spent this much, we took in this much and this is how much we have left," Weigand said. "And one of his cronies would say, 'I make a motion to accept,' and it was accepted and nobody could ask any questions."

But someone did ask questions - the IRS.

"Richard Johnson was successfully able to hide his embezzlement by failing to file federal tax deposits from the officers of the union and members," said Union Vice President Michael Cornelius, during a secret audio recording at a union meeting in April, obtained by CBS 5 Investigates.

According to Weigand and Scheider, that was the first time many union members learned their money was missing.

Where did the money go?

According to the recording, the money went to Costco cash cards, diapers and food. But perhaps the largest expenditures were outlined in a Phoenix police report CBS 5 Investigates obtained: union checks made out to Johnson's wife, daughter, son, daughter-in-law and son-in-law.

"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," an unidentified person said during the recording made at the April union meeting.

Union members might have learned about the embezzlement in April 2012, but it was a year and a half prior that Johnson learned the union was being audited. And just two weeks after that, a fire broke out at the union offices. Investigators said the fire was electrical, but union members are now hoping the investigation will be reopened. [Click here for the full complaint (PDF)]

CBS 5 Investigates tracked down Johnson at his home. He said he did not embezzle any money and he has no idea where the money has gone.

No one from Transit Union 1433 would speak about the audio recording. It might be because of the fact that the union is now being investigated by the National Labor Relations board for threatening union members.

But Local 1433 did issue the following statement on Wednesday morning [Click here to view in PDF format]:

"Amalgamated Transit union Local 1433 believes its former Financial Officer embezzled funds from the Union.

"Upon suspicion of this wrongdoing, ATU carried out a thorough internal investigation. Subsequently, ATU filed a report with local law enforcement and has turned all evidence over to the Phoenix Police Department. ATU will let the appropriate authorities handle this case and let justice run its course.

"While we believe in 'innocent until proven guilty,' we do believe the evidence overwhelmingly points to a violation of the law.

"ATU does not tolerate this, or any, type of criminal behavior and remains committed to fighting any and all alleged corruption."

Copyright 2012 CBS 5 (Meredith Corporation). All rights reserved.

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