Lovely……why isn’t he in jail?
Collecting hundreds of thousands of dollars in unearned vacation pay, and tens of thousands in purchases on association credit cards which were then posted on eBay and deposited into a personal bank account; these are only a few accusations lobbed at the former CEO for the San Diego Association of Realtors, Mike Mercurio.
In a newly filed 110-page lawsuit, four former high-level executives at the San Diego Association of Realtors (SDAR) say they were fired after investigating what they claim was a long-running scheme by Mr. Mercurio to funnel SDAR funds into his personal account.
The San Diego Association of Realtors is a large and powerful lobbying group that is funded by annual dues from its 20,000 or so members.
However, more than a million dollars in those member dues were diverted from lobbying efforts into the pocket of former CEO Mercurio, says the lawsuit.
The plaintiffs, which include the association’s former Chief Operating Officer, Director of Human Resources, Controller, and Marketing Chief, claim Mr. Mercurio, “engaged in massive embezzlement, stealing over $1 million from SDAR, and further directed, and participated in, the falsification of financial documents, extensive personal use of company credit cards, payroll fraud, and tax evasion.”
To make matters worse, plaintiffs, Heather Pena, Laura Martella, Jon Schwartz, and Nicholas Hoffer, say instead of supporting them after discovering what they claim was a long-running embezzlement scheme, the association’s board “shot the messengers” by launching investigations into their conduct and later firing them without cause.
During a subsequent investigation, two of the four plaintiffs in the newly filed lawsuit discovered Mr. Mercurio then hired a new payroll director and directed them to “add 300 hours” of vacation pay to his reserve. They also discovered that Mr. Mercurio, according to the lawsuit, “stole hundreds of thousands of dollars from payroll using a fraudulent ‘PTO cash-out scheme.”
Falsely inflated vacation hours were not all that the plaintiffs found.
The four plaintiffs say they then became suspicious of reimbursement requests from the then-CEO.
According to the complaint, Mr. Mercurio allegedly purchased tens of thousands worth of expensive watches, handbags which he stated were gifts for volunteers on his personal credit card and was reimbursed from SDAR accounts. However, instead of going to volunteers, Mr. Mercurio reportedly had his executive assistant sell the items on eBay with instructions of depositing the money into his bank account.
Reads the lawsuit, “For her efforts and discretion, and in an attempt to bribe her silence, Mercurio offered [his assistant] ten percent of the sale of the items. [The assistant] was very stressed and uncomfortable with the entire scheme, rejected the offer of a ‘commission,’ and ultimately left her job.
The accusation that the CEO was paying for, getting reimbursed, and then selling the items for double the profit prompted upper management, the plaintiffs in the case, to launch a larger investigation into Mercurio’s actions.
During that investigation, the lawsuit claims that Mercurio had a habit of losing receipts for large ticket items or purchasing times without any documentation.
One such example included several charges for “smart tuition” and “smart tech” items for $1,696 apiece. The amount, says the lawsuit, was the exact same amount as Mercurio’s daughter’s monthly tuition at Cathedral Catholic High School. Reads the lawsuit, “Cathedral Catholic High School uses Smart Tech as an online tuition payment system.”
The plaintiffs then discovered that Mercurio spent tens of thousands of dollars in stays at lavish hotels throughout San Diego County.
In all, the lawsuit claims that Mercurio spent $200,000 in the span of a few months in 2020.
In addition to the hundreds of thousands of dollars in boosted vacation pay, Mr. Mercurio is accused of also receiving $24,000 a year in car allowance as well as $75,000 in personal travel allowance.
Link to Full Article
The message from the new guy couldn’t be more lame:
Dear Members and Supporters,
I am both humbled and honored to stand before you today as the recently appointed CEO of our esteemed association. For many years, I have been deeply invested in the success of this organization, having served as a dedicated volunteer, past board member, and past president. Throughout my journey here, I have witnessed the incredible, positive, impact our organization has made on REALTORS®, the real estate community, and property owners alike, and I am incredibly excited to take on the responsibility of leading us into a new chapter of progress and prosperity.
As we embark on this journey together, I want to reaffirm my unwavering commitment to our members and supporters. Your passion and dedication have been the bedrock of our success, and it is my utmost priority to ensure that you continue to receive the highest level of support and services. Together, we will foster an environment that encourages fiscal responsibility, collaboration, innovation, and the exchange of knowledge. This work has already begun with our employees, Board of Directors, and committees, and with our National, State, and local sister Associations. Our success as an association relies on the success of each individual member, and I am dedicated to providing you with the tools, resources, and opportunities necessary to thrive in an ever-evolving real estate landscape.
In light of the Board of Director’s action to replace the former CEO and in light of the employment lawsuit that has come to our attention, it is important to address these recent events. While we recognize that there may be interest and speculation surrounding these matters, as an employer, we are bound by legal and ethical obligations not to disclose confidential personnel details or engage in discussions regarding ongoing legal proceedings. Please rest assured that we take such matters seriously and are committed to defending the organization’s interests within the confines of the law. We have faith in our legal system and trust that justice will prevail. Moving forward, my vision is to strengthen the bond between our members and the association, reinforcing the spirit of unity, collaboration, and innovation, that has defined us throughout the years. Together, we will overcome challenges, seize opportunities, and continue to make a meaningful difference in the lives of our members and the industries we represent.
Thank you for entrusting me with this incredible responsibility. I am eager to serve you all as your CEO and to work collectively, with integrity and trust, in shaping a vibrant and prosperous future for our beloved trade association.
With gratitude and anticipation,
Cory Shepard, CEO
From the end of 2019 through 2021, California – a state with the highest taxes in the US – added more than 116,000 millionaire taxpayers, a record for a 2-year period and more than in the previous decade combined. The number of residents making more than $50 million surged 158% to 3,182! In total, more than 288,000 Californians, or 0.7% of residents, reported over $1 million in income in 2021. New York saw the number of millionaire taxpayers in that period increase to about 80,000 people, or 0.4% of its population….almost half percentage wise! While some berate and critique California, the facts and data are astounding: 2022 GDP was $3.59 trillion, close to the size of Germany’s GDP, the 4th largest economy in the world! Does California have problems and challenges? You bet! As does every state in the US. The top 1% of California earners account for roughly 50% of total personal income tax revenue.
This has been going on for at least a dozen years and every predecessor to the team who filed this suit was well aware of the corruption. Most board members were in on it as well. Why do you think the association developed the “International Real Estate Collaborative”? This was a ruse to payback board members for their cooperation by taking them on lavish association paid junkets vacations to Europe and other places.
Elections under the former CEO were manipulated both at the board level as well as the annual member elections. The CEO had back door access to the online election portal. Board elections were manipulated as well to ensure the presidential candidates were only those in his inner circle.
Total corruption, but as easy as stealing candy from a baby because honestly, how many realtors actually paid attention? Buffoons paying their dues for MLS access, substandard technology, and the oh, so important ‘Ethics Course” are an easy target.
You can bet the real number is five to ten times what’s been reported here.
If people need solid documentation, I have a ton of it saved from 2013-2015. I used to work there and if any legal folks need assistance- please let me know
Greetings,
I served as an ex-officio member of the International Real Estate Collaborative for a little over three years up to March 2020.
As a leading active member on the Collaborative I saw nothing to indicate inappropriate travel was undertaken by Collaborative members/staff or SDAR executives. For example, trips to the annual MIPIM conference in France were absolutely appropriate – to illustrate San Diego real estate market opportunities to an international audience widely unfamiliar with San Diego.
Another purpose of the Collaborative was to help transform a strikingly provincial real estate community in San Diego through education, engagement and experience.
If Dan Oh has concrete evidence of corrupt or inappropriate travel regarding the IREC, he should present it…rather than sling muddy innuendo.
David Edick Jr
Past President, San Diego World Affairs Council
Past President, San Diego International Sister Cities Association
How can people get a hold of you?
Send me your email and I’ll pass it along?
Regarding the international real estate collaborative, the dirt will come out in the wash, you can bet on that. Grab some popcorn, a cold beverage, sit back and enjoy the show, If bro on the board thinks there was nothing inappropriate going on with travel and the expenditures, he’s just as clueless as the 20k members of SDAR.
The association is doomed and will implode, as it should. This lawsuit is just the first of many. The class action is coming and will ensure the death of this corrupt cabal of douchebags. Sadly, this is probably the best thing that can happen to the industry, CAR and NAR need to go.
Corey S will serve for two years and earn $1.2m for seeing this through to the death. What a nice gig.