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.

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Jim the Realtor

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