INWOOD — An influential lobbyist with close ties to City Council Speaker Melissa Mark-Viverito failed to pay his nonprofit's workers tens of thousands of dollars in wages, using the money to cover an IRS debt instead, a new lawsuit charges.
Luis Miranda Jr. personally directed money that should have been used to pay employees at the nonprofit Audubon Partnership for Economic Development, which he chairs, to instead pay the IRS a $500,000 debt owed by a progressive Dominican group that hired both Miranda's wife and his independent lobbying firm, court documents say.
The revelation comes in a lawsuit filed in Manhattan Supreme Court on Monday by Carmen Diaz-Santiago, former executive director of Audubon Partnership. She said the organization owes her at least $137,170 in unpaid wages and damages.
The trouble started in 2011, when Audubon Partnership, which provides support for small business owners and landlords who preserve affordable housing, faced financial difficulties due to funding shortages, according to court documents.
Diaz-Santiago, who began working as Audubon's executive director in 2008 and made $75,000 per year, agreed to forego thousands of dollars in wages so that other Audubon employees could be paid, she said in the lawsuit.
Then, in 2013, Audubon merged with the Acacia Network, a nonprofit the focuses on health, education and affordable housing. Acacia agreed to cover Audubon’s outstanding debts of about $150,000, including Diaz-Santiago’s unpaid wages, according to court documents and Miranda's current lobbying group, MirRam.
But Diaz-Santiago never got any money, nor did other employees who were owed back wages, she said in the lawsuit. She asked about the issue in February 2013 and June 2013 but never got a response, the suit said.
Diaz-Santiago got suspicious in June 2013 when she learned that Acacia was taking out a loan against Audubon's building, according to the lawsuit.
She assumed that the loan would be used to pay Audubon's debts, including the outstanding staff salaries, but she later learned that the money was used to pay off a $500,000 IRS debt for the Community Association of Progressive Dominicans, another nonprofit that Acacia was in the process of acquiring, the suit said.
Acacia CEO Raul Russi told Diaz-Santiago that Miranda was responsible for the decision on how to spend the money, the suit said.
“I love Miranda like a brother and you might hate to hear this but the building was used to pay the debt of [Community Association of Progressive Dominicans],” Russi said, according to the lawsuit.
The Progressive Dominicans organization had hired Miranda's wife as a consultant at its mental health clinic, and Kim Ramos, who worked for Miranda's MirRam group, was on the organization's board, court documents said.
Neither the Acacia Network nor the Community Association of Progressive Dominicans responded to requests for comment.
Miranda told DNAinfo New York that Diaz-Santiago's accusation about the loan is untrue. He also said he resigned as chairman of Audubon before June 2013, though he is still listed as chairman on the organization's website.
“There was no loan on the building whatsoever," Miranda said in an email to DNAinfo. "I resigned as Chair when Audubon affiliated with Acacia in May of 2013 and since then have not been involved with Audubon staff or organizational issues.”
A MirRam spokeswoman said the sides are working to settle the lawsuit, but she did not provide further details.
None of the other parties involved, including Diaz-Santiago, responded to questions.
This is not the first time Miranda has come under scrutiny for connections between his lobbying group and nonprofits to which he has ties.
Both the Audubon Partnership and Acacia Network are members of the Hispanic Federation, an umbrella organization founded by Miranda in 1990 that advocates and provides funding to Latino nonprofits. The group now employs the MirRam Group as lobbyists.
MirRam also served as the chief political consultant on Mark-Viverito's campaign for City Council speaker. In her first budget, Mark-Viverito quadrupled the amount of city funding the Hispanic Federation received after MirRam lobbied on the Federation's behalf, Crain's New York reported.
The New York Post has also reported that Miranda has given political allies jobs at the nonprofit.
Diaz-Santiago was let go by the Acacia Network in August 2014, the lawsuit said. At the time, Acacia COO Pam Mattel promised that Diaz-Santiago would be paid her accrued salary, the suit noted.
“I know that you have worked hard during the past several years to provide economic development opportunities to the local community. Unfortunately, we are unable to sustain this position,” Mattel wrote in a letter referenced in the court documents. “We will make sure that the accrued salary in arrears is sent to you.”
Diaz-Santiago has still not been paid her overdue salary, the suit added.