Diana Frey is hoping for leniency. Given the evidence, she might not get it. On September 21, Frey, until recently the president of an independent local government workers union, Cincinnati Organized and Dedicated Employees (CODE), pleaded guilty in federal court to wire fraud. The outcome wasn’t much in doubt, as she already had signed a statement in August indicating her intent to cop a plea. But new details in the massive embezzlement case have revealed the destination of most of the take: real estate. Frey, with the help of certain family members, bought, sold or transferred half a dozen Cincinnati homes. She remains free until sentencing. No criminal charges have been filed thus far against the other persons.
Union Corruption Update has covered this story twice. Diana Frey, now 51, a resident of Cincinnati’s West Price Hill neighborhood, had headed CODE, an 800-member union of public-sector middle managers, professionals, technicians and nurses, since its founding eight years ago. She also was an administrative specialist with the Metropolitan Sewer District. It was her other world of work, as a union official, that attracted attention from prosecutors. The Justice Department on July 20 charged that for more than six years Frey transferred $757,009 in member dues to her own use by writing unauthorized checks, and making unauthorized wire transfers, ATM withdrawals and credit card purchases. Aided by an anonymous tip to the U.S. Department of Labor and a subsequent DOL investigation, a grand jury indicted her, though only for a nominal sum. Evidence was compelling that the true theft total was far higher. Frey, missing for weeks, appeared at her July 28 arraignment to plead not guilty. Facing up to 20 years in prison and a $1.5 million fine, she indicated her intent in August to plead guilty in hopes of obtaining a lenient sentence. On September 21, by now ousted from her union and municipal positions, she made that intent official.
Where did the money go? Court evidence reveals it went into residential real estate. Hamilton County, Ohio property records show that during much of the time of the thefts, Frey, along with husband Thomas Frey Jr., brother-in-law Jeffrey Frey, and a business entity known as ABA3 LLC, built an impressive portfolio of West Price Hill homes with union money. During 2007-09 the family bought, sold or transferred ownership of six properties valued at between $75,000 and $128,000. ABA3, named after Mrs. Frey’s daughters, Allison, Beth and Angela, bought one of the properties for $75,000 in 2008 and then, despite plummeting local home values, resold it the following year for $90,000 to one of her daughters. The extended family didn’t skimp on amenities either; Bill and Jeffrey Frey spent $27,000 to install a sunken swimming pool at one of the homes.
Diana Frey, to put it nicely, has a history. Convicted of theft in 1983, several years later, during 1988-90, she amassed multiple bad check convictions. Filing for bankruptcy in 1992, Frey the following year obtained a job as an aide to then-Cincinnati City Councilman Tom Luken. She would be fired in 1994 for unsatisfactory performance. In an action suggesting more than a little vindictiveness, Frey sued Luken for sex discrimination, harassment and retaliation, eventually settling out of court for $12,000. At her most recent job, she proved more efficient at collecting a salary than earning one. She seldom had been seen at her $64,000-a-year post with the Metropolitan Sewer District; indeed, since 2010 Frey devoted all her work time to union issues, sometimes with the City’s consent.
Frey’s former union isn’t happy about the recent turn events. “We join her victims in condemning her (Frey’s) actions in the strongest terms possible and call for her to be punished to the fullest extent of the law,” announced police and fire union officials in a prepared statement. CODE already has filed a civil suit in Hamilton County (Ohio) Common Pleas Court in hopes of preventing her from receiving her City employee pension and thus raising the likelihood of being reimbursed. Meanwhile, the City is preparing pre-sentencing reports which should reveal how she kept her scheme going for so long and how much restitution she will owe. As for Ms. Frey, things have gone from bad to worse. During late October and early this month, she spent at least five nights in two different area jails on unspecified charges. Neither her attorney nor federal prosecutors would offer an explanation.