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Non-profit organization accused of mismanagement

by Mindy Aguon

Guam - Several years ago Able Industries received in excess of $5 million a year in sales.  The non-profit organization is the largest employer of individuals with disabilities on the island. Able has contracts with the military to provide food services, retail operations and base wide janitorial services at Andersen Air Force Base, Camp Covington and Naval Station.
But the company, now under new management, is allegedly going under - raising concerns of mismanagement and prompting calls for a federal probe and other investigations.

A former employee and board of trustee of Able Industries has come forward and believes Guam could lose out on millions in federal money and 200 people could be out of work or have to transition to another non profit organization unless someone steps in and investigates. "The program is in jeopardy and Able Industries is a Nish affiliate and the Nish people in the U.S. are deeply concerned about what is going on," said Johann Sobredo.
Sobredo was hired by Able Industries last year to come in and assist with compliance issues. Able Industries of the Pacific is the island's largest employer of people with disabilities, but Sobredo contends that the non-profit organization is being run into the ground. "Part of that reason is because of the mismanagement, what I believe to be the mismanagement of funds," he said.
The company's 401(k) is an example, Sobredo contends Able Industries stopped making payments but employees are looking to pull their retirement either because of financial hardships or because they're leaving the company. "You cannot hide that fact that you haven't paid 401(k) for persons with disabilities since January 2010 money that belongs to them it doesn't belong to the non-profit," he added.
Sobredo alleges that able industries board member, Elmore Cotton and president and CEO Joaquin Leon Guerrero took over the company when founder Andrew Porter died in 2009. Ken Leon Guerrero and Moe Cotton ended up taking control of the company," he detailed. "He himself created his own salary together with the chairman of the board Mr. Cotton to give him a $96,000 salary let's give Mr. Leon Guerrero, a car, a cell phone and a credit card."

Sobredo questions how the two were able to take control and further alleges that Cotton and Leon Guerrero have conspired to line their own pocket books at the detriment of the 200+ employees at the company. He explains that a year and a half ago, Able Industries was located on base in what he believes was a rent-free facility. But since Leon Guerrero and Cotton (also a principal broker for Century 21) took over, Sobredo alleges the company moved its offices and is now paying rent to Century 21.

"There's a conflict of interest here obviously. I mean, you could try to say it's a gray area. But as the chairman of the board it's your fiduciary duty to not to get into a conflict of interest or any area that is gray," said Sobredo.
Sobredo also alleges that he discovered a contract for renovations at a store at AAFB. But when he started digging and went straight to the individual who was supposed to do the work, he was surprised at what he found. He explained, "I called him up and asked, 'Did you do any work on Andersen Air Force Base'; he said, 'No, I did work at Mr. Ken Leon Guerrero's home. I did the work at Mr. Ken Leon Guerrero's home, specifically tiling his floor, doing his countertop and installing his bathroom fixtures.' Of course, that caught me by surprise."
Sobredo contends there is no project on base, saying, "When I confronted Mr. Leon Guerrero about this check, he said, 'No, you've got it wrong.'  I paid this guy cash and I gave him a deposit for work, we're going to do later on. It's so complicit."
He also accused Leon Guerrero and Cotton of using the company's credit cards for personal use and never paying back what they spend.

KUAM News contacted Leon Guerrero, who agreed on two occasions to do an interview. The day of the interview, Able Industries provided us a statement in lieu of an interview denying any mismanagement at able industries. The company provided a letter from ASC that states the company is fully compliant with applicable federal and local tax regulations and able is in technical compliance with the employer contribution for 2010.

With regard to the other accusations, Able contends the allegations have been investigated and are without merit.

Sobredo disagrees and is hoping an investigation will be launched by the attorney general or the U.S. Attorney's Office. He said, "We need an independent person appointed by the court to come in and help the people. At the end of the day that's what it is. I'm not seeking a position in the organization, as a trustee."
We should note that there are two separate lawsuits that have been filed regarding Able Industries - one in the Superior Court has even gone as far as pushing for a receiver to come in and take over the non-profit organization. The second, filed in the District Court, is a lawsuit able filed against former board of trustees who allegedly withdrew more than $700,000 of the company's money. That litigation spurred a counterclaim that was filed against Leon Guerrero, cotton and others.

Just this afternoon the District Court granted a voluntary dismissal of the case and the court noted that the control of funds is an issue to be addressed in the Superior Court case. Sobredo meanwhile has sent his complaints to the local Attorney General's Office, the U.S. Attorney's Office and the Naval Criminal Investigation Service.

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