Veterans receive paychecks, but new accusations surface against boss

Veterans receive paychecks, but new accusations surface against boss »Play Video
KATU Problem Solver Kerry Tomlinson interviews Tim Leatherby in Salem in December.

SALEM, Ore. -- Local veterans who never received their wages after working for a business owner are at last getting their paychecks from the state of Oregon.

More than two dozen veterans worked for Tim Leatherby, of Leatherby Tools. He promised them $15 an hour to remodel apartments for an apartment complex in Salem. But the veterans said he did not pay as promised. KATU exposed some of Leatherby's lies and broken promises in December.

Now the Oregon Bureau of Labor and Industries is cutting paychecks for the veterans, using money from a special state fund for Oregon workers whose companies have gone out of business. A BOLI spokesman said the agency has investigated 21 wage complaints against Leatherby, and determined he owed the workers more than $16,000.

In addition, the KATU Problem Solvers discovered Leatherby has been accused of targeting veterans before.

Veteran John Tillis, who lives in the Fort Myers, Florida, area, said Leatherby married his daughter and then came to visit him in Florida in 2012. He said Leatherby described himself as a war hero.

"He had the complete uniform," said Tillis, "All the medals."

Tillis said Leatherby showed him a military mission coin from Operation Red Dawn and told him he had pulled Saddam Hussein "out of the hole."

"This guy described all that like he was there. You know, this guy, he was slick," said Tillis.

During one of KATU's visits with Leatherby in Salem in December, he showed a plumbing tool he called the "master extractor," used to remove drains, which he claimed was made from "iron plate off the vehicles coming home from war." He told KATU he was going to machine the tools and have veterans assemble them.  He also said he planned to build a factory in Silverton that would employ 30,000 veterans.

Tillis said Leatherby spun out a similar story in Florida, telling him he had orders for 5,000 units of the tool and needed help opening a factory to employ only veterans. Tillis said Leatherby asked for a loan and promised to pay it back in six months. Tillis agreed to help.

"He knew how to play John's military feelings, and he made up this military history," said Patricia Tillis, John's wife.

John Tillis said the couple took money from their credit line and loaned Leatherby $15,000. He said Leatherby cashed the check, left the state within a few days, and ended up divorcing his daughter. He said Leatherby never gave him the money back and the factory never opened.

"He just talked a mile-a-minute and whirled through our lives and was gone," said Patricia Tillis, "Along with our money."

"He can lie so good. He researches it," said John Tillis. "I would call him, probably, the best flimflam man I've ever met."

Leatherby did not return KATU's request for information about his financial transaction with John Tillis.

Leatherby signed an agreement with the Oregon Department of Justice in which he said he would pay the state $2,000, pay the workers their money and stop running a business in the state. The DOJ said it is watching to see if Leatherby is going to fulfill his agreement, or if the department needs to take further action.