A civil lawsuit launched in the Federal Court also mentions her husband David Asmar and five others from the union, which claims to represent 18,000 workers across Victoria.
In a statement released on Friday, the commission said allegations include that Diana Asmar received more than $120,000 in financial reimbursements despite no evidence of relevant business expenses.
It also alleges she authorised more than $2.7 million to be paid to a printing business that invoiced for products and services that were never received.
"(Diana Asmar) personally received the benefit of cashback transactions relating to the printing conduct, including through the conduct of her spouse, David Asmar, who it is alleged was involved in arranging for the relevant payments to be made and received," the commission said.
The statement detailed allegations senior officers at the union's Victorian branch approved payments or allowed their unique personal banking tokens to be used by the branch's finance manager to make payments.
"The alleged conduct, which occurred between 2016 and 2021, significantly impacted the branch's finances and the ability of the branch to serve the best interests of its members," the commission said in a statement.
The Fair Work Commission has lodged Federal Court documents against Health Workers Union officials. (James Ross/AAP PHOTOS)
The Health Workers Union represents workers in public and private hospitals, pathology, disability, aged care services and other industries as the state branch of the Health Services Union.
The commission said the national union co-operated with their investigation, which did not include any other branches beyond Victoria.
"The proceedings have been commenced following a lengthy investigation into alleged financial misconduct within the Branch," the commission said.
"Aspects of that investigation relating to the audit of financial reports of the Branch are continuing."
The national union's secretary said Lloyd Williams said he was horrified by the allegations.
"Our union has no tolerance for misuse of members funds and it's important to specify that this is isolated to the Victoria Health Workers Union branch," Mr Williams said in a statement.
"The Union's national executive has consistently sought to stand Diana Asmar aside while this investigation has been underway."
He said the union's legal representatives would spend the next few days examining ways to continue efforts "to swiftly restore this branch of the Union to full integrity."Diana Asmar and the Health Workers Union have been contacted for comment.
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