August 2009 Archives

The Office of the President and other White House officials are defendants in a free speech lawsuit filed by a prominent physician group, and a non-profit advocate for inner-city poor.

The White House has "unlawfully collected information on political speech," thereby illegally using the power of the White House to chill opposition to its plans for health care reform, according to the complaint filed in District Court for the District of Columbia, by the Association of American Physicians and Surgeons (AAPS) and the Coalition for Urban Renewal and Education (CURE)

The lawsuit was prompted by the White House solicitation for the public to report any "fishy" comments to 'flag@whitehouse.gov.' Although the White House slightly revised its data collection procedure last week, the email address still exists, the illegal activity continues, and is part of an "unlawful pattern and practice to collect and maintain information" on the exercise of free speech, which "continues in violation of the Privacy Act and First Amendment even if the Defendants terminate a particular information-collection component due to negative publicity."

The lawsuit outlines how the White House has employed a form of "bait-and-switch" tactic of accusing the Plaintiffs and other opponents of spreading misinformation about the Administration's goals for health care reform, and thereby refusing to 'come clean' about its real agenda.

The lawsuit outlines that the White House knew that the data collection would chill free speech, and in fact, intended to do just that:

        "43.  As part of their effort to advance the White House healthcare
        reform agenda, Defendants have accused opponents (including
        Plaintiffs) of spreading misinformation on issues such as whether
        (a) health reform would provide public funding for abortions, (b) put
        "death panels" in place to deny care to the elderly or infirm,
        (c) amount to a government takeover of healthcare, and (d) increase
        healthcare costs..the Defendants and the administration have spread
        misinformation, semantics, and disinformation on these topics.....

        "45.  By denying and continuing to deny that healthcare reform
        legislation includes "death panels" that make individual life-or-death
        decisions on the elderly or infirm, the Defendants and the current
        administration have ignored and implicitly denied and continue to
        ignore and implicitly to deny both that their healthcare reform agenda
        involves rationing healthcare..."

"My hate mail started shortly after the White House issued the 'fishy' request," said Kathryn Serkes, Director of Policy and Public Affairs for AAPS. "We were quite visible and vocal before then, so it doesn't seem like a coincidence. Who did they share their data with? With whom might they share it?"

AAPS and CURE demand that the White House remove all information already collected, and further, be prohibited from collecting any personal data in the future.

SOURCE Association of American Physicians and Surgeons (AAPS)

Lee William Dubois, a former Department of Defense (DoD) contractor, was sentenced today to three years in prison for his participation in a scheme to steal fuel worth approximately $39.6 million from the U.S. Army in Iraq, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney for the Eastern District of Virginia Dana J. Boente.

Dubois, 32, of Lexington, S.C., was sentenced today by U.S. District Court Judge Gerald Bruce Lee in the Eastern District of Virginia. Dubois had pleaded guilty to a one-count information charging him with theft of government property on Oct. 7, 2008. In connection with his plea, Dubois testified at the trial of his co-conspirator, Robert Jeffery, who was convicted by a jury on Aug. 11, 2009. Dubois also repaid to the U.S. government $450,000 that represented the illicit proceeds of the scheme.

In his plea, Dubois admitted that between July 2007 and May 2008, he and his co-conspirators, purportedly representing DoD contractors in Iraq, used fraudulently-obtained documents to enter the Victory Bulk Fuel Point (VBFP) in Camp Liberty, Iraq, and presented false fuel authorization forms to steal aviation and diesel fuel from the VBFP for subsequent sale on the black market. According to plea documents, the United States owns and operates the VBFP in support of Operation Iraqi Freedom. The VBFP supplies aviation and diesel fuel to both military units and U.S. government contractors operating in and around the VBFP. To retrieve and transport the stolen fuel from the VBFP, Dubois admitted he and his co-conspirators employed approximately 10 individuals to serve as drivers and escorts of the trucks containing the stolen fuel. These individuals were able to enter the VBFP illegally by using government-issued common access cards.

Dubois admitted he obtained the cards by falsely representing to the U.S. Army that the drivers and escorts were employees of a DoD contractor, when, in fact, they were not employed by any government contractors. In addition, Dubois admitted he went to the VBFP and presented false documents authorizing his co-conspirators to draw fuel. Dubois also admitted that for two months during the scheme, he served as the lead escort for the stolen fuel. According to information contained in the plea documents, during the course of the scheme, Dubois and his co-conspirators stole approximately 10 million gallons of fuel worth approximately $39.6 million. Dubois received at least $450,000 in personal profits from the subsequent sale of the fuel on the black market.

In related cases, Robert Jeffery was convicted on Aug. 11, 2009, after a two-day jury trial, of one count of conspiracy and one count of theft of government property for his role in the fuel theft. Robert Young and Michel Jamil each pleaded guilty to participating in the same scheme. The evidence at trial showed that Jeffery served as an escort for the fuel trucks and retrieved hundreds of thousands of gallons of fuel from the VBFP. Sentencing for Jeffery is scheduled for December 11, 2009.

Young, 56, a former captain in the U.S. Army, pleaded guilty on July 24, 2009. In his guilty plea, Young admitted that between October 2007 and May 2008, he and his co-conspirators used fraudulently-obtained documents to enter the VBFP and presented false fuel authorization forms to steal aviation and diesel fuel from the VBFP for subsequent sale on the black market. As a result of the scheme, Young received approximately $1 million in personal profits. Sentencing for Young is scheduled for Oct. 30, 2009.

Jamil, 59, pleaded guilty on July 27, 2009, with his role in the scheme. Jamil admitted that in March 2007, he and two of his co-conspirators arranged for the creation of a false Memorandum for Record (MFR) authorizing individuals to draw fuel from VBFP, purportedly on behalf of a company serving as a contractor to the U.S. government. Jamil admitted that he and his co-conspirators used this false MFR and others to steal large quantities of fuel from the U.S. Army for subsequent sale on the Iraqi black market. As a result of the scheme, Jamil admitted he received between $75,000 and $87,500 in profits. Sentencing is scheduled for Nov. 13, 2009.

The case is being prosecuted by Special Assistant U.S. Attorney Steve Linick, Deputy Chief of the Criminal Division's Fraud Section, and Fraud Section Trial Attorneys Andrew Gentin and Brigham Cannon. The investigation of this case was conducted by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service, the Washington Field Office of the FBI and members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).

The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations, including in Afghanistan, Iraq and Kuwait.

Source: US Dept. of Justice

Hansruedi Schumacher and Matthias Rickenbach, both of Switzerland, were indicted today for conspiring to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced. According to the indictment, Schumacher worked as an executive manager at Neue Zuercher Bank (NZB), a Swiss private bank located in Zurich, Switzerland. Rickenbach worked as a Swiss attorney who provided legal advice and services to U.S. clients. Both are alleged to have aided wealthy Americans conceal assets and income in Switzerland from United States authorities.

According to the indictment, Schumacher and Rickenbach helped wealthy American clients conceal their assets by establishing sham and nominee offshore entities to hide their U.S. clients' assets and income while allowing these clients to still control the assets and make investment decisions.

The indictment further alleges that Schumacher and Rickenbach regularly traveled to the United States to conduct banking and investment activities with their U.S. clients and that when they traveled they concealed their business activities in the United States by falsely representing to American authorities that they were traveling to the U.S. for personal reasons. While in the United States, the defendants would sometimes bring cash for their clients..

According to court documents, Schumacher and Rickenbach aided their wealthy American clients repatriate money back to the United States using several deceptive means. Schumacher and Rickenbach helped their clients obtain offshore credit cards and created sham loan documents. Additionally, Schumacher and Rickenbach falsified bank documents to generate the appearance that assets of their U.S. clients belonged to Swiss citizens, and they falsified documents to disguise their United States clients' repatriation of offshore funds as inheritances from foreign citizens.

According to court documents, Schumacher and Rickenbach discouraged their U.S. clients from voluntarily coming into compliance in the United States. Instead, the defendants encouraged their clients to transfer their assets from UBS, a large Swiss bank, to NZB, a smaller bank in Switzerland. The defendants told their clients that their assets and identification would be safer at NZB because they had no presence in the United States and was therefore less likely to be pressured by the American authorities to disclose the identities of their United States clients.

"The Justice Department will continue to investigate leads provided by U.S. taxpayers who have come forward to disclose foreign bank accounts and will prosecute those foreign bankers and banks who illegally helped U.S. clients evade taxes," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department's Tax Division. "We encourage foreign banks to come forward and disclose their conduct immediately, before we learn about their criminal conduct from U.S. taxpayers."

"Today's Indictment is the latest prosecution in this District against foreign bankers and professionals who enabled and assisted wealthy Americans conceal their assets offshore," said Jeffrey H. Sloman, Acting U.S. Attorney for the Southern District of Florida. "As more Americans voluntarily come into compliance and face their financial obligations, more leads are being developed and new investigations are initiated. American taxpayers who sought to avoid taxes by hiding their assets in Swiss accounts are on notice that this investigation continues."

"This is another step in our ongoing effort to pursue hidden offshore assets -- no matter where they are located," said IRS Commissioner Doug Shulman. "We're in the early stages of our work to crack down on offshore tax evasion. Through our efforts, we are gaining access to more and more information on institutions and individuals involved in offshore tax evasion, and you can expect us to use all of our enforcement tools to stop this abuse. For people with hidden offshore assets, they have an opportunity to get right with the government. Time is quickly running out, and people should take advantage of our voluntary disclosure process before special provisions expire September 23."

Acting Assistant Attorney General DiCicco and Acting U.S. Attorney Sloman commended the investigative efforts of the IRS agents involved in this case. The prosecution is being handled by Senior Litigation Counsel Kevin M. Downing and Trial Attorney Michael P. Ben'Ary of the Tax Division, and Assistant U.S. Attorney Jeffrey A. Neiman.

U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax return. Additionally, American citizens must file a Report of Foreign Bank and Financial Accounts, or F-Bar, with the U.S. Treasury, disclosing any financial account in a foreign country with assets in excess of $10,000 for which they have a financial interest in or signature authority, or other authority over.

Source: US Dept. of Justice

Five members of an extended family were sentenced to federal prison late yesterday, all receiving lengthy sentences for their roles in an international sex trafficking ring that lured young Guatemalan women and girls to the Los Angeles area and forced them into prostitution, the Justice Department announced.

The five defendants sentenced today - four Guatemalan nationals and one Mexican national - were found guilty in February of various charges, including conspiracy; sex trafficking by force, fraud or coercion; and importation of aliens for purposes of prostitution. Gladys Vasquez Valenzuela, 38, was sentenced to 40 years in prison; Gabriel Mendez, the Mexican national, 35, was sentenced to 35 years; and the other three defendants, Mirna Jeanneth Vasquez Valenzuela, aka Miriam, 28, Maria de los Angeles Vicente, aka Angela, 30, and Maribel Rodriquez Vasquez, 29, were each sentenced to 30 years in prison.

Evidence showed that the defendants intimidated and controlled their victims by threatening to beat them and kill their loved ones in Guatemala if they tried to escape. Some defendants also used witch doctors to threaten the girls that a curse would be placed on them and their families if they tried to escape. At least two of the defendants further restrained the victims by locking them in at night and blocking windows and doors. The defendants also used manipulation of debts, verbal abuse and psychological manipulation to reinforce their control over the victims. The scheme included strict controls over the victims' work schedules and ominous comments about consequences that befell the families of other victims who attempted to escape.

The defendants collected the profits generated by the acts of prostitution the victims were compelled to perform, and maintained control over the proceeds, keeping tens of thousands of dollars while the victims received next to nothing.

"The young girls and women in this case were victimized and exploited in a horrific way, and these sentences should send a stern message to all sex traffickers that they cannot escape justice for such egregious human rights violations," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "Attorneys in the Civil Rights Division will continue to work with U.S. Attorney's Offices across the nation to stamp out this vicious and intolerable crime, and to seek significant prison sentences for anyone engaging in these despicable acts."

"In this disturbing case, the defendants lured young, uneducated and impoverished women and girls to the United States, where they were forced to work as prostitutes in terrifying conditions," said U.S. Attorney Thomas P. O'Brien for the Central District of California. "There were at least 10 victims who were forced into becoming prostitutes under a variety of threats, as well as actual physical attacks that included rapes."

"These sentences are a stern reminder about the consequences facing those involved in the unconscionable practice of human trafficking," said Robert Schoch, special agent in charge for the U.S. Immigration and Customs Enforcement (ICE) Office of Investigations in Los Angeles. "While we can't erase the suffering these young women experienced, by aggressively investigating and prosecuting these cases, ICE and the other members of the Los Angeles Human Trafficking Task Force are ensuring that those involved in schemes like this pay a significant price for the pain they cause."

Four additional defendants have pleaded guilty for their role in the scheme. Flor Morales Sanchez was sentenced in May to two years in prison; Pablo Bonifacio was sentenced last November to 33 months in prison; Albertina Vasquez Valenzeula, also known as Cristina, was sentenced in February to 33 months in prison. The final defendant, Luis Vicente Vasquez, is scheduled to be sentenced on Thursday.

Source: US Dept. of Justice

The Department of Justice's Office of Justice Programs (OJP) today announced more than $24 million in awards to enforce state and local underage drinking laws nationwide. The awards are made through the Enforcing Underage Drinking Laws (EUDL) program, which supports law enforcement, public education, and coalition building activities to address underage access to and consumption of alcohol.

"We need to aggressively get the message out to our youth about the dangers of underage drinking," said Laurie O. Robinson, Acting Assistant Attorney General for the Office of Justice Programs. "We are committed to assisting state and local authorities in their efforts to enforce underage drinking laws that protect our youth."

The EUDL program, administered by OJP's Office of Juvenile Justice and Delinquency Prevention (OJJDP), is the only federal initiative directed exclusively toward preventing underage drinking. The program is an annual initiative consisting of block grants and discretionary awards.

Each state, territory, and the District of Columbia received $360,000 in the form of block grants. The awards support a wide range of activities, including a strong emphasis on compliance checks of retail alcohol outlets to reduce sales to minors, crackdowns on false identification, and programs to deter older youth or adults from providing alcohol to minors. OJJDP also awarded discretionary grants totaling $1.9 million to Missouri and Wyoming to prevent alcohol access and consumption by underage service personnel in the U.S. Air Force and $2 million to the Pacific Institute for Research and Evaluation to provide training, technical assistance, and information sharing to EUDL grantees and local agencies focusing on enforcement strategies.

OJJDP is hosting the 11th annual National EUDL Leadership conference, "Beyond Boundaries: Timely Trends and Technology," in Dallas, Texas, today and Friday. More than 1,300 law enforcement personnel, state EUDL coordinators, judges, public and military officials, community members and youth are attending the conference to be informed of current trends in underage drinking prevention and enforcement. Attendees will also expand their knowledge on cutting-edge technology, evaluation, and tools to enhance Federal, state and local efforts to combat underage drinking.

The Office of Justice Programs, headed by Acting Assistant Attorney General

Laurie O. Robinson, provides federal leadership in developing the nation's capacity to prevent and control crime, administer justice, and assist victims. OJP has five component bureaus: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; and the Office for Victims of Crime. Additionally, OJP has two program offices: the Community Capacity Development Office, which incorporates the Weed and Seed strategy, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART). More information can be found at http://www.ojp.gov.

SOURCE Office of Justice Programs - US Department of Justice

Diego Montoya Sanchez, 48, one of the leaders of the Norte Valle Colombian drug cartel and a former FBI Top Ten Fugitive, pleaded guilty today in Miami to drug trafficking, murder and racketeering charges, the Justice Department announced.

The pleas were announced by Acting U. S. Attorney Jeffrey H. Sloman for the Southern District of Florida, Acting U.S. Attorney Lev L. Dassin for the Southern District of New York, Assistant Attorney General Lanny A. Breuer of the Criminal Division, FBI Executive Assistant Director Thomas J. Harrington and Acting Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration.

Montoya Sanchez appeared before U.S. District Judge Cecilia M. Altonaga in Miami, where he pleaded guilty in two pending federal cases. In the first case, which was indicted in the Southern District of Florida by the U.S. Attorney's Office, Montoya pleaded guilty to one count of conspiracy to import more than five kilograms of cocaine into the United States and one count of obstruction of justice by murder.

In the second case, which was indicted in the District of Columbia jointly by the U.S. Attorney's Office for the Southern District of New York (SDNY) and the Criminal Division's Narcotic and Dangerous Drug Section (NDDS), Montoya Sanchez pleaded guilty to one count of conspiracy to engage in a pattern of racketeering activity. The SDNY/NDDS indictment was transferred to the Southern District of Florida for the guilty plea.

Following the decline of the Cali Cartel in the mid-1990s, the Norte Valle Cartel emerged to become Colombia's most prolific cocaine trafficking cartel. Based upon FBI estimates, at its peak the Norte Valle Cartel was responsible for 60 percent of the cocaine exported from Colombia to the United States. According to the SDNY/NDDS indictment, between 1990 and 2004, the Norte Valle Cartel exported more than 1.2 million pounds, or 500 metric tons, of cocaine worth more than $10 billion from Colombia to the United States.

According to the statement of facts submitted in conjunction with today's hearing, Montoya Sanchez was a high-level Colombian drug trafficker for more than two decades. In the mid-1980s, Montoya Sanchez ran cocaine laboratories that served many significant traffickers. In the late 1980s, Montoya Sanchez expanded his organization's operations into smuggling plane loads of cocaine from Colombia to Mexico. According to the statement of facts, by the early 1990s, Montoya Sanchez had switched to maritime smuggling. During the course of the next 15 years, Montoya Sanchez's organization routinely smuggled cocaine loads between 1,000 and 6,000 kilos at a time using go-fast boats and fishing boats, among other methods.

By the late 1990s, Montoya Sanchez and Wilber Varela emerged to become the Norte Valle Cartel's two leading kingpins. Mounting tensions between the Montoya and Varela organizations led to a two-year war between the organizations in which each targeted the other's members for murder. The Montoya-Varela war, which lasted from fall 2003 until fall 2005, resulted in hundreds of deaths, including those of innocent civilians.

At today's hearing, Montoya Sanchez admitted that his organization's practices included using violence and murder against people his organization feared were cooperating with law enforcement. Montoya Sanchez specifically admitted to the August 2003 murder of a one-time organization member who was believed to have been cooperating with authorities.

In May 2004, the FBI added Montoya Sanchez to its list of ten most wanted fugitives. On Sept. 10, 2007, Colombian authorities mounted an operation on a believed Montoya hide-out at a ranch in a rural area outside of Zarzal, Valle del Cauca, Colombia, and captured Montoya Sanchez hiding in a creek-bed approximately 700 yards from the ranch. Montoya Sanchez was extradited from Colombia to Miami on Dec. 12, 2008.

Jeffrey H. Sloman, Acting U.S. Attorney for the Southern District of Florida, stated, "From the prosecution and conviction of the leaders of the Cali Cartel, to the conviction of Ze'ev Rosenstein and an Israel-based Ecstasy network, to today's dismantling of the Norte Valle Cartel, the Southern District of Florida has had a long and successful history in the war on drugs. We will continue to focus our energy, and the expertise of our prosecutors, to help our law enforcement partners stem the tide of drugs flooding our streets and poisoning our society."

"Diego Montoya Sanchez was the leader of a dangerous, violent drug organization," said Thomas J. Harrington, Executive Assistant Director of the FBI. "Outstanding cooperation between Colombia and the United States was key to his capture, the capture of others, and the effective dismantling of the Norte Valle Cartel. The FBI and its law enforcement partners, both here and overseas, will continue to work together to eliminate other international organized crime threats."

"The prosecution of Montoya Sanchez is a milestone in the efforts to dismantle the Norte Valle Cartel, one of the world's most powerful and dangerous drug-trafficking cartels," said Acting U.S. Attorney Lev L. Dassin for the Southern District of New York. "Montoya Sanchez's arrest and extradition marked the end of his long campaign of violence and corruption. We are grateful to our partners at the DEA and in the Colombian government for their tireless work in this investigation."

"Montoya Sanchez's path to the top of the Norte Valle Cartel was marked by decades of extreme violence. That path has now ended in a prison cell, where the man who personally helped direct multi-ton shipments of addictive and destructive narcotics into American cities and towns will be held for his crimes," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "This conviction is a major victory in the joint effort by Colombia and the United States to disrupt and dismantle these drug trafficking organizations, made possible through extensive cooperation with our partners in the Southern District of Florida, the Southern District of New York, the DEA and the FBI."

"This notorious leader of the extremely violent Norte Valle Cartel is where he belongs: behind bars for murder, drug trafficking and racketeering," said Acting DEA Administrator Michele M. Leonhart. "Due to the skilled and brave work by the men and women of DEA and the Colombian National Police, justice has been served for the many victims of his cartel's extreme violence and the tons of cocaine that ended up on American streets. Now he is in prison, no longer able to use his power to destroy others or benefit from his ill-gotten gains."

Montoya Sanchez is the fourth member of his family to be convicted as part of the case out of the Southern District of Florida. In January 2009, Montoya Sanchez's brother, Eugenio Montoya Sanchez, pleaded guilty to one count of conspiracy to import more than five kilograms of cocaine into the United States and one count of obstruction of justice by murder and was subsequently sentenced to 30 years in prison. In November 2005, Montoya Sanchez's brother, Juan Carlos Montoya Sanchez, and his cousin, Carlos Felipe Toro Sanchez, both pleaded guilty to one count of conspiracy to import more than five kilograms of cocaine into the United States. They were sentenced to terms of 262 and 235 months in prison, respectively.

According to in-court statements during the hearing, Diego Montoya Sanchez agreed to serve a 45-year prison term for the crimes outlined in the court documents. Sentencing has been scheduled for Oct. 21, 2009, at 8:30 a.m. before Judge Altonaga.

The Southern District of Florida indictment is being prosecuted by the U.S. Attorney's Office and was investigated by the FBI. The SDNY/NDDS indictment was the result of a multi-district investigation and is being prosecuted jointly by SDNY and NDDS, and was investigated by the DEA. The Criminal Division's Office of International Affairs and NDDS Judicial Attaches in Bogota, Colombia provided significant assistance in both cases. U.S. law enforcement received invaluable assistance in its prosecution of Diego Montoya Sanchez from the Government of Colombia, the Colombian National Police and the Colombian Army.

Source: U.S. Dept. of Justice

The U.S. Department of Labor has obtained a consent judgment and order requiring the former president of Chicago-based AA Capital Partners Inc. to restore $50 million in losses to five Michigan pension funds as restitution for misuse of the plans' assets to benefit the investment firm and himself. The judgment also bars defendant John Orecchio from serving in a fiduciary or service provider capacity to any employee benefit plan governed by the Employee Retirement Income Security Act (ERISA).

"Fiduciaries have a legal obligation to ensure plan assets are used only to pay benefits and reasonable expenses of a plan. Those who violate that trust will be held accountable for their actions," said Secretary of Labor Hilda L. Solis.

Although Orecchio has submitted proof of current inability to make restitution, the consent judgment requires him to submit annual financial statements to the Labor Department and to pay off the judgment as funds are received by him.

The Labor Department filed a lawsuit on April 10, 2008 against AA Capital Partners, its co-owner and president Orecchio, chief financial officer Mary Elizabeth Stevens, and affiliate AA Capital Liquidity Management, LLC for allegedly misusing plan assets and charging the plans excessive fees on investments. In July 2008, the department filed an amended complaint adding an additional count which alleged that plan assets were imprudently invested in a limited partnership created to invest in Xyience Inc., a Nevada corporation which manufactures and sells food, vitamins and beverages, even though a prudent investigation had not been conducted with respect to this investment strategy.

The pension plans that suffered losses as a result of Orecchio's actions covered more than 60,000 participants of the Carpenters Pension Trust Fund of Detroit and Vicinity, Operating Engineers Local No. 324 Pension Fund, Michigan Regional Council of Carpenters Annuity Fund, Millwrights' Local No. 1102 Supplemental Pension Fund, and Michigan Teamsters Joint Council #43 Pension Fund. As of April 30, 2006, the pension plans had total assets of approximately $3.1 billion.

At various times from 2002 to 2006, the defendants allegedly improperly used $25.9 million of the plans' assets to pay for, among other things, the operating expenses of the firm, renovations to a horse farm, and a strip club owned by Orecchio. In addition, they caused the plans to pay unauthorized fees to AA Capital.

AA Capital is a registered investment advisory firm to employee benefit plans, including ERISA-covered benefit plans. The firm created AA Capital Liquidity Management as the general partner for a fund that invested in real estate loans and entities that developed real property. In 2006, AA Capital was placed in the hands of a court-appointed receiver.

The Chicago Regional Office of the Labor Department's Employee Benefits Security Administration (EBSA) investigated this case. The suit was filed in federal district court in Chicago. Employers and workers can contact the Chicago office at 312-353-0900 or EBSA's toll-free number, 866-444-3272, for help with problems relating to private-sector health and pension plans.

Source: U.S. Department of Labor