Two men pled guilty on Dec. 18 in Chicago to federal racketeering conspiracy and pension fund kickback charges arising out of hundreds of thousands of dollars in commission kickbacks paid to two trustees of Chicago-based labor union pension funds.
U.S. Atty. Donald K. Stern in Boston, announced that Christopher P. Roach and Richard S. Tringale pled guilty to a conspiracy that involved paying kickbacks to trustees of employee benefit plans. The racketeering conspiracy charges against Roach and Tringale also include allegations of international money laundering and interstate and foreign travel in aid of racketeering. William V. Close, a former trustee of Int’l Bhd. of Teamsters Local 710 and Auto. Mechanics Local 701’s pension funds, earlier pled guilty to receiving kickbacks and to money laundering.
Prosecutor Jeanne M. Kempthorne told the court that Roach and Tringale controlled a Detroit-based brokerage firm known as East/West Institutional Servs. through which they contracted with clearing brokers to pay them commissions generated by investment trades of union pension plan assets. During the conspiracy period, Mar. 1994 to Aug. 1997, the two made promises and threats to investment advisors that Local 710 and 701 pension fund business would be won or lost depending on whether the investment advisors agreed to funnel commissions through the clearing brokers to East/West.
Roach and Tringale paid hundreds of thousands of dollars in kickbacks to two union pension fund trustees, Close and Robert J. Baker, who died in 1997. Both trustees influenced and voted on the selection of investment advisors to the Local 710 and 701 pension funds. Millions of dollars of commissions were transferred from bank accounts in the U.S. to Cayman Nat’l Bank in the Cayman Islands and then distributed to accounts in various names for the benefit of Baker, Close, Roach, and Tringale. Close then transferred the funds to accounts in England and the Isle of Man. As fiduciaries, pension fund trustees are prohibited by federal law from accepting or soliciting gifts or kickbacks in connection with their actions or decisions with respect to the pension funds. They agreed to the forfeiture of over $7 million in commissions paid to the enterprise.
Roach also pled guilty to having caused his corporation, Christopher Roach, Inc., to under report commission income related to the scheme for tax years 1995 and 1996, in the total amount of over $740,000. [USAO D. Mass., Media Release 12/20/00]