Ex-union fund manager Barclay Grayson is negotiating a deal with federal prosecutors investigating his firm’s loss of more than $200 million, said U.S. Bankruptcy Judge Randall Dunn Mar. 7. Dunn revealed the plea bargaining at a hearing on a personal bankruptcy petition that Grayson filed in Feb. He and his father, Jeffrey L. Grayson, the founder and chairman of Capital Consultants, surrendered the firm to a federal receiver in Sept. 2000 after the Sec. & Exch. Comm’n and the Dep’t of Labor filed suits accusing them of defrauding clients. The hardest-hit clients were union pension funds, including the Laborer’s Int’l Union of N. Am. SEC called the scam the biggest fraud involving a money manager in U.S. history.
The Graysons and others are targets of a federal criminal investigation. Lance Caldwell, Asst. U.S. Atty. in charge of the probe, declined to comment on Barclay Grayson’s dealings with his office. But, Steven Ungar, Barclay Grayson’s criminal defense attorney confirmed the bargaining.
In Feb., John D. Abbott, ex-LIUNA boss in Oregon pled guilty to taking $195,000 in payoffs from Jeffrey Grayson. Abbott’s deal may allow him to serve only 15 months in prison in return for testifying against other union bosses and Jeffrey Grayson.
Because of the bargaining, Dunn noted, Barclay Grayson could assert Fifth Amendment rights in his bankruptcy proceedings, and the lack of his testimony would hamstring the process. Dunn postponed the bankruptcy process for 90 days in hopes the negotiations would be completed. [Oregonian 3/8/01]
Minnesota Consultant Guilty of Fraud
Union consultant, Elliot M. Cohn of Coral Springs, Fla., admitted Feb. 8 to bilking two Minn. unions out of almost $25,000 in fraudulent expenses. The president of a labor negotiating firm pled guilty to mail fraud during a hearing in Minneapolis before U.S. Dis. Judge Michael Davis. Cohn said that from 1996-98, he billed $22,000 in phony airfare expenses to the Minn. Licensed Practical Nurses Ass’n and also manipulated the compensation he drew from the Tech. Employees Ass’n of Minn. He paid $106,476 in restitution to the two unions during the hearing. [Star Trib. (Minneapolis) 3/9/01]
QUOTABLE QUOTE
“Good unions don’t need forced dues and bad unions don’t deserve them.”
– Kirk Shelley, Okla. City Freedom to Work Committee, Letter to the Editor, Tulsa World, Mar. 9, 2001. Addressing the need for Okla. to enact a right-to-work law.