William V. Close, ex-trustee of the pension funds of Int’l Bhd. of Teamsters Local 710 and Auto. and Int’l Ass’n of Machinists Local 701 (a.k.a. Auto. Mechanics Union Local 701), both of which are in Chicago, was sentenced May 30 along with pension fund managers Christopher P. Roach and Richard S. Tringale on federal racketeering conspiracy and pension fund kickback charges arising out of hundreds of thousands of dollars in commission kickbacks.
Roach and Tringale previously pled guilty to conspiracy to violate the Racketeer Influenced & Corrupt Organizations Act, and to paying kickbacks to trustees of employee benefit plans. Roach also pled guilty to tax charges stemming from the money laundering and commission kickback scheme. Close, previously pleaded guilty to receiving illegal kickbacks and money laundering. Roach was sentenced to serve three years in prison. Tringale was sentenced to a term of three years and one month in prison. Both were ordered to forfeit to the government over $7.4 million in commissions earned in the scheme. Close was sentenced to a term of one year and elevens months’ imprisonment and ordered to forfeit over $443,000 in illegal kickbacks received in the scheme. The sentences reflected downward departures from the usual sentencing guidelines as a result of the defendants’ cooperation in other investigations and cases. Additionally, Roach was also sentenced on tax charges stemming from his 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.
Asst. U.S. Atty. Jeanne M. Kempthorne told the Court that had the case proceeded to trial, the Government’s evidence would have proven that Roach and Tringale controlled a Detroit-based brokerage firm known as East/West Institutional Servs., Inc. through which they contracted with clearing brokers to pay them commissions generated by investment trades of union pension plan assets. During the period of the conspiracy, from about March 1994 to Aug. 1997, Roach and Tringale made promises and threats to investment advisors that Locals 701 and 710’s 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.
The investigation began as a result of disclosures by Fleet Bank in Boston and led to the charges being filed against the individuals in Chicago. Close new resides in Juno Beach, Fla. Roach and Tringale currently reside in Detroit and Sarasota, Fla. [USAO D. Mass. 5/31/02]