Defendants in Puerto Rican ILA Embezzlement Scheme Plead Guilty

Nobody said that tracking down $10 million or more in missing union funds would be easy.  But someone out there is doing his job – enough to induce a round of guilty pleas in federal court.  Last July, the Department of Justice indicted leaders of an ILA affiliate in Puerto Rico, UTM Local 1740, along with six businessmen and three companies on nearly two dozen counts of embezzlement, money-laundering and maintaining false records.  The indictments had come in the wake of an extensive joint investigation by the U.S. Attorney’s Office, the FBI and the Labor Department’s Office of Labor-Management Standards (OLMS).  UTM Local 1740 President Jorge L. Aponte-Figueroa and another official, Enrique Sosa-Hernandez, were accused of embezzling nearly $2 million from the union, with Aponte-Figueroa allegedly underreporting another $1.5 million in dues collections.  Moreover, the indictment charged Aponte-Figueroa, four other individuals, and Ramallo Brothers, Inc., with conspiring to convert union retirement funds in excess of $8 million to their own personal use. 


Now several of the alleged principals have gone down.  In late April in U.S. District Court for the District of Puerto Rico, Eduardo Sanchez-Bencon and Rafael Garcia-Perez pleaded guilty to their roles in fleecing Local 1740 and its health benefit plan, Plan de Bienestar UTM-PRSSA.  Sanchez-Bencon pled guilty to cashing union dues checks in excess of $900,000 through his personal accounts and through a convenience store in San Juan owned by Guillermo Rivera, who originally pleaded not guilty.  Sanchez-Bencon, who has agreed to cooperate with federal authorities, could serve between 30 and 37 months in prison, and be required to make $46,750 in restitution.  Garcia-Perez pled guilty to six counts of embezzlement and money-laundering of more than $8 million from the Plan through setting up shell companies.  He, like Sanchez-Bencon, has agreed to cooperate in the investigation.  He stands to serve 14 to 17 years in prison, and forfeit $1.5 million.

With the house of cards falling, Rivera suddenly got religion.  On May 3, he pleaded guilty to money laundering for his role in defrauding Local 1740 and Plan de Bienestar UTM-PRSSA; he admitted to routing over $600,000 in embezzled union dues through his convenience store, El Grillon Cash & Carry.  His corporation, RRO, Inc., also is expected to enter a guilty plea.  The prognosis for Jorge Aponte-Figueroa and other union officials doesn’t look good.  (OLMS, 5/16/06).