Paul S. Peters II headed a union whose members guarded the Baltimore waterfront. Now he’s going be under the supervision of prison guards. On April 30, Peters, formerly president of the Waterfront Guard Association (WGA) Local 1852, was sentenced in Baltimore federal court to 30 months in prison to be followed by three years of supervised release for embezzling funds from his union and two union-sponsored employee benefit plans. He and the local recording secretary, Brian Armentrout, were indicted in February 2009 and pleaded guilty in July. Peters also will have to make $320,000 in restitution. Armentrout has yet to be sentenced.
Court documents show that during January 2002-September 2005, Peters, age 31 when the 18-count indictment was unsealed last March, made at least $380,000 in unauthorized transfers from the Local 1852 general operating account, and its welfare and pension funds. He transferred the money into a separate account from which he made cash withdrawals and wrote checks payable to himself. Peters used the stolen funds for various personal expenses including mortgage payments, home improvements, stock purchases, motor vehicles, and boarding costs for horses. Armentrout, 32, the lesser perpetrator, ripped off the union of an estimated $34,000 during January 2003-June 2004.
The fraud was uncovered by a joint investigation by the U.S. Labor Department’s Office of Labor-Management Standards (OLMS) and Employee Benefits Security Administration (EBSA) following discovery of questionable entries on union financial reports to the department. “The theft of employee benefit assets jeopardized the retirement security of these union workers and their families. Today’s sentencing sends a clear message that stealing plan assets is a serious crime punishable to the full extent of the law,” said Mabel Capolongo, director of EBSA’s Philadelphia Regional Office.