Ex-President of Puerto Rican Union Pleads Guilty to Stealing $450k

Puerto Rican flagJose “Chepito” Caraballo-Figueroa ran a sugar workers union. Missing from this arrangement were sugar factories, not to mention a large pile of money. On February 10, Caraballo-Figueroa, former president of Sindicato Obreros Unidos del Sur, or SOUS, pleaded guilty in U.S. District Court for the District of Puerto Rico to embezzling about $450,000 in funds from the Salinas, P.R.-based union. He had been arrested in August 2008 by the FBI and indicted by a grand jury following a three-year federal investigation. This wasn’t his first brush with the law either. Back in 1995, he and his attorney pleaded guilty to tax evasion. A sentencing date for the offenses at hand has not been established. 

SOUS is an unusual union. Founded by Jose Caraballo-Figueroa’s father in 1964, the son took over in 1978. Whether or not this was a product of nepotism is less important how he ran the union for some 30 years. SOUS purportedly represents about 250 sugar refinery workers in Puerto Rico, yet the last processing plant on the island closed in 2000. In December of that year, noted federal authorities, Caraballo began submitting false claims to his union for medical reimbursements, travel expenses and payments for services rendered. Through December 2007 he had taken about $400,000. In addition, the indictment stated, on April 7, 2005 he knowingly and unlawfully converted $49,500 to his own use in the form of a manager’s check.

Puerto Rico once had a thriving sugar industry. Various factors – a diminishing agricultural labor force, inefficient production facilities, excessive irrigation, and, perhaps most importantly, government-imposed sugar quotas – led to plant closures. If the last facility shut down more than a decade ago, then the question arises as to why SOUS even should exist. While the guilty plea doesn’t provide answers, it does send a clear signal that Jose Caraballo-Figueroa’s days of generating illicit income from the union are over.