Walter Ralph Mabry Pleads Guilty to Taking Kickbacks While Boss of the Michigan Carpenters Union

Walter Ralph Mabry, the former leader of the 20,000-member Michigan Regional Council of Carpenters union, pleaded guilty today to taking kickbacks in connection with Mabry’s position as head of the union and chairman of the board of trustees of the Carpenters’ Pension Trust Fund, United States Attorney Barbara McQuade announced today.

McQuade was joined in the announcement by FBI Special Agent in Charge Andrew Arena; James Vandenberg, the Special Agent in Charge of the Department of Labor, Office of Investigations-Office of Labor Racketeering and Fraud Investigations; and Paul C. Baumann, Cincinnati Regional Director, Department of Labor Employee Benefits Security Administration.

During a hearing this morning before United States District Judge Arthur Tarnow, Mabry admitted that he accepted between $5,000 and $10,000 in hotel and entertainment expenses from Joseph Roxlyn Jewett and John Orecchio between April 2004 and September 2006. Orecchio was an executive at AA Capital Partners, an investment manager for the Carpenters’ Pension Trust Fund, and Jewett was a consultant hired by AA Capital in connection with a $70 million investment by the pension fund in the construction of a Hard Rock gambling casino in Biloxi, Mississippi. Pursuant to the terms of the parties’ plea agreement, at the time of the sentencing hearing in this case, Judge Tarnow will decide if Mabry also agreed to take $266,000 from Orecchio and Jewett as an additional kickback because of Mabry’s decisions relating to the casino investment by the Carpenters’ Pension Trust Fund. If Judge Tarnow decides that Mabry accepted this additional kickback, then Mabry would face the possibility of a longer prison sentence.

The charges against Mabry were set forth in a criminal information that was unsealed before the plea hearing.

On January 11, 2010, Jewett was convicted in the Eastern District of Michigan of promising to give a $266,000 kickback to Mabry because Mabry caused Orecchio to hire Jewett as a consultant on the gambling casino investment. In a separate case in the United States District Court in the Northern District of Illinois, Orecchio was convicted in February 2010 of embezzling $24 million from the Carpenters’ Pension Trust Fund and other union pension funds.

Based on his guilty plea and felony conviction for taking kickbacks in connection with his fiduciary duties with a union pension plan, Mabry is facing a maximum of three years in prison and a fine of up to $250,000.

“We will pursue corruption whether it occurs in city hall, public schools, federal agencies, or labor unions,” United States Attorney McQuade said. “When labor leaders abuse their positions for personal gain, they rob the working men and women they were entrusted to represent. We hope these charges will deter others from abusing their positions.”

Andrew Arena, Special Agent in Charge, Federal Bureau of Investigation said, “Embezzling union resources and accepting kickbacks systematically robs union monetary assets and decreases benefits to all members. The FBI will continue to aggressively investigate these cases with our law enforcement partners.”

James Vanderberg, Special Agent in Charge for the Chicago Regional Office of the U.S. Department of Labor, Office of Inspector General, said: “Pension-related kickback schemes orchestrated by union officials to exploit affiliated benefit plans compromise the retirement of hardworking men and women. This office will work aggressively with our law enforcement partners to investigate crimes that undermine the financial well being of all union pension funds.”

Paul C. Baumann, Cincinnati Regional Director, Department of Labor Employee Benefits Security Administration, said, “The Employee Benefits Security Administration is committed to vigorously enforcing the law to ensure that employee benefit plan officials do not engage in secret deals and accept illegal kickbacks which influence their decisions with respect to the benefit plans and jeopardize the retirement security of the participants and beneficiaries.”

The case was investigated by agents of the Federal Bureau of Investigation; the Department of Labor, Office of Inspector General-Office of Labor Racketeering and Fraud Investigations; and the Employee Benefits Security Administration. It is being prosecuted by Assistant United States Attorney David A. Gardey.