U.S. Attorney's Office
Eastern District of Michigan
(313) 226-9100
February 24, 2015

Former Elected Union Official Pleads Guilty to Helping to Conceal Extortion Scheme

A former official of the Operating Engineers Local 324, International Union of Operating Engineers, pleaded guilty today to helping to conceal extortion by another union official, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by James Vanderberg, Special Agent in Charge for the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations in Chicago, Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office, and Ian Burg, District Director of the Department of Labor, Office of Labor Management Standards.

David Hart, 42, of East China Township, Michigan, the former elected Financial Secretary and Chief of Staff of Local 324, entered the guilty plea today before U.S. District Judge Bernard A. Friedman.

Hart admitted that between 2003 and 2012, he was aware of an extortion scheme perpetrated by another elected union official, for whom Hart worked. This union official forced union business agents and other employees to each pay more than $5,000 of their salaries into a fund that was to be used to pay for the re-election expenses of the union official. This union official, referred to as “Union Official A” in Hart’s plea agreement, threatened to fire union employees who refused to make weekly payments into the fund. In addition, the union official caused at least two union employees to be fired from their jobs because they complained about the weekly payments. Hart was aware of this extortion scheme by his boss at Operating Engineers Local 324, and Hart acted to conceal the crime by assisting the other union official in transferring money out of the fund and to the union official and others.

Hart has agreed to pay $37,000 in restitution because of his involvement in the scheme. Operating Engineers Local 324 represents more than 18,000 individuals operating construction cranes and other heavy equipment across the State of Michigan.

Based on his guilty plea, Hart is facing a maximum of three years in prison and a fine of up to $250,000.

“Corruption has no place in union leadership,” McQuade said. “Working men and women should expect their elected union leaders to act in their best interests, and not to profit from their positions of leadership.”

“Union officials who actively conceal union based crimes not only violate the law, but also deprive their union members of honest representation. This office will continue to work with our law enforcement partners to combat these types of crime,” stated James Vanderberg, Special Agent in Charge for the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations in Chicago.

“Union officials who criminally abuse their positions of trust to further their own selfish interests harm the very same hard-working people they purport to serve,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “FBI Detroit, in lockstep with its law enforcement partners, will continue to pursue those who corrupt our labor unions and bring these perpetrators to justice.”

The case was investigated by agents of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; the Office of Labor Management Standards; the Employee Benefits Security Administration; the Internal Revenue Service—Criminal Investigations; and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys David A. Gardey and Dawn Ison.

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