Brotherhood of Teamsters Local 25 President and
APR 25--Boston, MA .Mark R. Trouville, Special Agent in Charge of the Drug Enforcement Administration in New England; Gordon S. Heddell, Inspector General of the U.S. Department of Labor's Office of Inspector General, Office of Labor Racketeering; James M. Benages, Regional Director of the Employee Benefit Security Administration; Paul F. Evans, Commissioner of the Boston Police Department and United States Attorney Michael J. Sullivan announced today that George W. CASHMAN, age 54 and William H. CARNES, age 59 both of Massachusetts, pled guilty before U.S. District Judge Douglas P. Woodlock to participating in illegal activities involving the International Brotherhood of Teamsters Local 25 ("IBT Local 25") located in Charlestown, Massachusetts.
Particularly, CASHMAN pled guilty to a two-count superseding information charging him with Hobbs Act extortion; and conspiracy to steal and embezzle from an employee benefit program, to file false documents with ERISA, to commit mail fraud and to violate the Taft-Hartley Act. CARNES pled guilty to four counts of a pending indictment charging him with two counts of theft or embezzlement from an employee benefit plan and two counts of mail fraud. As a result of these pleas, both CASHMAN and CARNES will be barred from any further employment by a union or Employee Retirement Income Security Act ("ERISA") fund for a period of thirteen years.
The IBT Local 25 has approximately 9,000 members. Cashman has been IBT Local 25's President since 1992 and CARNES its Vice President for the same time period. CASHMAN and CARNES were also trustees for IBT Local 25's Health Services and Insurance Plan ("IBT Local 25 HSIP") which provides health care benefits to approximately 20,000 active and retired members of IBT Local 25 and their families. CASHMAN was also a trustee of the New England Teamsters and Trucking Industry Pension Fund, which provided retirement benefits to approximately 22,000 retired members of various IBT locals and their families.
CASHMAN and Thomas Disilva, an owner and operator of several trucking companies, pled guilty to helping each other benefit from a scheme to launder the proceeds of a $100,000 extortion payment from representatives of Cardinal Health, an Ohio based pharmaceutical distribution company, through one of DiSilva's companies. According to prosecutors, this payment was made in connection with the settlement of a pension fund liability that Cardinal owed to the New England Teamsters and Trucking Industry Pension Fund after a lengthy strike at Cardinal's Peabody, Massachusetts facility. According to prosecutors, CASHMAN received $20,000 from DiSilva.
CASHMAN also pled guilty to his participation in a scheme to provided health benefits to IBT Local 25 members who were otherwise ineligible for benefits by submitting false documents to the International Brotherhood of Teamsters Local 25's Health Services and Insurance Plan ("IBT Local 25 HSIP"). CASHMAN utilized several trucking companies owned and operated by DiSilva to falsely report that these individuals were employed by DiSilva when, in fact, they were not. DiSilva and one of his companies, Hutchinson Industries, pled guilty to their participation in the scheme last week.
DiSilva, age 63, of 7 Webster Street, Lexington, Massachusetts, pled guilty on April 18, 2003, to his participation in the scheme to provide health benefits to IBT Local 25 members who were otherwise ineligible for benefits and to participating in the scheme to launder an illegal payment from Cardinal Health to CASHMAN. DiSilva is scheduled to be sentenced on July 31, 2003, and faces a maximum sentence of 5 years' incarceration and a $250,000 fine on each of the two counts to which he pled guilty. In conjunction with DiSilva's plea, Hutchinson Industries, Inc., one of several DiSilva-owned companies located a 20 A Street in Burlington, Massachusetts, also pled guilty to all counts of a pending indictment for its role in the health benefits scheme. Hutchinson will pay restitution to IBT Local 25 HSIP and a fine, which the government will recommend, be $100,000.
CARNES pled guilty today to the submission of false documents which caused IBT Local 25 HSIP to pay healthcare claims for two ineligible members of IBT Local 25 and their dependants. CARNES also pled guilty to using the U.S. mail to execute this scheme to defraud IBT Local 25 HSIP and cause it to pay healthcare claims for these ineligible members of IBT Local 25 and their dependants.
"This case is an example that investigations must be followed wherever they lead and that working together and supporting each other's missions brings about successful results," said DEA Special Agent in Charge Mark R. Trouville.
Judge Woodlock scheduled sentencing for CASHMAN for August 7, 2003 and 2:30 pm. CASHMAN faces a maximum sentence of 20 years' incarceration and a $250,000 fine on the extortion charge and a maximum sentence of 5 years' incarceration and $250,000 fine on the conspiracy charge. CARNES is also scheduled to be sentenced on August 7, 2003 at 2:30 pm. He faces a maximum sentence of 5 years in prison and a $250,000 fine on each of the four counts to which he pled guilty.
The investigation is continuing.
Press Contact: Anthony J. Pettigrew,