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Tammy Smith Pleads Guilty in U.S. Federal Cour

FOR IMMEDIATE RELEASE
Thursday, February 18, 2010

The United States Attorney's Office announced that during a federal court session in Billings on February 17, 2010, before Senior U.S. District Judge Jack D. Shanstrom, TAMMY SMITH, a 40-year-old resident of Billings, pled guilty to embezzlement/theft of labor union assets. Sentencing is set for May 19, 2010. She is currently released on special conditions.

In an Offer of Proof filed by Assistant U.S. Attorney Jessica T. Fehr, the government stated it would have proved at trial the following:

Painters Local 1922 is a labor organization in Billings. It is composed of approximately 31 members, all of whom are employed in occupations related to industrial painting. The local is party to a collective bargaining agreement with four industrial painting contractors located in Montana which are engaged in interstate commerce. The local employed SMITH as the local's office secretary beginning in 2002. Her duties included coming into the office from 1 p.m. to 2 p.m. each weekday to check correspondence, handle phone calls, write checks for the local's expenses, collect members' dues, issue receipts, prepare deposit slips, make bank deposits and prepare the locals LM-3 report, a federal reporting requirement. She was paid $10 per hour for the time she worked.

Local 1922 members pay working dues of 4.5%, which are paid directly via payroll deduction. Members also pay monthly dues of $22.75 which are paid directly to the local, either by mail or in person at the union hall. SMITH was the person primarily responsible for collecting the dues and issuing receipts to the members for their payments. The dues were to be collected, receipts issued, and the money deposited into the local's bank accounts. During the course of the investigation it was determined that cash dues payments, accepted by SMITH, were never deposited in the local's bank accounts. A review of SMITH's personal bank accounts for the same period show cash deposits that coincide with missing cash from the local's cash receipts. SMITH was not authorized to keep any of the cash collected as members' dues for her own personal use.

In addition to the missing dues payments, the investigation also uncovered that SMITH was writing checks from the local's bank accounts to herself or to cash. SMITH was not an authorized signatory on any of the labor union's three bank accounts. The questionable checks were reviewed by the president and the business manager of the labor union. Neither individual had any explanation for the majority of the checks written to SMITH or to cash. The president and business manager of the labor union confirmed that SMITH was not authorized to write herself the additional checks. The additional, unauthorized labor union checks corresponded to deposits made to SMITH's personal bank account.

The total amount taken by SMITH from the labor union, without authorization, was $11,175.43.

SMITH faces possible penalties of 5 years in prison, a $10,000 fine and 3 years supervised release.

The investigation was conducted by the Department of Labor.

A copy of the Offer of Proof can be obtained by contacting Sally Frank at (406) 247-4638.

 

 

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