Washington, D.C. - United States Attorney Roscoe C. Howard, Jr., Van A. Harp, Assistant Director in Charge of the FBI's Washington Field Office, Michael Cahir, District Director, Department of Labor (DOL), Office of Labor-Management Standards, Gregory R. Szczeszek, Special Agent in Charge, Internal Revenue Service, Criminal Investigation, and District of Columbia Inspector General Charles Maddox jointly announced that Leroy Holmes, age 52, of Upper Marlboro, Maryland, pleaded guilty today before United States District Judge Richard J. Leon to conspiracy to launder proceeds of crime in connection with his role in stealing over $1 million in Washington Teachers' Union (WTU) funds. In addition, Holmes admitted that his tax returns for 1999 through 2001 were false and misleading due to his participation in the WTU conspiracy and agreed to file amended tax returns for those years. Holmes faces a maximum sentence of 20 years in prison and a $500,000 fine. A status hearing date has been set for April 15, 2003.

According to the government's evidence, WTU is the collective bargaining unit for teachers employed by and retired from the District of Columbia Public Schools. Holmes, formerly employed by the WTU as the driver for its president, admitted that WTU's president, executive assistant, and treasurer paid him an annual salary exceeded only by WTU's president in connection with his role in the conspiracy. As part of the embezzlement scheme, WTU's president, executive assistant, and treasurer made unauthorized, personal purchases of luxury goods and services and other items on WTU credit cards. In addition, they caused WTU to pay for personal charges on WTU's president's personal credit card. From approximately December 1997 through September 2002, WTU's president, treasurer, and executive assistant wrote more than $1 million (in addition to the credit card charges) in checks to Holmes, who would cash the checks at WTU's bank, keep a portion for himself, and return the remainder of the money to the executive assistant, who used the cash for various purposes. In addition, Holmes would sometimes cash the checks and deposit some or all of the proceeds into the WTU president's personal bank account for use in paying personal charges on WTU credit cards and making it appear that the WTU president was using personal funds to pay these bills. In this manner, the conspirators concealed the unlawful source of the money. Holmes further admitted that it was part of the conspiracy for the conspirators not to disclose Holmes's existence, or the checks written to him, on financial statements filed with DOL and otherwise to file false and misleading financial reports with the government.

The investigation into the embezzlement of WTU union funds continues.

In announcing today's guilty plea, U.S. Attorney Howard, Assistant Director Harp, District Director Cahir, Special Agent in Charge Szczeszek, and Inspector General Maddox commended the investigative work of FBI Special Agents Katherine L. Andrews and Julie S. Lenkart, DOL Senior Investigator Mark Wheeler, and IRS Special Agents Anthony Brooks and Sarah Kull, as well as numerous other federal and local law enforcement agents who have assisted in this ongoing investigation. In addition, they commended Assistant U.S. Attorneys James W. Cooper and Anthony M. Alexis, the prosecutors handling the case.