Labor Union Organizer Sentenced To Prison For Participating In Fraud Schemes
Daniel Rush Sentenced to 37 Months in Prison for Breaching Fiduciary Duty to UFCW and Participating in Money Laundering Scheme
OAKLAND—Daniel Rush was sentenced yesterday afternoon to 37 months in prison for breaching his fiduciary duties to the United Food and Commercial Workers Union (UFCW) and participating in a money laundering scheme, announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge, following Rush’s guilty pleas on June 22, 2017.
Rush pleaded guilty to one count of receiving an illegal payment as a union employee, in violation of 29 U.S.C. § 186(b)(1); one count of honest services wire fraud, in violation of 18 U.S.C. §§ 1343, 1346; and one count of conspiracy to commit structuring and money laundering, in violation of 18 U.S.C. § 371.
According to his plea agreement, between 2010 and 2015, Rush engaged in a series of schemes to enrich himself in violation of federal law and his fiduciary duties:
- In 2010, he conspired with attorney Marc L. TerBeek and others to structure approximately $420,000 in illegal drug proceeds into the banking system. Although the money was a loan from someone in the cannabis industry, Rush deliberately mischaracterized monthly interest payments as consulting fees.
- While serving as the Organizing Coordinator for the unofficial cannabis division at UFCW, Rush gave an employer a corrupted neutrality agreement in exchange for personal loan forgiveness. He also accepted kickbacks from TerBeek in exchange for referring cannabis businesses he encountered in his union role to TerBeek’s law practice.
- Rush abused his position as Executive Treasurer and Board Member at the Instituto de la Raza Laboral (Instituto) in similar fashion by demanding and accepting remuneration from TerBeek in exchange for establishing TerBeek as an approved legal provider for workers’ compensation cases at the Insituto.
- Finally, Rush engaged in corrupt conduct as a Commissioner on the Berkeley Medical Cannabis Commission when he attempted to extort a business that had applied for a dispensary permit. Using TerBeek as an intermediary, Rush communicated that if the applicant did not offer him a salaried job, with benefits, he would take adverse action against its application.
In sentencing Rush, Judge Gilliam commented that “the case reflects large-scale, long-lasting corruption on the defendant’s part.”
In addition to the prison term, the Court also sentenced the Rush to a three-year term of supervised release and ordered him to pay a fine of $7500. Rush’s coconspirator, attorney Marc L. TerBeek pleaded guilty on February 16, 2017, to one count of making an illegal payment to a union employee, in violation of 29 U.S.C. § 186(a) and one count of willfully violating an anti-structuring regulation, in violation of 12 U.S.C. § 1956. Judge Gilliam scheduled TerBeek’s sentencing hearing for November 27, 2017.
The prosecution is the result of an investigation by the FBI and the Internal Revenue Service-Criminal Investigation Division.