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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Illinois

Thursday, January 3, 2013

Rockford, Illinois Woman Admits To Embezzling Almost $200,000 From Local Labor Union

ROCKFORD — A Rockford, Ill. woman pleaded guilty today in federal court before U.S. District Judge Frederick J. Kapala to having embezzled almost $200,000 from a local labor union. GRACE RATHKE, 57, Rockford, pleaded guilty to embezzling monies and funds belonging to Local 32 of the Laborers International Union of North America.

Rathke had been indicted on August 2, 2011, and charged with embezzling approximately $200,000 from Local 32. According to the written plea agreement, Rathke admitted that beginning in November of 2004 and continuing until March 2009, she had embezzled over $190,000 from Local 32, including $1,352 on September 25, 2006. In her plea agreement, Rathke admitted that she had been the office manager of Local 32. Members and apprentices of Local 32 had paid their dues and initiation fees to Local 32. As the office manager, Rathke was to enter the amounts received in the records of Local 32 and deposit the funds in the bank account of Local 32. In November of 2004, she began to secretly embezzle dues and fees from Local 32 and to use those monies for her own purposes. In so doing, Rathke failed to credit union members and apprentices with paying their dues and fees.

The guilty plea was announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, and James Vanderberg, Special Agent-In-Charge of the Chicago office of the United States Department of Labor, Office of Inspector General, Office of Fraud and Labor Racketeering Investigations, and Mary Kebisek, District Director of the Chicago office of the United States Department of Labor – Office of Labor-Management Standards.

Sentencing has been set for April 9, 2013, at 2:30 p.m. before Judge Kapala. Rathke faces a maximum sentence of 5 years in prison to be followed by up to 3 years on supervised release. Rathke may also be sentenced to pay a fine of up to $250,000 and must be sentenced to pay restitution of over $190,000 to Local 32.

The government has been represented by Assistants U.S. Attorney John G. McKenzie and Monica V. Mallory.

Plea Agreement

Updated July 27, 2015