Indictment: ‘Fake’ stevedoring firm at SJ docks extorted companies with help of union president
By The Star Staff
International Longshoremen’s Association-1740 of Puerto Rico (ILA) President Carlos Sánchez Ortíz and six other people have been indicted by a federal grand jury for violations of the Racketeering Influenced and Corrupt Organization (RICO) Act for allegedly being part of a criminal enterprise since 2005 that was dedicated to extorting cargo owners that arrived at docks 9, 10 and 11 of San Juan with the Virgin Islands as a final destination.
Last Thursday, a federal grand jury in the District of Puerto Rico returned an indictment charging the seven defendants with running a criminal enterprise dedicated to extorting and misleading shipping companies into paying fees for the loading and unloading of cargo at the Port of San Juan -- Piers 9, 10 and 11 -- under the threat of strikes and blockades on the part of union members of ILA-1740 and under false representations that companies had to pay a fee in order to be able to use “union-free labor” for the loading and unloading of cargo, announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. The indictment includes a forfeiture allegation related to the total value of the loss, some $1.18 million, and one residential property, a vehicle, and a boat.
According to the indictment, Pedro Pastrana González and his ex-wife, Iara Clemente Rivera, owners and managers of JCPY Inc., aided by a public employee and Puerto Rico Ports Authority worker, Jorge Batista Maldonado and Carlos Sánchez Ortiz, the ILA-1740 president, are charged with running the fraudulent and extortionate scheme against shipping companies using the aforementioned piers 9. Members of the enterprise took some of the money made from the scheme and concealed it in JCPY and as payments to ILA-1740’s employee benefit plan called Plan de Bienestar UTM-PRSSA (the “Plan”).
Pastrana González, Clemente Rivera, Victor F. Torres Barroso, José A. Fernández Cruz, and Carlos A. Hernández Laguer are also charged in the indictment for their participation in an agreement to take funds and falsify records of the Plan. Pastrana González and Clemente Rivera agreed that Torres Barroso, Fernández Cruz and Hernández Laguer -- members of ILA-1740 who worked in a company that provides stevedoring (cargo handling) services -- would do “chimbos” for Clemente Rivera. “Chimbo” is slang for a person who uses the union card of another individual when working at the docks so that it appears that the union member is working. Because it appeared that the person on the union card (Clemente Rivera) was working, the hours worked were fraudulently counted for Clemente Rivera’s yearly-hour requirement to qualify for plan benefits.
The charges against the seven include RICO conspiracy, extortion; conspiracy to commit mail and wire fraud in violation; conspiracy to violate the Taft-Hartley Act (labor management relations); money laundering; conspiracy to willfully convert funds and falsify records of the plan; and health care fraud.
“These arrests are the result of a comprehensive investigation that now will put a stop to the illegal fees that the defendants were charging the shipping companies at Piers 9, 10 and 11,” Muldrow said. “I want to congratulate the attorneys and agents from all of these agencies who worked diligently to uncover this years-long scheme.”
“Schemes such as the one uncovered and charged in this indictment negatively impact the local economy and stall the economic progress the people of Puerto Rico deserve,” said Joseph González, special agent in charge of the FBI San Juan Field Office. “This scheme was sustained by silence, and I hope the work we’ve done here with our partners serves as a motivation for those with information to speak up.”
“An important part of the U.S. Department of Labor, Office of Inspector General (DOL-OIG) mission is to protect the integrity of labor unions and affiliated benefit plans by investigating those who allegedly abuse their positions of trust for personal financial gain,” stated Jonathan Mellone, special agent-in-charge, New York Region, U.S. Department of Labor, Office of Inspector General.
Megan Underwood, northeastern regional director of the Office of Labor-Management Standards (OLMS), noted that “[t]oday’s indictment includes allegations of corruption against a union president as well as several union members.”
“OLMS will continue to work with its law enforcement partners to hold accountable union officials, who hold positions of trust, as well as others who may seek personal gain through illegal activities, taking advantage of the union and the hardworking rank and file workers who the union represents,” she said.
The investigation was carried out in consultation with attorneys of the Organized Crime and Gang Section of the U.S. Department of Justice.