Members of the Independent Review Board. Proposed Charges Against Local 810 Member Armando Ponce and former Local 875 Member Joseph Girlando
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1 TO: FROM: RE: Local 810 Executive Board Members of the Independent Review Board Proposed Charges Against Local 810 Member Armando Ponce and former Local 875 Member Joseph Girlando DATE: February 16, 1999 I. RECOMMENDATION The Independent Review Board (IRB) refers the below report to the Local 810 Executive Board for the purpose of recommending that charges be brought against Armando Ponce ("Ponce"), a Local 810 member and a former business agent with Local 875, and Joseph Girlando ("Girlando"), a former Local 875 member and business agent, for embezzling and conspiring to embezzle $100,000 from the Local 875 Welfare Fund "A" between March 1995 and November 1996.* On November 20, 1998, Ponce and Girlando each pled guilty to one count of conspiracy to embezzle from a union welfare fund in violation of Title 18 U.S.C, Sections 371 and 664. Ponce and Girlando are awaiting sentencing. As detailed below, Ponce and Girlando had been officers of non-ibt Local 6 of the Amalgamated Industrial and Service Workers Union ("Local 6") which merged into IBT Local 875 in approximately May After the merger, Ponce and Girlando became Local 875 business agents and were the administrators of the Local 875 Welfare Fund "A", which had been the Local 6 Welfare Fund. Based upon an IRB recommendation, on November 7, 1995, the * On March 1, 1998, Local 875 merged into Local 810 and Ponce is a current Local 810 member. 1
2 IBT placed Local 875 in trusteeship. Subsequent to the trusteeship, Ponce and Girlando were removed as business agents. Ponce and Girlando used some of the money from the Local 875 Welfare Fund "A" for personal items, including unauthorized salaries and cars. As discussed below, it also appears that Ponce and Girlando conspired to embezzle and embezzled money from the Local 875 Welfare Fund "A" in an attempt to reestablish Local 6 as an independent non-ibt Local after the imposition of the IRB recommended trusteeship. It appears that while IBT members Ponce and Girlando violated Article II, Section 2(a) and Article XIX, Sections 7(b)(1), (2) and (3) of the IBT Constitution by embezzling $100,000 from the Local 875 Welfare Fund "A". II. INVESTIGATIVE FINDINGS A. Armando Ponce Ponce, date of birth January 13, 1933, is currently a member of Local 810 located in New York, New York. (Ex. 4 at 3; Ex. 6) He is employed at the Brand Manufacturing Company in Brooklyn, New York. In or about May 1994, Local 6, located in West New York, New Jersey, merged with IBT Local 875. (Ex. 1; Ex. 4 at 6;Ex. 5; Ex. 7 at 11) During his September 27, 1995, sworn examination, Ponce testified that in the 1980's he was the President of Local 6. Ponce testified that he later became the Vice President of Local 6. (Ex. 4 at 4-5; Ex. 7 at 9) After the merger of Local 6 into IBT Local 875, Ponce became a Local 875 business agent. (Ex. 4 at 6; 2
3 Ex. 5) Ponce was also a Co-Administrator and a Trustee of the Local 875 Welfare Fund "A", which had been the Local 6 Welfare Fund. (Ex. 4 at 31-32) B. Joseph Girlando Girlando, date of birth January 27, 1931, was a member of Local 875 and was issued a withdrawal card from Local 875 on December 28, (Exs. 7 at 3; Ex. 8)^ Local records reflected that Girlando became a member of Local 875 on May 1, (Ex. 7 at 8; Ex. 8) During his September 27, 1995, sworn examination, Girlando testified that beginning in about 1983 or 1984 he was a business agent with IBT Local 11 in Clifton, New Jersey, for four years. (Ex. 7 at 4-5) Girlando stated that in 1989 he became a member and Vice President of Local 6. Girlando testified that he later became the President of Local 6. (Ex. 7 at 7-8) After Local 6 merged with IBT Local 875, Girlando became a Local 875 business agent. (Ex. 7 at 46 and Ex. 5) Girlando testified that after the merger, he was Co-Administrator and a Trustee of the Local 875 Welfare Fund "A". (Ex. 7 at 69) C. IRB Recommended Trusteeship On August 17, 1995, the Chief Investigator's office conducted a books and records examination at Local 875. Based upon an IRB recommendation, on November 7, 1995, the IBT placed Local ^ Article XIX, Section (l)(g) of the IBT Constitution provides that charges may be preferred against a member who has been issued a withdrawal card. 3
4 875 in trusteeship. (Ex. 11) One of the reasons for the imposition of the trusteeship was that the Local 875 Executive Board failed to give the Local 875 membership prior notice of the affiliation of Local 6 with Local 875 and never advised the membership of the liabilities which totalled approximately $202,000 that Local 875 incurred as a result of the affiliation. (Ex. 11 at 16) D. Ponce's and Girlando's Embezzlement from the Local 875 Welfare Fund "A" On March 6, 1998, a federal grand jury in the District of New Jersey returned a two count indictment against Ponce and Girlando. (Ex. 9) The indictment alleged that in or about May 1994, IBT Local 875 and Local 6 merged and the Local 6 members became members of Local 875. As a result of this merger, the Local 6 Welfare Fund became the Local 875 Welfare Fund "A" and Ponce and Girlando were Local 875 business agents and Co-Administrators of the Local 875 Welfare Fund "A". (Ex. 9) The indictment alleged that from in or about March 1995 through in or about November 1996, Ponce and Girlando conspired to embezzle and embezzled $100,000 of the funds of the Local 875 Welfare Fund "A" in violation of Title 18, United States Code, Sections 371 and 664. (Ex. 9) According to the indictment, after the merger of Local 6 with Local 875, in or about March 1995, Ponce and Girlando withdrew $100,000 from the Local 875 Welfare Fund "A" at Citibank in New York and deposited it into a savings account at the Provident Savings Bank of New Jersey ("Provident"). The indictment further alleged that Ponce and Girlando split the $100,000 into two $50,000 parts which were deposited into two new 4
5 and separate bank accounts at Provident. It was further alleged that once the $100,000 was split and deposited into two accounts, Ponce and Girlando transferred the entire $100,000 into one Provident checking account. It was further alleged that Ponce and Girlando disbursed approximately $22,600 to themselves and others before moving $75,000 into two new checking accounts at the Hudson United Bank in New Jersey ("Hudson"). Thereafter, the indictment alleged that Ponce and Girlando dispensed approximately $70,000 for personal expenses, including unauthorized salaries, leases for two luxury cars, car insurance and other incidentals. (Ex. 9) On November 20, 1998, Ponce appeared before the Honorable Katharine S. Hayden, United States District Judge ("Judge Hayden") for the District of New Jersey and pled guilty to conspiracy to embezzle money. om the Local 875 Welfare Fund "A". During his allocution, Ponce gave the following responses to the following questions: Q. In March of 1995 did you remove $100,000 from the Welfare Fund A account and place it in an account in the Provident Bank in Jersey City, New Jersey? * * * Q. And that same month, November of 1995, were you removed from office as a business representative at Teamster Local 875? Q. Did you thereafter attempt to resurrect Local 6? Q. Did you use part of the $100,000 welfare fund money to provide 5
6 yourself either with income or other items, such as a car and incidental expenses, after you were removed from office? Q. Did you know that the union members were entitled to have this money used exclusively to cover their medical claims and other fund related expenses? (Ex. 10 at 15-17) On November 20, 1998, Girlando also appeared before Judge Hayden and pled guilty to conspiracy to embezzle from the Local 875 Welfare Fund "A". During his allocution, Girlando gave the following responses to the following guestions: Q. Was Local 875 Local Welfare Fund A an entity which accepted benefit funds for the purpose of obtaining medical claims for union members? * * * Q. How about between May of '94 and November of '95 you are described as a trustee? A. I don't believe I was a trustee when Welfare Fund A was set up. Sometime immediately thereafter, some period of time thereafter after it was set up I was a trustee. * * * Q. Were you removed from office in November of 1995 as a business representative at Teamsters Local 875, Mr. Girlando? A. Yes, ma'am. Q. Did you thereafter attempt to resurrect Local 6? Q. Did you use part of the $100,000 welfare fund money to provide yourself with income or other items after your removal from office? A. Yes ma'am. 6
7 Q.... Did you know that the union members were entitled to have this money used for exclusively to cover their medical claims and other fund related expenses? (Ex. 10 at 33,35-36) The offense is proven by Ponce's and Girlando's admissions under oath and against penal interest in connection with their guilty pleas. Moreover, under United States v. International Brotherhood of Teamsters ffriedman and Hughes). 725 F. Supp. 162, (S.D.N.Y. 1989), aff'd. 905 F.2d 610, (2d Cir. 1990), Ponce and Girlando are collaterally estopped from contesting the facts underlying their conviction in a union disciplinary proceeding. As a consequence, Ponce and Girlando's violation of the IBT Constitution is established. III. PROPOSED CHARGES Based upon the foregoing, it is recommended that Ponce and Girlando each be charged as follows: While an IBT member, you conspired to embezzle and embezzled $100,000 from Local 875 Welfare Fund "A" and brought reproach upon the IBT in violation of Article II, Section 2(a) and Article XIX, Sections 7(b) (1), (2) and (3) of the IBT Constitution, to wit: While an IBT member, between March 1995 and November 1996, you conspired to embezzle and embezzled $100,000 from the Local 875 Welfare Fund "A". 7
8 EXHIBITS TO THE REPORT CONCERNING ARMANDO PONCE AND JOSEPH GIRLANDO Ex. 1 Form LM-2 for Local 875 for 1997 Ex. 2 Form LM-2 for Local 810 for 1997 Ex. 3 Blank Ex. 4 Sworn Examination of Armando Ponce dated September 27, 1995 Ex. 5 Form LM-2 for Local 875 for 1994 Ex. 6 Dues Record of Armando Ponce Ex. 7 Sworn Examination of Joseph Girlando dated September 27, 1995 Ex. 8 Dues Record of Joseph Girlando Ex. 9 Indictment in United States v. Armando Ponce and Joseph Girlando Ex. 10 Plea Allocution in United States v. Armando Ponce and Joseph Girlando Ex. 11 IBT Trusteeship Notice and IRB Report regarding Local 875 8
9 Chief Investigator: INDEPENDENT REVIEW BOARD Tip -^ 444 North Capitol Street, NW, Suite 528 Washington, DC / (202) Facsimile (202) Corruption Hotline (800) CALL IRB Board Members: Charles M. Carberry. Esq. Grant Crandall, Esq. 17 Batteiy Place, Suite 331 Crandall, Pyles, Haviland & Turner New York, NY Capitol Street, Suite 300 Charleston, WV Administrator: ^,., ^. Fredenck B. Lacey, Esq. John J. Cronm, Jr. LeBoeuf, Lamb, Greene & MacRae One Riverfront Plaza Newark, NJ August 5, 1999 WilliamH. Webster, Esq. Milbank, Tweed, Hadley & McCloy 1825 Eye Street, NW, Suite 1100 Washington, DC Louis Smith, President IBT Local East 15th Street New York, NY Re: Decision on Charges Against Former Local 810 Member Armando Ponce and Former Local 875 Member Joseph Girlando Dear Mr. Smith: The Independent Review Board has reviewed your June 3, 1999, decision and your July 19, 1999, clarifying decision in the abovereferenced matter, and finds the decision to be not inadequate. Very truly yours, Members of Independent Review Board By: cc: Patrick J. Szymanski, Esq. Pursuant to the Consent Order of the United States District Court, S.D.N.Y. United States -v- International Brotherhood of Teamsters 88 CIV 4486 (DNE)
10 10 EAST 15th STREET NEWYORK.N.Y (212) VIA CERITIED MAIL Z RETURN RECEIPT REQUESTED John J. Cronin, Jr. Administrator Independent Review Board 444 N. Capitol Street, N.W. Suite 528 Washington, DC July 19, 1999 Re: Decision Concerning Joseph Girlando and Armando Ponce Dear Mr. Cronin: I am writing in response to your July 14, 1999 letter regarding Local 810's trial of Joseph Girlando and Armando Ponce. This hereby clarifies that the Local 810 Executive Board decision permanently bars Brothers Girlando and Ponce from holding any positions with the International Brotherhood of Teamsters or any IBT-affiliated entity, including any IBT-affiliated benefit fund, and also bars them from employment, consulting or other work with the IBT or any IBT-affiliated entity. In addition, Brother Girlando and Ponce shall be advised, through a courtesy copy of this letter, that any appeal of Local 810's decision should be made to the Independent Review Board, and not the Joint Council No. 16, within 15 calendar days of receipt of this letter. Should you] have any questions, please feel free to contact me. LS:dr cc: Joseph Girlando, Certified Mail, RRR Armando Ponce, Certified Mail, RRR President
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