Carlos Sánchez-Ortiz, president of ILA union local 1740, was among seven people arrested in San Juan, Puerto Rico, Monday, and indicted on labor racketeering charges.
According to W. Stephen Muldrow, U.S. Attorney for the District of Puerto Rico, the seven are charged 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.
The indictment includes a forfeiture allegation related to the total value of the loss, approximately $1,184,524.26, and one residential property, a vehicle, and a boat.
According to the indictment, Sánchez-Ortiz, Pedro Pastrana-González and his ex-wife, Iara Clemente-Rivera, owners and managers of JCPY, Inc. (JCPY), and Puerto Rico Port Authority worker Jorge Batista-Maldonado are charged with running a fraudulent and extortionate scheme against shipping companies using Piers 9, 10, and 11. 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.
Pastrana-González, Clemente-Rivera, Victor F. Torres-Barroso, José A. Fernández-Cruz, and Carlos A. Hernández-Laguer are charged in the indictment for their participation in an agreement to take funds and falsify records of the benefit plan.
Additionally, the indictment alleges that 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 services (longshore work) — 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.
Count One of the indictment charges a RICO conspiracy in violation of 18 U.S.C. § 1962(d), which subjects the defendants to a term of imprisonment of up to 20 years;
Count Two charges a Hobbs Act extortion conspiracy in violation of 18 U.S.C. § 1951, which subjects the defendants to a term of imprisonment of up to 20 years;
Count Three charges a conspiracy to commit mail and wire fraud in violation of 18 U.S.C. § 1349, which subjects the defendants to a term of imprisonment of up to 20 years;
Count Four charges a conspiracy to violate the Taft-Hartley Act (labor management relations) in violation of 29 U.S.C. § 186, all in violation of 18 U.S.C. § 371, which subjects the defendants to a term of imprisonment of up to 5 years;
Count Five charges a money laundering conspiracy in violation of 18 U.S.C. § 1956(h), which subjects the defendants to a term of imprisonment of up to 20 years;
Count Six charges a conspiracy to willfully convert funds and falsify records of the Plan in violation of 18 U.S.C. § 664 and 18 U.S.C. § 1027, all in violation of 18 U.S.C. § 371, which subjects the defendants to a term of imprisonment of up to 5 years; and
Count Seven charges health care fraud in violation of 18 U.S.C. § 1347, which subjects the defendants to a term of imprisonment of up to 10 years.
The defendants are charged with the following counts:
- Pedro Pastrana-González, Counts 1-7;
- Iara Clemente-Rivera, Counts 1-7;
- Carlos Sánchez-Ortiz, Counts 1-5;
- Jorge Batista-Maldonado, Counts 1-3;
- Victor F. Torres-Barroso, Counts 6 and 7;
- José A. Fernández-Cruz, Counts 6 and 7; and
- Carlos A. Hernández-Laguer, Counts 6 and 7.
The FBI is in charge of the investigation of the alleged labor racketeering scheme, in collaboration with the U.S. Department of Labor—Office of Inspector General, U.S. Department of Labor—Employee Benefits Security Administration, U.S. Department of Labor—Office of Labor-Management Standards, the U.S. Postal Inspection Service. Assistance was also provided by the San Juan Municipal Police, the Carolina Municipal Police, the Puerto Rico Police Bureau, and the Puerto Rico Ports Authority.