Grand Jury Charges Seven Over Fraudulent Extortion Scheme at Port of San Juan
A federal grand jury in Puerto Rico has returned an indictment charging seven individuals with labor racketeering offenses in the Port of San Juan.
The seven defendants stand accused of running a criminal enterprise that extorted and mislad shipping companies into paying fees for the loading and unloading of cargo at the port under the threat of strikes and blockades on the part of union members. The defendents also made 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.
Total losses exceeded $1.1 million.
Pedro Pastrana-González and his ex-wife, Iara Clemente-Rivera, who owned and managed JCPY, Inc., were aided by a public employee and Puerto Rico Port Authority worker, Jorge Batista-Maldonado, and Carlos Sánchez-Ortiz, the president of the union ILA-1740 of the International Longshoremen’s Association. The indictment charges them with running the fraudulent extortion scheme against shipping companies using Piers 9, 10, and 11 at the Port of San Juan. 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 also charged in the indictment for their participation in an agreement to take funds and falsify records of the employee benefit 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 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 Clemente-Rivera was working even though she wasn’t, the hours worked were fraudulently counted for her yearly-hour requirement to qualify for employee benefits.
The charges included in the indictment include a RICO conspiracy, a Hobbs Act extortion conspiracy, conspiracy to commit mail and wire fraud, conspiracy to violate the Taft-Hartley Act related to labor management relations, money laundering, conspiracy to willfully convert funds and falsify record, 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,” said W. Stephen Muldrow, U.S. Attorney for the District of Puerto Rico which is prosecuting the case.
The indictment includes a forfeiture allegation related to the total value of the loss, at approximately $1,184,524.26, and one residential property, a vehicle, and a boat.
“These fraudulent actions resulted in people improperly receiving benefits they were not eligible for, hurting thousands of Puerto Ricans who worked tirelessly to earn those benefits honestly and legally,” said Ali Khawar, Acting Assistant Secretary of Labor, Employee Benefits Security Administration (EBSA). “When anyone commits a crime involving an employee benefit plan, EBSA will make sure they are brought to justice.”
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