According to the Houston Chronicle:
Federal prosecutors have asked fraud investigators from the Labor Department and Postal Service to examine allegations that a former postal union official in Houston embezzled union funds.
Ed Gallagher, deputy criminal chief for major offenders of the U.S. Attorney’s Office in Houston, said he asked the two inspectors general to investigate whether the details laid out in a lawsuit recently filed by the American Postal Workers Union could be criminal violations.
The union accuses its former regional coordinator, Frankie Sanders, of submitting thousands of dollars worth of receipts for non- existent hotel stays, including one in New Orleans that at the time was closed because of Hurricane Katrina damage.
“The lawsuit is not politically motivated, the lawsuit speaks for itself, and we trust the court system to do the right thing,” said Terry Stapleton, secretary-treasurer of the American Postal Workers Union in Washington, D.C.
[PR note:Sanders replaced Stapleton as APWU Regional Coordinator for The Southern Region]
Some of the allegations laid out in the lawsuit filed in US District Court on February 9, 2009
The American Postal Workers Union, AFL-CIO (APWU) brings this action against Defendant Frankie Sanders to redress the Defendant’s embezzlement of union funds. Sanders embezzled union funds by conducting the affairs of the APWU through a pattern of racketeering activity, tortiously converting union funds to his personal use, engaging in tortious deceit and fraud, and breaching contracts he had with the APWU.
Defendant was an employee and officer of the APWU from November 9, 1992 until October 6, 2006. From November 9, 1992 until February 4, 2004, Defendant held the office of National Business Agent. From February 4, 2004 to October 6, 2006, Defendant held the office of Regional Coordinator for the Southern Region.
Through a pattern of activity which began in or about June 2003, Defendant defrauded the APWU of $13,145.80 by submitting to the APWU twenty-two (22) fraudulent and spurious hotel invoices in order to embezzle funds of the APWU, he converted the $13,145.80 of APWU funds to his personal use, and he breached an agreement to request reimbursement only for travel expenses actually incurred.
Defendant did not incur any expenses at the Hilton Garden Inn New Orleans Airport on any of the dates listed on the twenty (20) fraudulent and spurious hotel invoices referenced in paragraph 11 of this complaint. In fact, nine (9) of the fraudulent and spurious invoices that Defendant submitted to the APWU were for the period between August 28, 2005 and April 16, 2006 when the Hilton Garden Inn New Orleans Airport was closed to the general public due to Hurricane Katrina and damage caused by Hurricane Katrina.
Acting as Trustee of the New Orleans Local, beginning on or about January 17,2006, and continuing until April 5, 2006, Defendant made $50,000.00 in withdrawals from the non-interest bearing account of the New Orleans Local by writing a series of thirteen (13) checks to cash and by making one (1) counter withdrawal.
An undetermined portion of the $50,000.00 of union funds which Defendant took from the non-interest bearing account were stolen by Defendant and converted to his personal use.
As a result of the termination of the suspension of the New Orleans Local and the return of self governance, Defendant ceased to be the Trustee of the Local on March 31, 2006, and as of that date he had no authority to spend union funds which then belonged to the New Orleans Local.
After the termination of the suspension of the New Orleans Local, Defendant made a withdrawal of $6,500.00 from the non-interest bearing account he had set up when he was still Trustee by writing one (1) check to cash.
REQUEST FOR RELIEF
WHEREFORE, Plaintiffs respectfully request that the Court:
a. DECLARE that Defendant
1. Was employed by the APWU and conducted the affairs of the APWU through a pattern of racketeering activity in violation of RICO;
11. Committed common law tortious conversion, deceit and fraud;
111. Breached his agreement to accept payment from the APWU for travel expenses only if actually incurred; and
IV. Breached his agreement to handle the assets and funds of the New Orleans Local for the benefit of the Local;
b. AWARD Plaintiffs appropriate compensatory damages, together with interest, for Defendant’s wrongful acts;
c. AWARD Plaintiffs treble damages for Defendant’s violations of RICO;
d. AWARD Plaintiffs punitive damages to the extent that same are not duplicative of the RICO treble damage award;
e. GRANT Plaintiffs reasonable attorneys’ fees and the costs of this action; and
f. PROVIDE such other relief that is just and equitable.