US Attorney, Leroy Holmes statement of offense, plea agreeement, February 6, 2003

Defendant, Leroy Holmes, worked at the Washington Teachers' Union Local 6 ("WTU") located at l7l7 K Street, N.W., in the District of Columbia. Defendant was hired first as a part-time employee at the WTU performing tasks such as errands and maintenance and later as the full-time driver for the WTU's president.

WTU was a labor organization within the meaning of the Labor Management Reporting and Disclosure Act of 1959 and, as such, is regulated by the United States Department of Labor ("DOL"). During all relevant times, WTU was required annually to submit reports of its financial condition ("Forms LM-2") to DOL. Forms LM-2 required disclosure of, among other things, disbursements to officers and employees, including, but not limited to, payments of salary and other remuneration, as well as payments to officers and employees for business expenditures. DOL maintained these Forms LM-2 for inspection by union members, who were entitled to rely on the accuracy of the information disclosed.

WTU was an affilliate of the American Federation of Teachers, AFL-CIO ("AFT"). WTU derived its funds from dues paid by its approximately 5,000 members, including teachers and retirees of the District of Columbia Public School system and private sector employees of the National Child Day Care Association, now known as "Nation's Capital Child and Family Development." WTU was the collective bargaining agent for District of Columbia public school teachers and professionals.

WTU was governed by a constitution and by-laws that required WTU's operations, finances, and expenditures to be overseen by an executive board consisting of among other persons, the persons Occupying the offices of WTU President, WTU General Vice-President, and WTU Treasurer. For all periods relevant to the conspiracy described herein, the persons occupying these offices did not change.

WTU President was a full-time, salaried official of WTU. WTU Treasurer was at various times a full-time, salaried official of WTU. WTU President was assisted in his/her job by WTU Executive Assistant, WTU checks were required to be signed by two of the three persons occupying the positions of WTU President, WTU General Vice President, and WTU Treasurer. WTU President also delegated to WTU Executive Assistant authority to affix a stamp of his/her signature to WTU checks. WTU Executive Assistant did, in fact, write many WTU checks, affix WTU President's signature stamp, and obtain WTU Treasurer's actual signature for checks. WTU Treasurer at times signed blank checks.

Commencing sometime in or about December 1997, the exact date being unknown, and ending in or about September 2002, within the District of Columbia and elsewhere, defendant Leroy Holmes joined a conspiracy and scheme to defraud with, among other persons, WTU President, WTU Treasurer, and WTU Executive Assistant, for the purpose of embezzling money from the WTU for their personal gain and, moreover, to conceal and disguise the nature, the location, the source, the ownership, and the control of the proceeds of scheme to defraud. The conspiracy to conceal the source of the proceeds of the scheme to defraud worked, among other ways, as follows: WTU President, WTU Treasurer, and WTU Executive Assistant made more than $1 million in personal, unauthorized, and un-reimbursed expenditures using WTU credit cards to acquire luxury clothing, electronic equipment, season tickets for professional sports events, meals and other entertainment, home furnishings, art, gasoline and repairs for their personal vehicles, and other items. In addition, WTU President used a personal credit card to niake thousands of dollars of personal purchases and caused WTU to pay the bills for these personal purchases. WTU President, WTU Treasurer, and WTU Executive Assistant would write WTU checks for several thousand dollars at a time, ultimately totaling more than $1 million, to defendant, Leroy Holmes. Defendant, Leroy Holmes, would then take the checks and cash them at WTU's bank in District of Columbia and would retain sums for himself and would return the balance of the money in cash to other conspirators, or sometimes would deposit the money in the other conspirators' bank accounts or accounts controlled by the other conspirators, including WTU President. WTU President and other conspirators used the mails and wires to write checks on these proceeds of the scherne to defraud and submit them to WTU and personal credit card companies to make it appear falsely that they were, in fact, reimbursing WTU for personal expenditures or paying personal charges on WTU cards with their own funds.

By way of example, in September 2000 and December 2000, to further the conspiracy and carry out its unlawful purposes, defendant, Leroy Holmes, deposited at least $35,000 into the personal account of WTU President. This amount constituted cash proceeds of two WTU checks that had been made payable to defendant, Leroy Holmes, which he then cashed at WTU's bank, thereby engaging in financial transactions affecting interstate commerce. By depositing these funds, defendant, Leroy Holmes and his co-conspirators concealed the fact that the funds were the proceeds of their embezzlement of union checks. These and other funds similarly deposited, and agreed to be deposited into WTU President's account, were transmitted by interstate mail and wire to pay credit card companies for personal expenditures of WTU President and others.

Defendant, Leroy Holmes, enriched himself through the conspiracy by keeping for himself a portion of the cash that he received from cashing WTU checks. He ultimately was permitted to keep approximately $1,875 per week for himself, resulting in an annual "salary" that within WTU was second only to that of WTU President. In addition, WTU paid over $7,000 towards the purchase of a new Cadillac automobile for defendant Leroy Holmes, paid a portion of the monthly payment for this vehicle, and paid for repairs, maintenance, and insurance for this and other vehicles owned personally by defendant Leroy Holmes. The conspirators further concealed their conspiracy and scheme to defraud by failing to report to DOL the disbursements to defendant, Leroy Holmes, and by failing to identify him at all, on any Form LM-2 signed by WTU President and WTU Treasurer and filed with DOL during the period of the conspiracy.

For the Government:
ROSCOE C. HOWARD, JR.
ATTORNEY FOR THE UNITED STATES IN AND FOR THE DISTRICT OF COLUMBIA

I have read each of the pages constituting this plea agreement, reviewed them with my client, and discussed the provisions of the agreement with my client, fully. These pages accurately and completely sets forth the entire plea agreement, I concur in my client's desire to plead guilty as set forth in this agreement.

U.S. Department of Justice
United States Attorney
District of Columbia
Judiciary Center
555 Fourth St. N.W.
Washington, D.C. 20001

This letter sets forth the full and complete plea offer to your client, Mr. Holmes. This offer is binding only upon the Criminal Division of the United States Attorneys Office for the District of Columbia (sometimes referred to hereinafter as "the United States," "the government," or "this Office") and the Tax Division of the United States Department of justice. This plea offer will expire on January 24, 2003, Upon receipt, the executed letter will itself become the plea agreement. The terms of the offer are as follows:

Charges: Mr. Holmes agrees to waive indictment and to plead guilty to a one-count information charging conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h). It is understood that the guilty plea will be based on a factual admiission of guilt to the offense charged to be made before the Court by Mr, Holmes and will be entered in accordance with Rule 1l(e)(1)(B) of the Federal Rules of Criminal Procedure. Mr. Holmes agrees that the attached "Statement of the Offense" fairly and accurately describes Mr. Holmes's actions and involvement in the conspiracy. It is anticipated that during the Rule 11 plea hearing, Mr. Holmes will adopt and sign the Statement of the Offense as a written proffer of evidence.

1. Potential penalties. assessments, and restitution: Mr. Holmes understands that the maximum sentence that can be imposed is 20 years imprisonment, a fine of $500,000, or a fine of twice the pecuniary gain or loss pursuant to 18 U.S.C. § 3571(d), a $100 special assessment, a 3-year term of supervised release, an order of restitution, and an obligation to pay any applicable interest or penalties on fines or restitution not timely made. Notwithstanding the maximum sentence, Mr. Holmes understands that the sentence to be imposed in this case will be determined in accordance with the guidelines and policies promulgated by the United States Sentencing Guidelines Commission, Guidelines Manual (2001) (hereinafter "Sentencing Guidelines"). Mr. Holmes understands that this sentence, including the applicable sentencing guideline range, will be determined solely by the Court, and the government cannot and does not make any promises, representations or predictions regarding what sentence the Court will impose. Mr. Holmes further understands that if the Court imposes a sentence greater than that provided in the Sentencing Guidelines range as determined by the Court, or which is in any other way unsatisfactory to him, he cannot withdraw his guilty plea

2. Federal Sentencing Guidelines: The parties agree that the following Guideline calculations apply:

§§ 2S1.l(a)(i) & 2B1.1
	(a) Base Offense Level	6
	(b) Specific Offense Characteristics Loss over $1 million	+16
	(c) Conviction under §1956 (§2S1.1(b)(2)(B))	+2
§ 3E1.1
	Acceptance of Responsibility	-3
	TOTAL	21

Your client agrees not to seek any departures or downward adjustments from the Sentencing Guidelines calculation agreed to in this paragraph. In the event that this plea offer is either not accepted or is accepted and subsequently withdrawn, the parties will not be bound by the proposed interpretations of applicable Sentencing Guidelines provisions contained herein.

3. Financial Arrangements: Mr. Holmes agrees that prior to or at the time of the sentencing, he will deliver to the Clerk's Office, United States District Court, a certified check in the amount of $l00.0O, to cover the special assessment, as required in Title 18, United States Code, Section 3013. Mr. Holmes also agrees to provide a full and complete accounting of all assets, real or tangible, held by him or in any other name for his benefit, and, to that end, to submit a standard Form 500 (Financial Statement of Debtor).

4. Cooperation: Mr. Holmes agrees to cooperate completely, candidly, and truthfully in the investigation by this Office and federal, state, and local law enforcement agencies. Specifically, Mr. Holmes agrees:

5. Tax Issues: Mr. Holmes acknowledges that in the course of the criminal conspiracy to which he is pleading guilty, he received income that exceeds that which he reported on his federal tax returns for the years 1999, 2000, and 2001. In exchange for the government's concessions in this agreement, Mr. Holmes agrees that by April 15, 2003, he will file amended tax returns for these tax years. In addition, Mr Holmes acknowledges that in addition to any restitution, fine, or other financial assessment that he may incur in connection with his guilty plea, he will be required to pay any taxes and penalties due and owing due to the filing with the Internal Revenue Service of false, incomplete, or inaccurate returns.

6. Government Concessions: In exchange for his guilty plea, the government agrees not to oppose Mr. Holmes's release pending sentencing, agrees not to oppose a 3-level adjustment for acceptance of responsibility pursuant to Sentencing Guidelines, Section 3E1.1(b), agrees not to seek upward adjustments or departures from the Sentencing Guidelines calculation set forth in Paragraph 2 above, agrees not to oppose Mr. Holmes's voluntary surrender to commence serving any sentence which is imposed, provided that Mr. Holmes continues to show his acceptance of responsibility by: (a) cooperating with the presentence report writer (including answering all material questions truthfully and providing all financial information requested); (b) cooperating fully and truthfully with the court in any proceeding arising from this matter; (c) complying with the other provisions of this agreement; and (d) abiding by the conditions set for his release by the Court. Also, subject to other paragraphs in this agreement, the United States will not bring any additional criminal charges against Mr. Holmes in the United States District Court in the District of Columbia or the Superior Court of the District of Columbia for the fraud and corruption outlined in the information. In addition, the United States will not bring criminal tax charges against Mr. Holmes in connection with income derived from his participation in the criminal conspiracy and receipt of funds from the Washington Teachers' Union. This agreement not to prosecute Mr. Holmes does not extend to federal or local crimes of violence as those terms are defined in 18 U.S.C. §16 and D.C. § 23-1331(4). It is understood that the United States has no evidence, as of the date of this agreement, of any crimes of violence involving Mr. Holmes.

7. Departure Committee: At the time of Mr. Holmes's sentencing, the United States will advise the sentencing judge and the probation office of the full nature, extent, and value of the cooperation provided by Mr. Holmes to the United States, In addition, before sentencing, the United States will inform the Departure Committee of the United States Attorneys Office for the District of Columbia of the full nature, extent and value of the cooperation provided by Mr. Holmes to the United States. If the Departure Committee determines that Mr. Holmes has provided substantial assistance in the investigation or prosecution of another person or entity that has committed any offense, then this Office will file a motion pursuant to § 51(1.1 of the sentencing guidelines. Mr. Holmes understands that the determination of whether he has provided "substantial assistance" is within the sole discretion of the United States Attorney for the District of Columbia. Mr. Holmes further understands that the failure of this Office to file a "substantial assistance" departure motion is not a ground for him to move to withdraw his plea of guilty in this case.

8. Court is not bound: Mr. Holmes understands that the Court is not obligated to follow any recommendation of the government at the tiine of sentencing and that the final decision regarding his bond status or detention will be made by the Court at the time of his plea of guilty. The Court's decision in these regards are not grounds for withdrawal from this agreement.

9. Reservation of Allocution: The United States reserves allocution, including, among other things, the right: to inform the presentence report writer of any relevant facts; to dispute factual inaccuracies in the presentence report and to contest any matters not provided for in this plea agreement; to set forth at sentencing and at any proceedings before the Bureau of Prisons all of its evidence with respect to all of Mr, Holmes's criminal activities, subject to the provisions of the following paragraph.

10. The United States and Mr. Holmes hereby agree that since Mr. Holmes has agreed to cooperate with the United States, information provided by Mr. Holmes shall not be held against him for purposes of calculating his sentence (See Sentencing Guidelines Section lB1.8), and will not otherwise be used against him, except as follows:

11. If in this plea agreement the Government has agreed to recommend or refrain, from recommending to the sentencing judge a particular resolution of any sentencing issue, the Government reserves the right to full allocution in any post-sentence litigation in order to defend the sentencing judge's ultimate decision on such issues.

12. Breach of Agreement: If Mr. Holmes fails to make a complete, truthful, and candid disclosure of information to federal law enforcement officers, government attorneys, and grand juries conducting this investigation, or to the Court, and/or if he commits any further crimes, or attempts to withdraw the plea, the United States will have the right to characterize such conduct as a breach of this plea agreement. If during this investigation or prosecution Mr. Holmes should commit perjury, knowingly give any false statement, commit any act of contempt, or obstruct justice, the United States may prosecute him for these offenses to the fullest extent provided by law. In the event of a breach, (a) the United States will be free from its obligations under the agreement and may take whatever position it believes appropriate as to the sentence and the conditions of Mr. Holmes's release (for example. should your client commit any conduct after the date of this agreement that would form the basis for an increase in your client's offense level or justify an upward departure -- examples of which include but are not limited to obstruction of justice. failure to appear for a court proceeding, criminal conduct while pending sentencing, and false statements to law enforcement agents, the probation officer or Court -- the Government is free under this agreement to seek an increase in the offense level based on that post-agreement conduct); (b) Mr. Holmes will not have the right to withdraw the guilty plea; (c) Mr. Holmes shall be fully subject to criminal prosecution for any other crimes which he has committed or might commit, if any, including perjury and obstruction of justice; and (d) the United States will be free to use against Mr. Holmes, directly and indirectly, in any criminal or civil proceeding any of the information or materials provided by him pursuant to this cooperation agreement. Any such prosecutions of the defendant not time-barred by the applicable statute of limitations on the date of the signing of this agreement may be commenced against the defendant in accordance with this paragraph, notwithstanding the running of the applicable statute of limitations before the commencement of such prosecutions. Mr. Holmes knowingly and voluntarily agrees to waive any and all defenses based on the statute of limitations for any prosecutions commenced pursuant to the provisions of this paragraph.

13. In the event of a dispute as to whether Mr. Holmes has knowingly given materially false, incomplete or misleading information in fulfilling the terms of this cooperation agreement or whether Mr. Holmes has knowingly committed any other material breach of this agreement, and if the United States wants to exercise its rights under this agreement, and if Mr. Holmes so requests, the matter shall be submitted to the Court and shall be determined by the Court in an appropriate proceeding at which Mr. Holmes's disclosures and documents shall be admissible and at which time the United States shall have the burden to establish the same by a preponderance of the evidence.

14. Presence of Counsel: At all briefing and interviewing sessions conducted by investigators and/or attorneys for the government, Mr. Holmes shall be entitled to the presence, advice, and assistance of counsel, unless waived.

15. USAO's Criminal Division and DOJ Tax Division Bound: Mr. Holmes understands that this agreement is binding only upon the Criminal Division of the United States Attorney's Office for the District of Columbia and the Tax Division of the Department of Justice. This agreement does not bind the Civil Division of this Office or any other United States Attorney's Office. Nor does it bind any other state, local, or federal prosecutor. It also does not bar or compromise any civil, civil tax, or administrative claim pending or that may be made against Mr. Holmes.

16. Waiver of Appeal: Mr. Holmes is aware that federal law, specifically is U.S.C. § 3742, affords him the right to appeal his sentence. The defendant is aware that the parties' calculation of the sentencing range under the Sentencing Guidelines is not a promise of the sentence to be imposed on him and is not binding on the Judge. Knowing that, Mr. Holmes waives the right to appeal his sentence or the manner in which it was determined pursuant to 18 U.S.C. § 3742, except to the extent that (a) the Court sentences Mr. Holmes to a period of imprisonment longer than the statutory maximum or (b) the Court departs upward from the applicable Sentencing Guideline range pursuant to the provisions of U.S.S.G. §§ 5K2. Further, defendant reserves his right to make a collateral attack upon his sentence pursuant to 28 U.S.C. § 2255 if new and currently unavailable information becomes known to him. In agreeing to this waiver, Mr. Holmes is aware that his sentence has not yet been determined by the Judge. Realizing the uncertainty in estimating what sentence the Judge will ultimately impose, Mr. Holmes knowingly and willingly waives his right to appeal the sentence, to the extent noted above, in exchange for the concessions made by the United States in this agreement. See In re Sealed Case, 283 F.3d 349,355 (D.C. Cir.), cert. denied, 123 S. Ct. 158 (2002).

17. Complete Agreement: No other agreements, promises, understandings or representations have been made by the parties or their counsel than those contained in writing herein, nor will any such agreements, promises, understandings, or representations be made unless committed to writing and signed by Mr. Holmes, Mr. Holmes's counsel and an Assistant United States Attorney for the District of Columbia.

If the foregoing terms and conditions are satisfactory, Mr. Holmes may indicate his assent by signing the agreement in the space indicated below and returning the original to us once it has been signed by Mr. Holmes and his counsel

By:
JAMES W. COOPER
Assistant United States Attorney
ANTHONY M. ALEXIS
Assistant United States Attorney

I have read this plea agreement and have discussed it with my attorney, Louis Martucci, Esq., Esquire. I fully understand this agreement and agree to it without reservation. I do this voluntarily and of my own free will, intending to be legally bound. No threats have been made to me nor am I under the influence of anything that could impede my ability to understand this agreement fully. I am pleading guilty because I am in fact guilty of the offense(s) identified in paragraph one.

I reaffirm that absolutely no promises, agreements, understandings, or conditions have been made or entered into in connection with my decision to plead guilty except those set forth in this plea agreement. I am satisfied with the legal services provided by my attorney in connection with this plea agreement and matters related to it.

US Department of Justice
ROSCOE C. HOWARD, JR.
United States Attorney for the District of Columbia
Judiciary Center
555 Fourth St. N.W.
Washington. D.C. 20530

FOR IMMEDIATE RELEASE
Thursday, February 6, 2003

For Information Contact Public Affairs
Channing Phillips (202) 514-6933

Washington Teachers' Union chauffeur pleads guilty to conspiracy to launder union funds

Washington, D.C. - United States Attorney Roscoe C. Howard, Jr., Van A. Harp, Assistant Director in Charge of the FBI's Washington Field Office, Michael Cahir, District Director, Department of Labor (DOL), Office of Labor-Management Standards, Gregory Szczeszek, Special Agent in Charge, IRS, Criminal Investigation, and District of Columbia Inspector General Charles Maddox jointly announced that Leroy Holmes, age 52, of Upper Marlboro, Maryland, pleaded guilty today before United States District Judge Richard J. Leon to conspiracy to launder proceeds of crime in connection with his role in stealing over $1 million in Washington Teachers' Union (WTU) funds. In addition, Holmes admitted that his tax returns for 1999 through 2001 were false and misleading due to his participation in the WTU conspiracy and agreed to file amended tax returns for those years. Holmes faces a maximum sentence of 20 years in prison and a $500,000 fine. A status hearing date has been set for April 15, 2003.

According to the government's evidence, WTU is the collective bargaining unit for teachers employed by and retired from the District of Columbia Public Schools. Holmes, formerly employed by the WTU as the driver for its president, admitted that WTU's president, executive assistant, and treasurer paid him an annual salary exceeded only by WTU's president in connection with his role in the conspiracy. As part of the embezzlement scheme, WTU's president, executive assistant, and treasurer made unauthorized, personal purchases of luxury goods and services and other items on WTU credit cards. In addition, they caused WTU to pay for personal charges on WTU's president's personal credit card. From approximately December 1997 through September 2002, WTU's president, treasurer, and executive assistant wrote more than $1 million (in addition to the credit card charges) in checks to Holmes, who would cash the checks at WTU's bank, keep a portion for himself, and return the remainder of the money to the executive assistant, who used the cash for various purposes. In addition, Holmes would sometimes cash the checks and deposit some or all of the proceeds into the WTU president's personal bank account for use in paying personal charges on WTU credit cards and making it appear that the WTU president was using personal funds to pay these bills. In this manner, the conspirators concealed the unlawful source of the money. Holmes further admitted that it was part of the conspiracy for the conspirators not to disclose Holmes's existence, or the checks written to him, on financial statements filed with DOL and otherwise to file false and misleading financial reports with the government.

In announcing today's guilty plea, U.S. Attorney Howard, Assistant Director Harp, District Director Cahir, Special Agent in Charge Szczeszek, and Inspector General Maddox commended the investigative work of FBI Special Agents Katherine L. Andrews and Julie S. Lenkart, DOL Senior Investigator Mark Wheeler, and IRS Special Agents Anthony Brooks and Sarah Kull, as well as numerous other federal and local law enforcement agents who have assisted in this ongoing investigation. In addition, they commended Assistant U.S. Attorneys James W. Cooper and Anthony M. Alexis, the prosecutors handling the case.

US Attorney for the District of Columbia
Statement of offense by Leroy Holmes, former chauffeur for Washington Teachers Union officials; plea agreement by Holmes, and press release on guilty plea
February 6, 2003

STATEMENT OF OFFENSE
United States V. Leroy Holmes, CR-03-032

U.S. Department of Justice
United States Attorney
District of Columbia
Judiciary Center
555 Fourth St. N.W.
Washington, D.C. 20001

US Department of Justice
ROSCOE C. HOWARD, JR.
United States Attorney for the District of Columbia
Judiciary Center
555 Fourth St. N.W.
Washington. D.C. 20530

Washington Teachers' Union chauffeur pleads guilty to conspiracy to launder union funds

US Attorney for the District of Columbia Statement of offense by Leroy Holmes, former chauffeur for Washington Teachers Union officials; plea agreement by Holmes, and press release on guilty plea February 6, 2003

STATEMENT OF OFFENSE United States V. Leroy Holmes, CR-03-032

U.S. Department of Justice United States Attorney District of Columbia Judiciary Center 555 Fourth St. N.W. Washington, D.C. 20001

US Department of Justice ROSCOE C. HOWARD, JR. United States Attorney for the District of Columbia Judiciary Center 555 Fourth St. N.W. Washington. D.C. 20530

Washington Teachers' Union chauffeur pleads guilty to conspiracy to launder union funds

US Attorney for the District of Columbia
Statement of offense by Leroy Holmes, former chauffeur for Washington Teachers Union officials; plea agreement by Holmes, and press release on guilty plea
February 6, 2003

STATEMENT OF OFFENSE
United States V. Leroy Holmes, CR-03-032

U.S. Department of Justice
United States Attorney
District of Columbia
Judiciary Center
555 Fourth St. N.W.
Washington, D.C. 20001

US Department of Justice
ROSCOE C. HOWARD, JR.
United States Attorney for the District of Columbia
Judiciary Center
555 Fourth St. N.W.
Washington. D.C. 20530