US Attorney for the District of Columbia
Criminal Complaint against Michael Wayne Martin in the
Washington Teachers Union case
April 2, 2003

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UNITED STATES AMERICA v. MICHAEL WAYNE MARTIN, Defendant.

18 U.S.C. § 1956(h) (Conspiracy to Launder Proceeds of an Unlawful Activity)
18 U.S.C. § 2 (Aiding and Abetting and Causing An Act to be Done)

INFORMATION

COUNT ONE
(Conspiracy to Launder Proceeds of au Unlawful Activity)

1. The Washington Teachers' Union ("WTU" or "the union") was a labor organization representing, among other persons, teachers in the District of Columbia Public School system, and was the Washington, D.C. local affiliate of the American Federation of Teachers ("AFT"). WTU received most of its funds from dues collected from the paychecks of its schoolteacher members.

2: WTU was a labor organization under the oversight of the United States Department of Labor ("DOL") and 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.

3. WTU's operations were overseen, or should have been 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 this Information, the persons occupying these offices did not change,

4. WTU President was a full-time, salaried official of WTU. WTU Treasurer was at various times a full-time, salaried official of WTU.

5. WTU President was assisted in his/her job by WTU Executive Assistant, who was at all times a full-time, salaried employee of WTU.

6. 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 WTU President's 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.

7. Defendant MICHAEL MARTIN, WTU Executive Assistant, occasionally styled WTU President's hair and gave WTU President fashion advice.

THE CONSPIRACY

8. From in or about July 199$, the exact date being unknown, through in or about October 2002, within the District of Columbia and elsewhere, defendant MICHAEL MARTIN did unlawfully, willfully, and knowingly conspire, confederate, and agree, together with others known and unknown, to commit offenses deed in Title 18, United States Code, Sections 1956 and 1957, as follows:

a. knowing that the property involved in a financial transaction affecting interstate commerce represented the proceeds of some form of unlawful activity, to conduct and attempt to conduct such a financial transaction which in fact involved the proceeds of specified unlawful activity, to wit, embezzlement of a labor organization's assets, in violation of Title 29; United States Code, Section 501(c), knowing that the transaction was designed. in whole and in part to conceal and disguise the nature, the location, the source, the ownership, and the control of the proceeds of specified unlawful activity,

b. knowingly to engage and attempt to engage in a monetary transaction in criminally derived property from specifed unlawful activity, to wit, embezzlement of a labor organization's assets, in violation of Title 29, United States Code, Section 501(c), of a value greater than $10,000, in violation of Title 18, United States Code, Section 1957.

THE GOAL OF THE CONSPIRACY

MANNER AND MEANS OF THE CONSPIRACY

10. It was part of the conspiracy that WTU President, WTU Treasurer, and WTU Executive Assistant would write checks to defendant MICHAEL MARTIN and others so that the money could be used personally by WTU President and WTU Executive Assistant and be used to pay WTU credit card bills incurred through the purchase of personal goods and services by WTU President, WTU Treasurer, and WTU Executive Assistant.

11. It was further a part of the conspiracy that defendant MICHAEL MARTIN and a "business" partner ("`Business' Partner") opened an account at a federally-insured financial institution in the name of a fictitious business association called "Expressions Unlimited," which was controlled and used by defendant MICHAEL MARTIN, defendant MICHAEL MARTIN's wife (WTU Executive Assistant's daughter), and `Business" Partner, and the signatory for which was `Business" Partner.

13. It was further apart of the conspiracy that WTU President, WTU Treasurer, and WTU Executive Assistant would and did write WTU checks for several thousand dollars at a time, ultimately totaling $483,543.21, to defendant MICHAEL MARTIN in the name of Expressions Unlimited.

15. It was further a part of the conspiracy that defendant MICHAEL MARTEN, aided and abetted by "Business" Partner and others known and unknown, would and did deposit WTU checks into the Expressions Unlimited account and give some or all of the proceeds directly to WTU Executive Assistant and WTU President.

16. It was further apart of the conspiracy that defendant MICHAEL MARTIN, aided and abetted by "Business" Partner and others known and unknown, would and did deposit WTU checks into the Expressions Unlimited account and, in tam, withdraw funds from the Expressions Unlimited account to deposit directly into the personal bank account of WTU President.

17. It was further apart of the conspiracy that defendant MICHAEL MARTIN and others known and unknown would and did forge "Business" Partner's signature on Expressions Unlimited checks.

19. It was further a part of the conspiracy that the conspirators sought to conceal and cover up their embezzlement and laundering of criminal proceeds by creating false, fictitious, and fraudulent Expressions Unlimited "invoices" for submission to auditors of WTU retained by AFT.

20. It was further a part of the conspiracy that defendant MICHAEL MARTIN would keep some of the money deposited into the Expressions Unlimited account through his use of a debit bank card drawn on the Expressions Unlimited account, as well as by writing, or causing the writing of, Expressions Unlimited checks, to pay for a variety of personal expenses, including his home mortgage, credit card bills, car notes, vehicle maintenance, and home improvement projects.

21. It was further a part of the conspiracy that WTU President, WTU Treasurer, and WTU Executive Assistant embezzled and stole more than $1 million in WTU's assets by obtaining cash withdrawn unlawfully from the WTU bank account, writing WTU checks to themselves, and 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.

22. It was further a part of the conspiracy that defendant MICHAEL MARTIN, while being compensated by WTU and WTU President, would and did transport WTU President to engage in spending sprees using WTU funds and credit cards, and would and did make orders of clothing, art, and other items for the President's personal use that were obtained unlawfully by using union funds.

23. It was further a part of the conspiracy that the conspirators caused WTU to pay for repairs and maintenance for vehicles owned personally by defendant MICHAEL MARTIN.

25. It was further a part of the conspiracy that the conspirators would and did create, and plan to create, false and misleading "financial statements," which concealed and sought to conceal the conspirators' conversion of union funds by falsely and fraudulently categorizing hundreds of thousands of dollars of personal expenditures on WTU credit cards, payments on a personal credit card balance of WTU President and his/her sister, and payments to defendant MICHAEL MARTIN, "Business" Partner, and the fictitious "Expressions Unlimited" as legitimate expenditures, describing these unlawful expenditures as, among other things, "Membership Services," payments of "per capita tax" (dues owed by WTU to AFT), and "printing" costs.

26. It was further a part of the conspiracy that WTU President, WTU Treasurer, and WTU Executive Assistant, along with others known and unknown, would and did retain the services of Tax Preparer -- who also prepared the personal tax returns of defendant MICHAEL MARTIN and WTU President, among others -- to assist them in the preparation of Forms LM-2 and "financial statements" that were false and misleading.

PARTIAL LIST OF FINANCIAL TRANSACTIONS UNDERTAKEN IN FURTHERANCE OF THE CONSPIRACY

27. In furtherance of the goal and objects of the conspiracy, defendant MICHAEL MARTIN and his co-conspirators, known and unknown, within the District of Columbia, conducted the following financial transactions, among many others:

(Conspiracy to Launder Proceeds of an Unlawful Activity, in violation of Title 18, United States Code, Section 1956(h), and Aiding and Abetting and Causing An Act to be Done, in violation of Title 18, United States Code, Section 2).

By:
J W. COOPER
ANTHONY M. ALEXIS
ASSISTANT UNITED STATES ATTORNEYS