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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIAUNITED STATES OF AMERICA V. BARBARA A. BULLOCK, Defendant. CRIMINAL No.: STATEMENT OF OFFENSESDefendant BARBARA A. BULLOCK ("BULLOCK") was from 1994 until September 2002 the president of the Washington Teachers' Union Local 6 ("WTU"), American Federation of Teachers ("AFT"), AFL-CIO. As president, BULLOCK was WTU's chief executive officer and was responsible for all of the union's affairs. Under its by-laws, WTU's financial affairs were overseen by a three-member Board of Trustees, to which WTU's treasurer was required to make periodic reports of revenues and expenditures. Throughout the period of the scheme to defraud and conspiracy described in the Information, the person occupying the office of WTU Treasurer ("WTU Treasurer") did not change. In addition, WTU's officers, who included BULLOCK, WTU Treasurer, and WTU General Vice President, were members of an Executive Board of WTU, which had responsibility for oversight of WTU's programmatic and financial matters. As president, BULLOCK was a full-time, salaried employee. Beginning in or about 1994, WTU Treasurer was also a full-time WTU employee. In or about July 1997, WTU Treasurer left her/his employment at WTU to become a full-time employee of the Executive Office of the Mayor of the District of Columbia as director of the Office of Labor Relations and Collective Bargaining. In or about 1996, BULLOCK hired Executive Assistant, who was a full-time, salaried employee of WTU. Executive Assistant served at times as WTU office manager and, at times, as legislative representative from WTU to the Government of the District of Columbia. WTU's officers and employees, including, but not limited to, BULLOCK, WTU Treasurer, and Executive Assistant, occupied positions of trust in relation to WTU and its individual members. They, therefore, owed a fiduciary duty to hold the money and property of WTU solely for the benefit of WTU and its members and to manage, invest, and expend the money and property of WTU for official union purposes, and not for the personal benefit of the officers and employees of WTU, their friends, and their relatives. 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"). WTU's activities affected interstate commerce because, among other reasons, certain of its members were employed by the private sector entity National Child Day Care Association ("NCDCA"), now known as Nation's Capital Child and Family Development. In addition to representing the NCDCA employees, WTU was the collective bargaining unit for approximately 5,000 teachers and some retired teachers of the District of Columbia Public School system ("DCPS"). WTU, which was a federal tax-exempt organization, received most of its funds from dues collected from the paychecks of its schoolteacher members, as well as fees collected from the paychecks of other DCPS professional employees who received salary increases and other benefits negotiated by WTU. 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 and the public, who were entitled to rely on the accuracy of the information disclosed. WTU's Forms LM-2 were signed by BULLOCK and WTU Treasurer, both of whom certified that the information set forth on the Forms LM-2 was true, correct, and complete. In addition to the Forms LM-2 required by the Department of Labor, WTU was required every year to file Internal Revenue Service Form 990, a tax return document for tax-exempt organizations. Forms 990 called for, among other information, disclosure of payments to officers and employees, as well as an accounting of the organization's receipts and expenditures of funds for other purposes. Federal law required that filers of Form 990 maintain copies of the completed form for inspection by the public. BULLOCK signed Forms 990 on behalf of WTU. She was assisted in preparing the information included on Form 990 by WTU Treasurer, Executive Assistant, and various persons performing accounting services, who supplied the information that ultimately appeared on the forms. Form 990 required persons signing the form on behalf of the tax-exempt organization to state under penalty of perjury that they believed the information set forth on the return to be true, correct, and complete. WTU maintained a main operating account at Independence Federal Savings Bank in Washington, D.C. ("Independence"). 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. With the knowledge of WTU General Vice President and WTU Treasurer, BULLOCK delegated to Executive Assistant authority to affix a stamp of her signature to WTU checks. Executive Assistant did, in fact, write most WTU checks, affix BULLOCK's signature stamp, and obtain WTU Treasurer's actual signature for checks. WTU Treasurer at times signed blank checks. Despite their duty to protect WTU and its members and to use and expend WTU's funds for the benefit of WTU and not the personal enrichment of themselves and their families and friends, BULLOCK, Executive Assistant, and WTU Treasurer, conspiring with and aided and abetted by others known and unknown, embezzled from the union and stole directly from its individual teacher members well over $2.5 million between January 1995 and September 2002. These offenses took many forms, including:
Because so much of WTU's revenue went to pay for the personal purchases of BULLOCK, Executive Assistant, and WTU Treasurer, WTU was frequently delinquent in meeting its most basic financial obligations. Among the casualties of the theft and embezzlement scheme were rent (causing WTU's landlord to sue WTU three times for non-payment); employee pension payments (which were defaulted on); payroll (which WTU employees were not always certain would be met, although WTU never in fact failed to meet payroll); and per capita tax (dues owed per member to AFT). The SchemeSoon after she became WTU President, BULLOCK began to cause WTU to pay personal charge expenses incurred with Diners Club, a credit card company with which BULLOCK's sister had an account. BULLOCK was an authorized card user and had a Diners Club card number under her sister's account. During this early period, starting at least in 1995, BULLOCK and WTU Treasurer wrote WTU checks directly to Diners Club to pay for BULLOCK's personal charges. Thereafter, WTU officers opened an American Express business account. Initially, BULLOCK, WTU Treasurer, and WTU General Vice President had cards. Almost from the first American Express billing cycle, BULLOCK and WTU Treasurer began to use the American Express cards for personal expenses-and to direct that the bills be paid by WTU. Although WTU Treasurer's use of her/his American Express card for. personal purchases was not as great in terms of dollars spent as BULLOCK' s, both s/he and BULLOCK made extensive early personal use of the American Express cards. Sometime after s/he began her/his employment, Executive Assistant obtained a WTU American Express card as well. Once s/he had a card, Executive Assistant too made extensive personal use of the card. Throughout this period, BULLOCK, Executive Assistant, and WTU Treasurer caused WTU to pay for their personal credit card usage, which over time became increasingly more extravagant. An example of the embezzlement of WTU funds, which occurred over the period described above, is the payment of an American Express bill for $96,459.57 on or about August 21, 2001, by WTU check. These American Express charges included personal, unreimbursed charges of BULLOCK and others. By the end of September 2002, embezzlement from WTU by use of credit cards included the following charges: more than $500,000 for custom-made clothing; approximately $57,000 for a sterling silver set; more than $50,000 for fur coats; tens of thousands of dollars for artwork kept in the officers' homes and the homes of their friends and families; more than $20,000 for personal electronic equipment; more than $100,000 for season tickets to the Washington Wizards and Washington Redskins (along with $4,690 in limousine charges to transport BULLOCK, Executive Assistant, and their personal friends and families to FedEx Field); more than $50,000 in personal catering charges; more than $40,000 for personal dental expenses for Executive Assistant and her/his spouse; and others. BULLOCK, Executive Assistant, WTU Treasurer and others regularly used the United States mails to further and cover up their embezzlement scheme. For example, on or about April 18, 2002, BULLOCK mailed and caused to b-e mailed to the District of Columbia Office of Pay and Retirement instructions to withhold $160.09 per check issued to teachers and others receiving retroactive pay raises, when, as BULLOCK, WTU Treasurer, and Executive Assistant well knew, only $16.09 should have been withheld. Leroy HolmesLeroy Holmes was a WTU employee functioning as BULLOCK's driver and as a WTU receptionist. Although they were required by law to do so, BULLOCK and WTU Treasurer failed to describe Holmes as an employee on Forms LM-2. Holmes's employment became another way to steal the union's money. Beginning sometime in December 1997, Executive Assistant began to write WTU checks to Holmes, which Holmes would cash at WTU's bank. Holmes would then either return to Executive Assistant and give her/him the proceeds (keeping for himself a substantial portion that would amount to approximately $100,000 per year in cash salary) or, less frequently, deposit the proceeds directly into BULLOCK's account. On some occasions, BULLOCK or Executive Assistant would in turn use the funds so obtained to write personal checks to pay portions of the WTU American Express bill or make it appear that BULLOCK was paying for her own Diners Club charges. Over $1 million in WTU checks were cashed by Holmes between December 1997 and September 2002. Michael Martin, Errol Alderman, and Expressions UnlimitedBULLOCK, Executive Assistant, and others caused Executive Assistant's son-in-law, Michael Martin, along with his friend, Errol Alderman, to use Alderman's name to open an account for a fictitious entity called "Expressions Unlimited" at Bank of America in Washington, D.C. In addition to WTU checks written to Expressions Unlimited account, Martin and Alderman together were paid in their personal capacities more than $70,000 from WTU checks prepared by Executive Assistant and signed by BULLOCK and WTU Treasurer, which they deposited or cashed. Martin performed few if any legitimate services for WTU and provided WTU with no goods. Martin did perform personal services for BULLOCK, including styling her hair and wigs and accompanying her on shopping trips for art, clothing, and other items. Alderman had no connection of any kind with WTU, and he provided no goods or services to WTU. Martin and Alderman returned most of the proceeds from these checks to Executive Assistant or deposited them directly into BULLOCK's personal bank account. After the Expressions Unlimited account came into being, WTU wrote checks to "Expressions Unlimited" totaling more than $480,000. In fact, these checks were merely a vehicle to funnel money out of WTU and back to BULLOCK and, to a lesser extent, Executive Assistant. "Expressions Unlimited" performed no services and provided no goods to WTU. Martin and Alderman would deposit or cash these Expressions Unlimited checks and return a portion of the proceeds to Executive Assistant or deposit them directly into BULLOCK's personal bank account. Martin also kept a portion of the money for his personal use. BULLOCK and Executive Assistant would sometimes use funds laundered through Expressions Unlimited to make it appear that they were making personal payments to reimburse WTU for their credit card use. The Dues OverchargeDuring the Summer of 2002, having negotiated with DCPS to obtain a retroactive pay raise for teachers, WTU was entitled to receive a portion of the retroactive pay increase as dues. WTU was responsible for notifying DCPS and the District of Columbia Office of Pay and Retirement what amount to withhold from paychecks. Defendants' previous embezzlements of funds had caused WTU to become seriously delinquent in payment of per capita tax to AFT (and AFT had stated that it would not allow WTU delegates to be seated at its July 2002 convention until the taxes were made more current). Prior to this time, in both financial reports by WTU Treasurer to the Board of Trustees and WTU Executive Board, and in LM-2 and Form 990 filings, BULLOCK, Executive Assistant, WTU Treasurer and others had caused it to appear that substantial sums of union funds were being paid to AFT as per capita tax. To continue and conceal the scheme, BULLOCK, Executive Assistant, and WTU Treasurer sought to devise a way to pay the delinquent per capita tax and ensure that WTU delegates could be seated at the July 2002 AFT convention. WTU Treasurer calculated an amount of a one-time payroll deduction from teachers' paychecks that would permit BULLOCK, Executive Assistant, and WTU Treasurer to pay delinquent per capita tax, steal over $60,000 for themselves, and pay the union's attorney (WTU Treasurer's brother). By letter from BULLOCK, which was drafted by WTU Treasurer, they directed the District of Columbia Office of Pay and Retirement to withhold an amount from each teacher that would raise the total. All told, this scheme netted over $720,000 in stolen funds in June 2002. WTU deposited the District government check containing the dues overcharge -- a check in the amount of $826,842.90 -- on June 14, 2002. Between June 14 and June 20, in addition to using these funds to pay nearly $388,083.42 to AFT, BULLOCK, WTU Treasurer, and Executive Assistant wrote WTU checks to themselves (some called "bonuses") totaling as follows: 1) Bullock -- $14,416.86 over and above payroll; 2) WTU Treasurer, who was not on the payroll -- $28,939.22; and 3) Executive Assistant -- $18,805.02 over and above payroll. Other checks were written to Leroy Holmes, Michael Martin, Errol Alderman, and BULLOCK's sister's Diners Club account during this same period. Accounting IssuesAt various times throughout the period of the scheme and conspiracy, notwithstanding the failure to pay for basic items such as rent, employee pensions, and per capita tax, BULLOCK, Executive Assistant, WTU Treasurer, and certain of its accountants took steps that made it appear that payments to credit card companies, as well as payments to Holmes, Martin, Alderman, and Expressions Unlimited, were for legitimate expenses, including rent, per capita tax, employee pension and other benefits, accounting services, and other categories. This false categorization of stolen funds occurred on Forms LM-2 and 990 submitted to the United States Government, as well as on internal financial reports that were presented to other union members. Although it did not do so, WTU was required by AFT to submit audits of its books and records at least every two years. AFT and WTU had the same auditing firm -- indeed, the same partner of the same firm -- during most of the period of the scheme and conspiracy. This auditing firm audited WTU's financial statements for the fiscal year ending September 30, 1995. Thereafter, although it continued its engagement until July 2002 and was ostensibly conducting an audit, this auditing firm never finalized another audit of WTU's financial condition. Among the reasons for the firm's failure to complete an audit for any period after the 1995 fiscal year was the fact that the auditor developed actual knowledge by sometime in 1999 that WTU officers were making extensive personal use of union credit cards and that they were not reimbursing the union for these expenses. For this reason, the auditing firm was unable to certify the accuracy of WTU's books and records. Despite its knowledge about the use of WTU's credit cards, until its July 2002 withdrawal, the auditing firm made no report to WTU's Executive Board that it was unable to audit WTU's financial statements for periods after the fiscal year ending September 30, 1995. WTU also retained a certified public accountant ("CPA") to prepare its financial statements for the fiscal year ending September 30, 1998, so that the statements could then be audited by the aforementioned auditing firm. CPA obtained copies of WTU American Express bills revealing hundreds of thousands of dollars in charges -- paid for by the union -- for obviously personal purchases. Nevertheless, CPA prepared a financial report that split more than $550,000 in WTU American Express charges in half and apportioned the halves evenly to expense categories "Employee Benefits" and "Travel/Meeting Expenses," even though the American Express statements belied these categorizations. Moreover, CPA shifted over $140,000 in payments to Executive Assistant and Leroy Holmes from the category "Temporary Help" (where they did not belong) to "Employee Benefits" and moved thousands of dollars in payments to BULLOCK and Executive Assistant from accounts called "Reimbursed Expenses" and "Unknown Expenses" to an account called "Membership Services." These re-categorizations of expenditures occurred on or about December 28, 1998, a few days before WTU Treasurer and BULLOCK filed Form LM-2 for the fiscal year ending September 30, 1998, on or about December 31, 1998. With some modifications made by WTU Treasurer, these false categorizations were placed on Form LM-2. Although they were required to be, benefits paid to BULLOCK and Executive Assistant (including checks written to them by name) over and above salary were not disclosed on Form LM-2. Moreover, over $100,000 in check disbursements to Leroy Holmes were not disclosed anywhere on the form. BULLOCK and Executive Assistant also retained CPA to do their personal taxes. In August 2001, WTU contracted with a tax preparer ("Tax Preparer") to perform the functions previously performed by CPA. Tax Preparer was recommended by Leroy Holmes, who had long been one of Tax Preparer's clients. BULLOCK and Executive Assistant selected Tax Preparer on the recommendation of BULLOCK's chauffeur despite their own personal and professional connections to persons in the community with financial expertise. On behalf of WTU, Executive Assistant executed a contract to pay Tax Preparer $5,000 per month. With the assistance and instruction of Executive Assistant and others, Tax Preparer prepared a schedule of cancelled WTU checks that revealed in the fiscal year ending September 30,200 1, over $900,000 in WTU checks to American Express (over $750,000 of which was ultimately categorized as payment of per capita tax, pensions, membership services, advertising, travel, postage, and office supplies); more than $400,000 to Leroy Holmes (which was called "other expenses"); and more than $100,000 to Expressions Unlimited (which was called "public relations" and "printing/reproduction"). In another case, for the quarter October 2001 through December 2001, Tax Preparer took $97,379.89 in American Express payments and called them payment of "employee pension." Actual pension payments for this period were $0. In yet another example, Tax Preparer described an August 2001 payment of $96,459.57 to American Express as "dues/refund." These false accounting entries for the WTU Fiscal Year ending September 30, 2001 were then used on Forms LM-2 (filed with DOL on or about January 2, 2002) and 990 (filed with IRS on or about February 5, 2002). For the Government: By: ANTHONY M. ALEXIS For the Defendant: U.S. Department of Justice September 29, 2003 BY ELECTRONIC MAIL & BY HAND Stephen R. Spivack, Esquire Re: Barbara A. Bullock Dear Mr. Spivack: This letter sets forth the full and complete plea offer
to your client Barbara A. Bullock. This offer is binding only upon the
Criminal Division of the United States Attorney's Office for the
District of Columbia (sometimes referred to hereinafter as "the
United States," "the government," or "this
Office"). This plea offer will expire today, September 29,2003, at
6:00 p.m. Upon receipt, the executed letter will itself become the plea
agreement. The terms of the offer are as follows: 1. Charges: Ms. Bullock agrees to waive indictment and to plead guilty to a two-count Information charging mail fraud, in violation of Title 18, United States Code, Section 1341; and conspiracy to commit embezzlement from a labor organization and to file false tax returns on behalf of the Washington Teachers' Union, in violation of Title 18, United States Code, Section 371. It is understood that the guilty plea will be based on a factual admission of guilt to the offenses charged to be made before the Court by Ms. Bullock and will be entered in accordance with Rule 11 (c)(1)(B) of the Federal Rules of Criminal Procedure. Ms. Bullock agrees that the attached "Statement of Offenses" fairly and accurately describes Ms. Bullock's actions and involvement in the offenses. It is anticipated that prior to the Rule 11 plea hearing, Ms. Bullock will adopt and sign the Statement of Offenses as a written proffer of evidence. 2. Potential penalties, assessments, and restitution: Ms. Bullock understands that the maximum sentence that can be imposed is 10 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 $200 special assessment ($100 for each count of conviction), a 6-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, Ms. Bullock 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 (2002)(hereinafter "Sentencing Guidelines"). Ms. Bullock understands that this sentence, including the applicable Sentencing Guideline range, will be determined solely by the Court, and that the government cannot and does not make any promises, representations, or predictions regarding what sentence the Court will impose. Ms. Bullock 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 her, she cannot withdraw her guilty plea. 3. Federal Sentencing Guidelines: The parties agree, based upon the best information known to the parties at the time of this plea agreement, that the following Sentencing Guidelines calculations apply:
The parties further agree that the offense level for Count 2(b) of the Information, conspiracy to file false tax returns on behalf of WTU, would be calculated by reference to Sentencing Guidelines Section 2T 1.1. The parties also agree that, pursuant to Sentencing Guidelines Section 3D1.2, Count 1 of the Information, mail fraud, and Count 2(a) of the Information, conspiracy to embezzle from a labor organization, may constitute one offense group (calculated by reference to the fraud Sentencing Guidelines and resulting in an offense level of 34), with Count 2(b) constituting a separate offense group (calculated by reference to the tax Sentencing Guidelines). The parties agree that the best current approximation of the tax loss to the government from the offenses would be less than $1,000,000. Therefore, the parties agree that the resulting offense level under the tax Sentencing Guidelines would be 25 or lower, and, therefore, 9 or more offense levels below the more serious offense level of 34 for the fraud and embezzlement group. Therefore, pursuant to Sentencing Guidelines Section 3D 1.4 (providing for determination of combined offense level for offenses that do not group), the parties agree that Count 2(b) of the Information would not cause the addition of offense levels over and above the 34 levels for Counts 1 and 2(a). Your client agrees not to seek any departures or downward adjustments from the Sentencing Guidelines calculation agreed to in Paragraph 3 of this letter. If this plea offer is rejected, or if the plea offer does not result in a plea of guilty accepted by the Court, or if the plea of guilty is subsequently withdrawn for any reason, the parties will not be bound by the proposed interpretations of applicable Sentencing Guidelines provisions contained herein. 4. Financial Arrangements: Ms. Bullock agrees that prior to or at the time of the sentencing, she will deliver to the Clerk's Office, United States District Court for the District of Columbia, a certified check in the amount of $200.00, to cover the special assessment, as required in Title 18, United States Code, Section 3013. Ms. Bullock also agrees to provide a full and complete accounting of all assets, real or tangible, held by her or in any other name for her benefit, and, to that end, to submit a standard Form 500 (Financial Statement of Debtor). 5. No Delay of Sentencing: Ms. Bullock agrees to proceed to sentencing upon completion of a pre-sentence investigation report and establishment of a sentencing date by the Court. Ms. Bullock understands that the government does not intend to, and will not, move for any downward departure pursuant to Sentencing Guidelines Section 5K1.1. Ms. Bullock understands that if she provides substantial assistance in investigating or prosecuting another person, the government may, in its sole discretion, acting through its Sentencing Guidelines Departure Committee, move pursuant to Rule 35(b) of the Federal Rules of Criminal Procedure, after her sentencing and commitment, for a reduction of her sentence. If the Departure Committee determines that Ms. Bullock 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 Rule 35(b). Ms. Bullock understands that the determination of whether she has provided "substantial assistance" is within the sole discretion of the United States Attorney for the District of Columbia. Ms. Bullock further understands that the failure of this Office to file a Rule 35(b) motion for reduction of her sentence would not form a ground for her to move to withdraw her plea of guilty in this case. 6. Government Concessions: In exchange for her guilty plea, the government agrees not to oppose Ms. Bullock's release pending sentencing, agrees not to oppose a 3-level adjustment for acceptance of responsibility pursuant to Section 3E l .1(b) of the Sentencing Guidelines, and agrees not to oppose Ms. Bullock's request to self-report to the Bureau of Prisons to begin serving any period of incarceration. The government agrees not to seek upward adjustments to or departures from the Sentencing Guidelines calculations set forth in Paragraph 3, above. Also, subject to other paragraphs in this agreement, the United States will not bring any additional criminal charges against Ms. Bullock in the United States District Court in the District of Columbia or the Superior Court of the District of Columbia for the conduct outlined in the Information and Statement of Offenses. This agreement not to prosecute Ms. Bullock does not extend to federal or local crimes of violence as those terms are defined in 18 U.S.C. §16 and D.C. Code §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 Ms. Bullock. 7. Court is not bound: Ms. Bullock understands that the Court is not obligated to follow any recommendation of the government at the time of sentencing and that the final decision regarding her bond status or detention will be made by the Court at the time of her plea of guilty. The Court's decision in these regards is not grounds for withdrawal from this agreement. 8. 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 Ms. Bullock's criminal activities, subject to the provisions of the following paragraph. 9. 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. 10. Breach of Agreement: Ms. Bullock agrees that if she fails to comply with any of the provisions of this plea agreement, makes false or misleading statements before the Court, 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. In the event of such 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 Ms. Bullock'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) Ms. Bullock will not have the right to withdraw the guilty plea; (c) Ms. Bullock shall be fully subject to criminal prosecution for any other crimes which she has committed or might commit, if any, including perjury and obstruction of justice; and (d) the United States will be free to use against Ms. Bullock, directly and indirectly, in any criminal or civil proceeding any of the information or materials provided by her pursuant to this agreement. 11. USAO's Criminal Division Bound: Ms. Bullock understands that this agreement is binding only upon the Criminal Division of the United States Attorney's Office for the District of Columbia. 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, tax, or administrative claim pending or that may be made against Ms. Bullock. 12. Forfeiture: Your client waives any interest in items of personal property seized from the following locations pursuant to the execution of federal search warrants on December 19, 2002: 1221 Massachusetts Avenue, N.W., Apartment 1021, Washington, DC (Residence of Barbara A. Bullock); 1919 Yorktown Road, N.W., Washington, DC (Residence of Gwendolyn M. Hemphill); 717 14th Street, N.W., Suite 1000, Washington, DC (Office of Michael Martin); 1307 Lark Lane, Fort Washington, MD (Residence of James O. Baxter II); 12000 Quartette Lane, Bowie, MD (Residence of Michael and Cheryl Martin); 6900 Wisconsin Avenue, Chevy Chase, MD (Miller Furs); and 307 Yoakum Parkway, Number 711 and Storage Unit Number 711, Alexandria, VA (Residence and storage unit of Gwendolyn B. Clark). Your client further agrees not to file any claim against or otherwise contest the forfeiture of any items seized from these locations on December 19, 2002. 13. Waiver of Appeal: Ms. Bullock is aware that federal law, specifically 18 U.S.C. § 3742, affords her the right to appeal her sentence. Ms. Bullock 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 her and is not binding on the Court. Knowing that, Ms. Bullock waives the right to appeal her 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 Ms. Bullock 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, Ms. Bullock reserves her right to make a collateral attack upon her sentence pursuant to 28 U.S.C. § 2255 if new and currently unavailable information becomes known to her. In agreeing to this waiver, Ms. Bullock is aware that her sentence has not yet been determined by the Court. Realizing the uncertainty in estimating what sentence the Court will ultimately impose, Ms. Bullock knowingly and willingly waives her 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, 537 U.S. 891 (2002). 14. Complete Agreement: No agreements, promises, understandings, or representations have been made by the parties or their counsel other than those contained in writing herein; nor will any such agreements, promises, understandings, or representations be made unless committed to writing and signed by Ms. Bullock, Ms. Bullock's counsel, and an Assistant United States Attorney for the District of Columbia. If the foregoing terms and conditions are satisfactory, Ms. Bullock may indicate her assent by signing the agreement in the space indicated below and returning the original to us once it has been signed by Ms. Bullock and her counsel. Sincerely yours, By: ANTHONY M. ALEXIS I have read this plea agreement and have discussed it with my attorney, Stephen R. Spivack. 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. Date: Sept. 29, 03 Barbara A. Bullock I have read each of the pages constituting this plea agreement, reviewed them with my client Barbara A. Bullock, and discussed the provisions of the agreement with my client, fully. These pages accurately and completely set forth the entire plea agreement. I concur in my client's desire to plead guilty as set forth in this agreement. Date: September 29, 2003 Stephen R. Spivack U.S. Department of Justice PRESS RELEASE
Former Washington Teachers' Union President Pleads Guilty to Federal Mail Fraud and Conspiracy ChargesWashington, D.C. - United States Attorney Roscoe C. Howard, Jr., Michael A. Mason, 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 Charles Maddox, District of Columbia Inspector General, announced that Barbara A. Bullock, 66, of Washington, D.C., pleaded guilty today before United States District Judge Richard J. Leon to one count of mail fraud and one count of conspiracy to embezzle from a labor union and file false union tax returns in the government's ongoing investigation into the theft of millions of dollars from the Washington Teachers' Union ("WTU") and cover-up of the wrongdoing. Bullock, the former president of WTU, faces a maximum sentence of 10 years in prison and a $500,000 fine. Federal criminal defendants are sentenced under the Federal Sentencing Guidelines, and under the plea agreement, Bullock stipulated that the applicable Guidelines would require her to serve between 9 and 10 years in prison. United States Attorney Howard characterized Bullock's conduct as "nothing short of brazen greed which amounted to the fleecing of the Washington Teacher's Union." Mr. Howard further stated, "while today's guilty plea is a significant development in this investigation, it is far from over. We will continue to aggressively and vigorously pursue the trail of corruption. Our aim is to establish the full extent of the alleged criminal conduct in order to hold all involved parties accountable." Assistant Director Mason stated, "the plea taken today represents the culmination of a collaborative effort between the FBI, DOL, IRS, and the District of Columbia's Office of the Inspector General. This represents some of the most important work we do as it is essential that teachers and others who work in the public sector have faith in their unions and trade groups. It is also essential that cities such as Washington, D.C. continue to have the ability to attract good teachers, a task made more difficult by the abominable behavior of the WTU's former leadership." WTU is the collective bargaining unit for teachers employed by and retired from the District of Columbia Public Schools. Bullock admitted as part of the plea that she, along with the WTU's former treasurer ("WTU Treasurer") and her former executive assistant ("Executive Assistant"), stole well over $2.5 million from WTU starting in 1995, and continuing through about September 2002. In addition, she admitted that, because the continued and pervasive embezzlement left WTU woefully short of cash in the Spring of 2002 and in danger of having representatives of WTU not be seated at the convention of the parent union, American Federation of Teachers ("AFT"), she, WTU Treasurer, and Executive Assistant stole at least $720,000 from individual D.C. teachers by directing the city to withhold $144 more than the lawful dues deduction from teachers during one pay period in June 2002. They then spent these funds to pay back dues to AFT and give themselves and others substantial payments, some styled as "bonuses." The scheme was carried out first through the use of credit cards for lavish personal purchases and through the co-conspirators writing checks to themselves for false and fictitious services or reasons. They further executed the scheme 1) by creating a false company called Expressions Unlimited, which was run by Executive Assistant's son-in-law, Michael Martin, who pleaded guilty in April 2003 to conspiring to launder money of WTU, and Errol Alderman, Martin's friend, who was charged with conspiracy last week, and laundering money through Expressions Unlimited's bank account; and 2) by writing more than $1 million in checks to Leroy Holmes, Bullock's chauffeur, who pleaded guilty in February 2003 to conspiracy to launder funds. Holmes would cash union checks and return most of the proceeds to Executive Assistant or deposit them into Bullock's bank account. Likewise, Martin and Alderman would cash union checks and give the proceeds to Bullock and Executive Assistant, or deposit WTU checks into Expressions Unlimited's bank account and then write Expressions Unlimited checks from the proceeds to Bullock and Executive Assistant. Bullock and Executive Assistant would then either use the money to make it appear that they were using their personal funds to pay for personal credit card charges to WTU's accounts or spend the funds as they saw fit. Bullock also acknowledged that the fraud was concealed for years because of WTU's failure to complete and submit audits to AFT (which for years had the same auditor as WTU) and because, in some cases, certain other persons performing accounting-related services for WTU improperly accounted for the use of WTU funds and,, thereby, made it appear that WTU funds were being spent appropriately. This improper accounting included taking, in some cases, a year's worth of American Express charges and dividing them among legitimate-sounding accounts, such as "Employee Benefits" and "Travel and Entertainment." The false accounting information was then reported and, to some extent, further falsified, on WTU financial reports, including annual tax returns submitted to the IRS and financial statements filed with the Department of Labor. In addition, Bullock admitted that she and her co-conspirators made false statements to other union members to conceal and cover up their scheme. In announcing today's guilty plea, U.S. Attorney Howard, Assistant Director in Charge Mason, District Director Cahir, and Special Agent in Charge Szczeszek commended the investigative work of FBI Special Agents Katherine L. Andrews, Julie S. Lenkart, and Connie Siebert Smith; DOL Senior Investigator Mark Wheeler, Investigator Frank Gore, and Auditor Tyrone Ross; IRS Special Agent Anthony Brooks, DC OIG Special Agent William Redder as well as numerous other federal and local law enforcement agents who have assisted in this ongoing investigation. In addition, they commended U.S. Attorney's Office Auditor Nick Novak and Legal Assistant Felicia Price, as well as Assistant U.S. Attorneys Anthony M. Alexis and James W. Cooper, the prosecutors handling the case.
Statement of Labor Secretary Elaine L. Chao
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| For Immediate Release October 7, 2003 |
Contact: Alex Wohl 202/879-4458 awohl@aft.org |
WASHINGTON, D.C.- Today's action in the federal court in the District of Columbia is an important step forward in bringing to justice the individuals responsible for the outrageous theft from, and betrayal of the hardworking teachers and other members of the Washington Teachers Union (WTU).
When the AFT first uncovered this scandal last year, we emphasized that those responsible should be punished and that the union recover any money stolen from its members.
We are now in the process of restoring the trust of those members and rebuilding the union so that members will again be well served. That rebuilding and restoration of trust have been proceeding under the leadership of an AFT-appointed administrator. To further aid in this restoration, the AFT also filed a lawsuit on behalf of the members of the WTU for restitution of the stolen funds.
Today's plea agreement should allow that lawsuit to proceed on a speedier path, permit the union to continue on the road to recovery., and help ensure that Washington's teachers can continue to focus on the education of children in their classroom, rather than on proceedings against criminals in the courtroom.
It is unfortunate that the Department of Labor has chosen to use this case as an excuse to justify its new regulations for labor unions. While we stand firmly behind transparency and openness in all union activities, these regulations would not have revealed the wrongdoing at WTU, nor will they do much to prevent future wrongdoing. Instead, these cumbersome new regulations will drown pertinent information in reams of paper and divert resources so that unions will be forced to spend time and money completing bureaucratic paperwork rather than serving their members.
The AFT represents more than 1.2 million pre-K through 12th-grade teachers, paraprofessionals and other school-related personnel, higher education faculty, nurses, healthcare workers, and federal, state and local government employees.
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