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U.S. Department of Justice United States Attorney District of Columbia Judiciary Center 555 Fourth St, N.W. Washington, D.C 20530 August 14, 2003 BY FACSIMILE AND REGULAR MAIL Kenneth M. Robinson, Esq. Re: Errol C. Alderman Dear Mr. Robinson: This letter sets forth the full and complete plea offer to your client Errol C. Alderman. 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. The executed letter will itself become the plea agreement. The terms of the offer are as follows: 1. Charges: Mr. Alderman agrees to waive indictment and to plead guilty to a one-count information charging conspiracy to commit offenses against the United States, to wit, money laundering, 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 offense charged to be made before the Court by Mr. Alderman and will be entered in accordance with Rule 11(c)(1)(B) of the Federal Rules of Criminal Procedure. Mr. Alderman agrees that the attached "Statement of the Offense" fairly and accurately describes Mr. Alderman's actions and involvement in the conspiracy. It is anticipated that during the Rule 11 plea hearing, Mr. Alderman will adopt and sign the Statement of the Offense as a written proffer of evidence. 2. Potential penalties, assessments, and restitution: Mr. Alderman understands that the maximum sentence that can be imposed is five years imprisonment, a fine of $250,000, 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. Alderman 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. Alderman 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. Alderman 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. 3. Federal Sentencing Guidelines: The parties agree that the following Guideline calculations apply:
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. 4. Financial Arrangements: Mr. Alderman agrees that prior to or at the time of the sentencing, he will deliver to the Clerk's Office, United States District Court for the District of Columbia, a certified check in the amount of $100.00, to cover the special assessment, as required in Title IS, United States Code, Section 3013. Mr. Alderman 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). 5. Cooperation: Mr. Alderman agrees to cooperate completely, candidly, and truthfully in the investigation by this Office and federal, state, and local law enforcement agencies. Specifically, Mr. Alderman agrees:
6. Government Concessions: In exchange for his guilty plea, the government agrees not to oppose Mr. Alderman'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 3 above, agrees not to oppose Mr. Alderman's voluntary surrender to commence serving any sentence which is imposed, provided that Mr. Alderman 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. Alderman 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. This agreement not to prosecute Mr. Alderman 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 Mr. Alderman. 7. Departure Committee: At the time of Mr. Alderman'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. Alderman to the United States. In addition, before sentencing, the United States will inform the Departure Committee of the United States Attorney's Office for the District of Columbia of the full nature, extent, and value of the cooperation provided by Mr. Alderman to the United States. If the Departure Committee determines that Mr. Alderman 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 Section 5K1.1 of the Sentencing Guidelines. Mr. Alderman 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. Alderman 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. Alderman 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 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 is 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. Alderman's criminal activities, subject to the provisions of the following paragraph. 10. The United States and Mr. Alderman hereby agree that since Mr. Alderman has agreed to cooperate with the United States, information provided by Mr. Alderman 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. Alderman 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. Alderman 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. Alderman'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. Alderman will not have the right to withdraw the guilty plea; (c) Mr. Alderman 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. Alderman, 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. Alderman 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: Alderman has knowingly given materially false, incomplete, or misleading information in fulfilling the terms of his cooperation agreement or whether Mr. Alder «ran 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. Alderman so requests, the matter shall be submitted to the Court and shall be determined by the Court in an appropriate proceeding at which Mr. Alderman'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 debriefing and interviewing sessions conducted by investigators and/or attorneys for the government, Mr. Alderman shall be entitled to the presence, advice, and assistance of counsel, unless waived. 15. User's Criminal Division Bound: Mr. Alderman 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 Mr. Alderman. 16. Waiver of Appeal: Mr. Alderman is aware that federal law, specifically 18 U.S.C. § 3742, affords him the right to appeal his sentence. Mr. Alderman 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. Alderman 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. Alderman 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, Mr. Alderman 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. Alderman is aware that his sentence has not yet been determined by the Court. Realizing the uncertainty in estimating what sentence the Court will ultimately impose, Mr. Alderman 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. Alderman, Mr. Alderman's counsel and an Assistant United States Attorney for the District of Columbia. If the foregoing terms and conditions are satisfactory, Mr. Alderman 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. Alderman and his counsel. Sincerely yours, By: 1 have read this plea agreement and have discussed it with my attorney, Kenneth M. Robinson. 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: 8/14/03 Errol C. Alderman, Defendant 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. Date: 8/14/03 Kenneth M. Robinson STATEMENT OF OFFENSE United States v. Errol C. Alderman The Washington Teachers' Union ("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 affiliate 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
Will Treasurer. For all periods relevant to the conspiracy described
herein, the persons occupying these offices did not change. Defendant, ERROL C. ALDERMAN, was a friend of Michael Martin, the son-in-law of WTU Executive Assistant. At various times defendant, ERROL C. ALDERMAN, planned to own and operate a clothing store in and around the District of Columbia. In order to complete his plan to own and operate a clothing store, defendant, ERROL C. ALDERMAN, came up with the concept of a company known as "Expressions Unlimited." By June of 1999 Expressions Unlimited was dormant and conducted no business. Commencing sometime in or about August 1998 defendant, ERROL C. ALDERMAN, and Michael Martin entered into an agreement to assist WTU-President, WTU-Treasurer and WTU Executive Assistant hide thefts from the WTU by accepting checks from the WTU in defendant, ERROL C. ALDERMAN's, name cashing the checks, and giving the proceeds of the checks to Michael Martin. From in or about August 1998 until in. or about January 2002, defendant, ERROL C. ALDERMAN, received eight (8) checks from Michael Martin that were drawn on WTU's Independence Bank account and made payable to ERROL C. ALDERMAN in his personal capacity for "printing" services, but defendant, ERROL C. ALDERMAN, in fact performed no legitimate services to WTU of any kind. Defendant ERROL C. ALDERMAN accompanied Michael Martin to WTU's headquarters and would receive WTU checks from Michael Martin. Defendant ERROL C. ALDERMAN, in turn, would go to Independence Bank with Michael Martin and would cash the check and would hand the proceeds of each to Michael Martin. From in or about August 1998 until on in or about January of 2002, defendant, ERROL C. ALDERMAN, received $47,290 in WTU funds through these checks written to him in his personal capacity. Commencing sometime in or about June of 1999, Michael Martin along with defendant, ERROL C. ALDERMAN, caused a depository account in the name of Expressions Unlimited to be opened at Bank of America in the District of Columbia. The account was opened in the name of ERROL C. ALDERMAN d/b/a Expressions Unlimited. Defendant, ERROL C. ALDERMAN, was the sole signatory on bank account. Defendant, ERROL C. ALDERMAN, and Michael Martin opened this account at the request of WTU President and WTU Executive Assistant for the express purpose of using the account to deposit checks written from WTU accounts and, in tam, to write checks out of the Expressions Unlimited account back to WTU President and WTU Executive Assistant and withdraw cash from the account for WTU President and WTU Executive Assistant. These Expressions Unlimited checks and cash given to WTU President and WTU Executive Assistant were then.to be used for their personal purposes. In order to make it appear that the relationship between Expressions Unlimited and WTU was legitimate, and to avoid the appearance that WTU funds were being paid to WTU Executive Assistant's son-in-law, Defendant, ERROL C. ALDERMAN, Michael Martin, and WTU Executive Assistant agreed that, Michael Martin, would not be the legal signatory on the Expressions Unlimited account. Instead, defendant, ERROL C. ALDERMAN, was the only authorized signatory. The bank statements on the Expressions Unlimited account were sent to defendant, ERROL C. ALDERMAN's, address. Further, to facilitate the scheme, defendant, ERROL C. ALDERMAN, signed blank checks on the Expressions Unlimited Account and gave the checks to Michael Martin so that he could make deposits into the Expressions Unlimited account and withdrawals from the Expressions Unlimited account without defendant ERROL C. ALDERMAN being present. Defendant, ERROL C. ALDERMAN, later facilitated the scheme by having the bank statements for the Expressions Unlimited account sent directly to Michael Martin's home address. Michael Martin, learned from WTU President and WTU Executive Assistant that, at least in part, the WTU funds paid into the Expressions Unlimited account and then paid back to them would be used to make it appear that WTU President was reimbursing WTU for personal expenditures previously charged to WTU. Expressions Unlimited, in fact, performed no services and provided no goods to WTU. Ultimately, WTU President and WTU Executive Assistant caused defendant, ERROL C. ALDERMAN, and Michael Martin to receive over $480,000 in WTU checks signed by WTU President and WTU Treasurer, which Michael Martin, and defendant, ERROL C. ALDERMAN, caused to be deposited into the Expressions Unlimited account at Bank of America. These funds constituted more than 98% of the checks deposited into this account. Of these funds, at the direction of WTU President and/or WTU Executive Assistant, Michael Martin, and defendant, ERROL C. ALDERMAN, withdrew cash from the Expressions Unlimited account and gave a substantial portion of it to WTU President (generally by depositing it directly into WTU President's bank account) and WTU Executive Assistant, or wrote Expressions Unlimited checks to WTU President and WTU Executive Assistant. During the period that defendant, ERROL C. ALDERMAN, was laundering WTU funds through his Expressions Unlimited bank account, Michael Martin, who was then a District of Columbia government employee in the Department of Health occupying a supervisory position, alerted defendant, ERROL C. ALDERMAN, to a position within Michael Martin's office that was to be filled through a temporary employee placement agency, Defendant, ERROL C. ALDERMAN, applied for the position through the temporary employee placement agency and received the position within Michael Martin's government office. Several months later, in the Spring of 2002, defendant, ERROL C. ALDERMAN, was hired as a full-time, salaried employee of the District of Columbia Department of Health, earning over $50,000 annually. An example of the workings of the conspiracy is as follows: in furtherance of the conspiracy and to carry out its unlawful objectives, in or about August 26, 2000, Michael Martin, deposited, or caused to be deposited, a WTU check signed by WTU President and WTU Treasurer in the amount of $60,000 into the Bank of America Expressions Unlimited account. On or about September 5, 2000, defendant, ERROL C. ALDERMAN, within the District of Columbia, obtained a $55,000 cashier's check drawn against funds in the Expressions Unlimited account, payable to WTU President in his/her personal capacity. Defendant, ERROL C. ALDERMAN, gave the cashiers check to Michael Martin. These funds were then deposited into WTU President's personal account. On or about September 13, 2000, WTU President wrote a personal check payable to the WTU credit card account in the amount of $60,000. For the Government: By: ANTHONY M. ALEXIS For the Defendant: KENNETH M. ROBINSON |
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