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untanglingwebs
El Supremo
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When Flint residents elect their council person they expect to receive that person's honest services and not have someone who is using their position for their own personal gain. All council members are expected to disclose annually their income, assets, corporate gifts and potential conflicts of interest. That didn't always happen and one such omission and deception had the potential of costing the Flint Retirement Fund millions in 2004.
It was a member of the Flint Retirement Board that came to me to indicate Second Ward Councilman and Retirement Board Trustee Edward L. Taylor wanted to bring some International managers to address the Investment Committee within a couple of months. The March 23, 2004 Retirement Board minutes (page 8839) substantiate that allegation.
I was also informed that Taylor was employed by AA Capital Partners, a Chicago based investment firm. It wasn't until about 2009 that it was reported that John Oracchio of AA Capital Partners had misused up to $50 million of union pension funds in Michigan.
Last edited by untanglingwebs on Sat Aug 25, 2018 5:41 pm; edited 1 time in total |
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Sat Aug 25, 2018 4:52 pm |
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untanglingwebs
El Supremo
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It was Board Chairman Daniel Hall and Hurley Executive Dan Coffield that told Taylor that this request was not the proper procedure. The investment manager for the retirement fund was Callen who should be consulted about bringing in these managers.
That information was not in the records which reflected the income sources for the previous year. Taylor had experienced a personal bankruptcy and his Taylor Trucking company was in Bankruptcy Court. The Emergency Financial manager reduced the Council pay to $50 per meeting and at some point Taylor stopped attending meetings. However, this employment explained why Taylor had referred to his clients along Dort Highway. These businesses had to renew their licenses by a vote of council.
Taylor was not mention in the AA capital Partners website until early 2006. It was in 2005 when Taylor showed he received income in 2004 from GRS Vll LLC, part o a numbered Limited liability corporations with a registered agent Russell Ethridge and an address of 24053 Jefferson Avenue, St Clair Shores, Michigan. The corporation was formed on December 28, 2004.
Last edited by untanglingwebs on Sat Aug 25, 2018 5:41 pm; edited 1 time in total |
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Sat Aug 25, 2018 5:14 pm |
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untanglingwebs
El Supremo
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I traced the address back to an attorney Vincent LoCicero of the law firm of Bersback LoCicero. I called the number (586-777-0400), but the receptionist refused to give me any information at first. Finally, I was told that an attorney with the firm represented the corporation and i was connected to Russel Ethrige. Ethridge was not forthcoming with any information about the corporation and demanded to know who I was. I found a site that showed Ethridge as a Gross Pointe Municipal Judge since 1998. His career as an attorney focused on civil and criminal litigation and trial work.
AA Capital Partners
It wasn't until early 2006 that the AA Capital Partners showed Ed Taylor as a Vice President of marketing:
"Mr Ed Taylor oined AA Capital Partners in 2003 and focuses on marketing and client relations. Mr. Taylor held various municipal and educational positions in California and Michigan. He was a city councilman and trustee for the City of Flint for 13 years. Mr. Taylor earned MA and BS degrees from Eastern Michigan University. He is a member of the National Association of Security Professionals." |
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Sat Aug 25, 2018 5:38 pm |
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untanglingwebs
El Supremo
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The firm overview:
"With offices in Chicago,Illinois and Detroit, Michigan, AA capital Partners is a private equity firm specializing in both direct equity and private equity fund investing. The firm, which was formed in 2001 as a spin off of ABN-AMRO Fund Investment Group, has made nine funds of fund commitments and three direct private equity investments."
The Partners:
Paul Oliver Jr. -Joined the firm in 2001; previously he was the Executive vice President of the Private Equity Investment Department at ABN-AMRO Bank.
John Oracchio-Joined the firm in 2001; previously he was a Managing Director at Bank of America.
Charles Wall jr.- Joined the firm in 2001; previously he was the Chief o fBank of America Equity Partners. |
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Sat Aug 25, 2018 6:03 pm |
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untanglingwebs
El Supremo
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The lavish lifestyle of John Oracchio became obvious and by 2006 The Securities and Exchange Commission was checking the books of AA Capital Partners and ordered a receiver for the cororation. That was to lead to the criminal charges that put Oracchio in prison and the realization that he had misused between $50 to $60 million of union pension funds mostly from Michigan. Vigilant Flint pension trustees may have helped Flint dodge a similar fate.
On June 16, 2010,the Chicago Tribune ran a lengthy story detailing the dual lives of Oracchio. One hand he was a respectable banker with a wife and three children in Arlington Heights. In Michigan he was a high rolling millionaire with an ex-stripper girlfriend from the Crazy Horse bar in Detroit where he entertained clients. He was said to have spent $180,000 to have his 27 year old girlfriend made a manager of the bar, bought her a horse farm, bought a home for her parents and gave her $1 million in jewelry.
Oracchio drove a Bentley, collected race horses, bought property in Michigan and Las Vegas and used private jets to fly to Vegas and tropical Islands.In addition he spent $1 million in pension funds for political donations and for donations to politically connected charities . Another $2.5 million was spent on sporting events such as luxury box seats to the Bears, Blackhawks and Detroit Red Wings. About $1.5 million was spent on first class airfair and high end hotels. |
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Sun Sep 02, 2018 3:06 pm |
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untanglingwebs
El Supremo
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AA Capital Partners managing partner Paul Oliver and the CFO Mary Elizabeth Stevens were found to have facilitated Oracchio in these thefts by approving millions in expenses to accounts controlled by Oracchio without the proper documentation.
On July 22, 2009 the FBI press release reported that between 2002 and September 13 2006 Union Funds, primarily in Michigan, had $169 million invested in AA Capital Partners Funds.
Oracchio " fraudulently caused AA Capital Partners to make "capital calls" on accounts containing the union pension funds, knowing the funds he was causing to be withdrawn were not to be directed towards":
1. investments;
2. legitimate management fees;
3. attributable overhead expenses.
Oracchio received a 9 year prison sentence, a fine and restitution. The maximum sentence would have been 25 years. He attempted suicide and was hospitalized. |
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Sun Sep 02, 2018 3:33 pm |
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untanglingwebs
El Supremo
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Pensions and Investments, reported in August 2009 that AA Capitol Partners was required to pay back $50 million, but the Detroit News reported up to $60 million lost.
Pension Funds with losses:
1. Carpenters Union Pension Fund of Detroit and Vicinity;
2. Operating Engineers Local 324 Pension Fund;
3. Michigan Regional Council of Carpenters Annuity Funds;
4. Millrights Local #1102 Supplemental Pension Fund;
5. Michigan Teamsters Joint Council #43 Pension Fund. |
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Sun Sep 02, 2018 3:44 pm |
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untanglingwebs
El Supremo
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| Besides major theft there was bribery. Corrachio cooperated with the FBI which led to the arrest o Julian (Roxy) Jewette. who plead guilty. Jewette was a resident of Las Vegas who admitted that he gave kickbacks to a former of the Michigan Regional Chamber of Carpenters. Oracchio was required to hire Jewettes firm to be a consultant inte construction of the Hard Rock Casino in Biloxi Mississippi. Ironically the initial casino was said to be failing until Hurricane Katrina wiped it out. It was rebuilt 2 years later. |
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Tue Sep 04, 2018 8:13 am |
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untanglingwebs
El Supremo
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Walter Ralph Mabry Pleads Guilty to Taking Kickbacks While Boss of the Michigan Carpenters Union
U.S. Attorney’s Office
May 16, 2011
Eastern District of Michigan
(313) 226-9100
Walter Ralph Mabry, the former leader of the 20,000-member Michigan Regional Council of Carpenters union, pleaded guilty today to taking kickbacks in connection with Mabry’s position as head of the union and chairman of the board of trustees of the Carpenters’ Pension Trust Fund, United States Attorney Barbara McQuade announced today.
McQuade was joined in the announcement by FBI Special Agent in Charge Andrew Arena; James Vandenberg, the Special Agent in Charge of the Department of Labor, Office of Investigations-Office of Labor Racketeering and Fraud Investigations; and Paul C. Baumann, Cincinnati Regional Director, Department of Labor Employee Benefits Security Administration.
During a hearing this morning before United States District Judge Arthur Tarnow, Mabry admitted that he accepted between $5,000 and $10,000 in hotel and entertainment expenses from Joseph Roxlyn Jewett and John Orecchio between April 2004 and September 2006. Orecchio was an executive at AA Capital Partners, an investment manager for the Carpenters’ Pension Trust Fund, and Jewett was a consultant hired by AA Capital in connection with a $70 million investment by the pension fund in the construction of a Hard Rock gambling casino in Biloxi, Mississippi. Pursuant to the terms of the parties’ plea agreement, at the time of the sentencing hearing in this case, Judge Tarnow will decide if Mabry also agreed to take $266,000 from Orecchio and Jewett as an additional kickback because of Mabry’s decisions relating to the casino investment by the Carpenters’ Pension Trust Fund. If Judge Tarnow decides that Mabry accepted this additional kickback, then Mabry would face the possibility of a longer prison sentence.
The charges against Mabry were set forth in a criminal information that was unsealed before the plea hearing.
On January 11, 2010, Jewett was convicted in the Eastern District of Michigan of promising to give a $266,000 kickback to Mabry because Mabry caused Orecchio to hire Jewett as a consultant on the gambling casino investment. In a separate case in the United States District Court in the Northern District of Illinois, Orecchio was convicted in February 2010 of embezzling $24 million from the Carpenters’ Pension Trust Fund and other union pension funds.
Based on his guilty plea and felony conviction for taking kickbacks in connection with his fiduciary duties with a union pension plan, Mabry is facing a maximum of three years in prison and a fine of up to $250,000.
“We will pursue corruption whether it occurs in city hall, public schools, federal agencies, or labor unions,” United States Attorney McQuade said. “When labor leaders abuse their positions for personal gain, they rob the working men and women they were entrusted to represent. We hope these charges will deter others from abusing their positions.”
Andrew Arena, Special Agent in Charge, Federal Bureau of Investigation said, “Embezzling union resources and accepting kickbacks systematically robs union monetary assets and decreases benefits to all members. The FBI will continue to aggressively investigate these cases with our law enforcement partners.”
James Vanderberg, Special Agent in Charge for the Chicago Regional Office of the U.S. Department of Labor, Office of Inspector General, said: “Pension-related kickback schemes orchestrated by union officials to exploit affiliated benefit plans compromise the retirement of hardworking men and women. This office will work aggressively with our law enforcement partners to investigate crimes that undermine the financial well being of all union pension funds.”
Paul C. Baumann, Cincinnati Regional Director, Department of Labor Employee Benefits Security Administration, said, “The Employee Benefits Security Administration is committed to vigorously enforcing the law to ensure that employee benefit plan officials do not engage in secret deals and accept illegal kickbacks which influence their decisions with respect to the benefit plans and jeopardize the retirement security of the participants and beneficiaries.”
The case was investigated by agents of the Federal Bureau of Investigation; the Department of Labor, Office of Inspector General-Office of Labor Racketeering and Fraud Investigations; and the Employee Benefits Security Administration. It is being prosecuted by Assistant United States Attorney David A. Gardey.
This content has been reproduced from its original source. |
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Tue Sep 04, 2018 8:15 am |
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untanglingwebs
El Supremo
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Chicago Money Manager Sentenced; Liable for Union Pension Scams
Posted on July 9, 2010 by Carl Horowitz
DollarsJohn Orecchio saw in the nearly $200 million in union pension benefits under his management a ticket to a high roller's life. It proved to be a ticket to prison. On June 17, the one-time Chicago investment banker and equity fund manager was sentenced in U.S. District Court for the Northern District of Illinois to nine years and four months in federal prison to be followed by three years probation for embezzling more than $24 million from various Michigan-based labor pension plans. He had pleaded guilty in February. Orecchio also will have to pay more than $26 million in restitution – on top of the $50 million he'll have to fork over in the wake of a civil judgment against him last August obtained by the U.S. Department of Labor and another $7.8 million toward a DOL-engineered global settlement announced this past June 22 against his company, AA Capital Partners, and other parties.
Union Corruption Update examined this case in detail last July. Orecchio, now 44, a resident of Arlington Heights, Illinois, in 2002 co-founded AA Capital Partners, an equity fund located at 10 South LaSalle Street in downtown Chicago. He served as CEO and chief rainmaker. Among investors putting their money in AA accounts were pension fund managers representing Michigan unions, mainly in the Detroit area. They included International Union of Operating Engineers Local 324, Michigan Teamsters Joint Council 43 and Millwrights Local 1102. Between 2002 and September 2006 these and other labor organizations gave Orecchio $169 million, a figure that prosecutors later estimated at $194 million. But rather than hold the money in trust (as promised), he converted it to his own use via fraudulent capital calls, triggering an eventual loss of $24.2 million. Actually, that might have been on the low side, as he admitted causing up to $60 million in losses.
Orecchio lived as he stole – on a grand scale. Pleadings filed by his attorney, William Ziegelmueller, cite his "wining and dining" of union officials that had "spiraled out of control." During his four-year scam, Orecchio diverted $2.5 million in pension funds toward tickets for sporting events, including luxury box seats at Chicago Bears, Chicago Blackhawks and Detroit Red Wings games, plus another $1.5 million for first-class plane tickets, luxury hotels stays, and "client events." The most colorful of these "events" centered on his relationship with a female dancer at Crazy Horse Detroit, a topless strip joint where he frequently took clients. Though he never owned a stake in the club, court records show that Orecchio used $180,000 in union pension money to renovate the premises in return for the owner making her a manager. He was a sugar daddy in other ways, buying the woman a horse farm in Michigan and about $1 million in jewelry. He eventually proposed marriage to her all the while supporting his wife and three kids back home in the Chicago area.
At the same time, Orecchio was becoming a political player. Reports filed by court receiver Scott Porterfield indicate Orecchio used about $1 million in pension funds to make political donations, including contributions to politically-connected charities, in an effort to attract new investors. Orecchio also admitted he had tried to bribe then-Detroit Mayor Kwame Kilpatrick in return for an opportunity to convince managers of the Detroit Police and Fire Pension Funds to invest assets with his firm. Kilpatrick received a four-month jail sentence in 2008 for obstruction of justice in a separate case involving about 14,000 extramarital text messages between him and his female chief of staff (Kilpatrick was corrupt in other and more serious ways, as National Legal and Policy Center documented last month).
The house of cards began to collapse in 2006 when investigators from the Securities and Exchange Commission took a close look at the books of AA Capital Partners. Examiners discovered that the company had $7 million in expenses and only $2 million in revenues. They concluded that the $5 million shortfall resulted from misappropriation. The SEC filed suit in federal court to remove the company's managers and appoint a court receiver to recover what appeared to be a far larger sum in missing assets. The Labor Department conducted its own investigation, eventually filing a complaint alleging violations of the Employee Retirement Income Security Act (ERISA). On August 3, 2009, the department won a consent decree requiring Orecchio to replenish union funds by $50 million. His business partners, AA Capital Partners co-owner Paul Oliver and CFO Mary Elizabeth Stevens, weren't prosecuted, but were sued by the government; the pair eventually were barred from serving in a management capacity for pension funds or publicly-traded companies.
Facing up to 25 years in prison, Orecchio decided to cooperate with an ongoing federal probe into union corruption in the Detroit area in exchange for a lighter sentence. Court documents show that Orecchio made more than 150 phone calls to union officials taped by the feds and wore a wire during 20 in-person meetings with union representatives. His help paid off. A federal grand jury indicted Julian "Roxy" Jewett, a Las Vegas resident who pleaded this past January to providing kickbacks to Walter Mabry, a former trustee of the Michigan Regional Council of Carpenters, in exchange for Orecchio hiring Mabry's firm as a consultant for developing a Hard Rock casino in Biloxi, Mississippi. Jewett received a year of probation. Though Mabry was not charged with any offense, he did receive a two-year sentence in an unrelated case concerning his use of about $120,000 in unauthorized discounts from Detroit-area contractors to build his Grosse Pointe Park, Mich. residence.
John Orecchio hasn't been doing well lately. His marriage is over and his possessions are gone. At one point, he attempted suicide and was hospitalized. It's hard to imagine how he'll be able to comply with the restitution order, to say nothing of the combined $57.8 million he owes from the DOL civil settlements. Not many union officials are sympathetic to his plight. "Anyone who would steal money from hardworking people deserves the full ramifications of the law," said Rich Davis, newly-elected president of the Michigan Regional Council of Carpenters, sponsor of a benefit plan that Orecchio ripped off. "This has had an impact on people's retirement." The stolen funds will be restored by the company's insurers, Indian Harbor Insurance Co. and Federal Insurance Co. It will take somewhat longer to restore the trust Detroit-area union members had in their pension managers. |
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Tue Sep 04, 2018 8:21 am |
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untanglingwebs
El Supremo
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Just as the State of Michigan did not keep their vow on revenue sharing, the state violated a 20 year compact from 1993 with seven tribes in the first three years. State violation of the exclusivity part of the compact cost the state the 8% net annual payment from the native casinos in the compact. The tribes continue to pay the local community the 2% net per the compact.
Native American tribes are sovereign nations, and as such they are dealt with nation to nation by the United States Congress. Thus the State of Michigan does not have the authority to enforce their regulatory and penal codes over the tribes.
In 1987, the Cabagon Band of Mission Indians sued the State of California in Federal Court over the states efforts to impose state penal codes on the tribe to eliminate tribal gaming. The end result was the Court ruled the California state ordinances could not be applied to the tribes or their reservations. The tribes were to retain their sovereignty and that sovereignty was only subordinate to the federal government and not the states. |
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Tue Sep 11, 2018 8:36 am |
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untanglingwebs
El Supremo
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The Supreme Court noted how Congress has neither permitted nor precluded gaming activities. And since California at the time did not ban all forms of gambling and had a state lottery, parimutual horse racing, and over 400 card rooms (like Class II Indian gaming) the state could not interfere in gaming on the reservations.
"The U.S. Supreme Court held that state jurisdiction was pre-empted if it interfered or was incompatible with federal and tribal interests reflected in tribal law."
The California case was the main reason the Congress created the regulatory agency, the Indian Gaming Commission 1988 . The regulations of this body bars states from attempt to tax Naive casinos. Past decisions of the United States Department of Interior require states entering into a compact for revenue sharing to confer substantial economic benefits to tribes as a prerequisite. |
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Tue Sep 11, 2018 9:03 am |
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untanglingwebs
El Supremo
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MGCB - Tribal - State Compacts in Michigan - State of Michigan
https://www.michigan.gov/mgcb/0,4620,7-351-79129_79729-245321--,00.html
Tribal - State Compacts in Michigan. 1993 Consent Judgment. 1993 Stipulation for Entry of Consent Judgment & Consent Judgment. 1993 Compacts. Bay Mills Indian Community. 1993 Compact. 1998 Compacts. Little River Band of Ottawa Indians. 1998 Compact. 2007 Compact. Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, ... |
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Thu Sep 13, 2018 5:22 am |
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untanglingwebs
El Supremo
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1993 CONSENT JUDGMENT
1993 Stipulation for Entry of Consent Judgment & Consent Judgment
U.S. District Court Western District Michigan
Hon. Benjamin F. Gibson
Sault Ste.Marie Tribe of Chippewa
Grand Traverse Band of Ottawa and Chippewa Indians
Keweenaw Bay Indian Community
Hannahvilel Indian Community
Bay Mills Indian Community
Lac Vieu Desert Band of Superior Chippewa Indians
vs
John M. Engler , Governor of Michigan
Intervenor: Saginaw Chippewa Tribe of michigan |
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Thu Sep 13, 2018 5:30 am |
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untanglingwebs
El Supremo
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The Saginaw Chippewa Tribe was allowed to intervene under same conditions as original six tribes.
There was an agreement to pay 8% of net win to the State of Michigan from each Class III electronic game at each casino in semi annual payment to the Michigan Strategic Fund and 2% o local units of state government.
Payments were valid only as long as the tribes held exclusive rights to electronic games of chance. The tribes were not required to pay if persons or entities other than tribal parties were given these rights.
*In 1996 Detroit allowed three commercial casinos to be constructed. |
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Thu Sep 13, 2018 5:53 am |
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