Former union official indicated on extortion, embezzlement charges
The former top elected official of a Detroit-based operating engineers union was indicted Wednesday by a federal grand jury on charges of extortion, embezzlement, money laundering and conspiracy.
Prosecutors allege John Hamilton, 61, now of Rivera Beach, Florida, used his position as business manager of Operating Engineers Local 324 to personally enrich himself through a series of illegal schemes.
Local 324 represents 14,000 heavy equipment and crane operators throughout Michigan. Hamilton served as the union’s top elected official from 2003 through 2012 when it had closer to 18,000 members, federal prosecutors said.
Hamilton is charged with extorting business agents and other employees of Local 324 to each pay $5,000 of their salaries per year into what was called the “Team Hamilton Slate Fund.”
The fund was to be used for union election campaign expenses. However, Hamilton instead used a significant portion of the money for his own personal benefit, prosecutors said.
Hamilton threatened union employees with termination if they complained about the payments to his slate fund, according to the indictment. In 2010, Hamilton fired one business agent who had complained about the payments to the fund.
Hamilton used some of the money that he extorted to pay for meals and liquor, as well as $5,000 to his daughter as a wedding present, prosecutors said.
After losing re-election in an August 2012 membership vote, Hamilton took $71,000 from the slate fund and distributed more than $35,000 each to two other top Local 324 officials, according to federal officials.
Hamilton structured and laundered this money by distributing it in a series of seventeen checks with false dates, all for amounts under $10,000, officials said.
Hamilton also is charged with embezzling Local 324 funds and Local 324 pension funds by spending more than $50,000 on special rims for his own union-issued Cadillac DTS, as well as expensive meals and liquor at restaurants for little or no union business purpose.
Hamilton faces a maximum of 20 years in prison and a fine of up to $250,000 on each of the four counts of extortion, conspiracy to commit extortion, money laundering, and conspiracy to commit honest services mail and wire fraud in the Indictment.
“Labor unions exist for the benefit of their members, not to line the pockets of the union leaders,” U.S. Attorney Barbara McQuade said. “Hard-working union members deserve honest representation, and leaders who exploit their positions for personal gain will be brought to justice.”