Charges Filed In Phony Detroit Union Scheme

June 15, 2013

DETROIT (WWJ/AP) - Federal authorities say a Teamsters official took cash while conspiring to make it appear that workers at a fruit-and-vegetable wholesaler belonged to the union.

Michael Townsend, a 68-year-old Dearborn Heights resident, was indicted Thursday by a federal grand jury in Detroit on bribery and conspiracy charges. He faces a maximum of five years in prison and a fine of up to $ 250,000.

According to the indictment, from April 2003 through August 2008, Townsend conspired with others to prevent Teamsters Local 337 from organizing the employees of LaGrasso Brothers Produce, Inc. by creating a front company known as Sam LaGrasso Produce Company.

The indictment allegedes that Townsend and his co-conspirators would use LaGrasso family members and managers of LaGrasso Brothers Produce to pose as employees of Sam LaGrasso Produce Company and enroll them as union members of Teamsters Local 337. Townsend and his co-conspirators would then enter into collective bargaining agreements between Local 337 and Sam LaGrasso Produce Company to create the appearance that the employees of LaGrasso Brothers Produce were unionized, documents show.

In exchange for his actions in preventing the unionization of employees of LaGrasso Brothers Produce by Teamsters Local 337, Townsend took bribes in the form of cash payments from LaGrasso Brothers Produce, according to the indictment.

“This defendant was a union official who was entrusted to help working people organize,” U.S. Attorney Barbara McQuade said in a statement. “He betrayed the Teamsters and workers for his own profit. We are seeking to hold him and the company accountable for their conduct.”

On January 10, 2013, Sam LaGrasso Produce Company pleaded guilty to a one count information charging that it made and agreed to make prohibited payments to a labor official. The company is awaiting sentencing where it faces a fine between $ 6.3 and $ 12.6 million. The plea agreement contains a cooperation agreement requiring corporate officers to assist in the investigation and prosecution of others and the possibility of a reduced sentence based on that cooperation.

The case was investigated by agents and officers of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations and the Department of Labor, Employee Benefits Security Administration.

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