Former Union Boss of Operating Engineers Local 324 Pleads Guilty to Extortion

 John Hamilton, the former top elected official of the 18,000 member Operating Engineers Local 324, International Union of Operating Engineers, pleaded guilty today to conspiring to commit extortion, Acting United States Attorney Daniel L. Lemisch announced.  

Hamilton, 62, of Rivera Beach, Florida, admitted to conspiring to violate the Hobbs Act with at least two other former top Local 324 officials. Hamilton admitted forcing business agents and other employees of Local 324 to each pay kickbacks of over $5,000 from their salaries per year into what was called the “Team Hamilton Slate Fund.” Ostensibly, the slate fund was to be used for union election campaign expenses. However, Hamilton instead used a significant portion of the money that was forced from union business agents for his own personal benefit. Hamilton threatened union employees with termination if they complained about the payments to his slate fund. In fact, in 2010, Hamilton fired one business agent who had complained about the payments to Hamilton’s 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. After losing re-election in an August 2012 membership vote, Hamilton then proceeded to pocket for himself $71,000 from his slate fund, as well as distributing over $35,000 each to Steven Minella and David Hart, two other top Local 324 officials.

As part of his guilty plea, Hamilton agreed to pay $250,000 in restitution to the victims of his crime. 

In 2015, Minella, the former Local 324 President, and Hart, the former Local 324 Financial Secretary, both pleaded guilty to felonies for helping to conceal Hamilton’s scheme. Both Minella and Hart are scheduled to be sentenced on October 10, 2017.

Local 324 represents heavy equipment and crane operators throughout Michigan. Hamilton served as the Business Manager of the union, its top elected official, from 2003 through 2012. The union is headquartered in Bloomfield Township, Michigan.

Lemisch was joined in the announcement by James Vanderberg, the Special Agent in Charge of the Department of Labor, Office of Investigations—Labor Racketeering and Fraud, Special Agent in Charge David P. Gelios of the Federal Bureau of Investigation’s Detroit Division, Ian Burg, District Director of the Department of Labor, Office of Labor Management Standards, Manny Muriel, Special Agent in Charge of the Detroit Field Office of the Internal Revenue Service, Criminal Investigation, and L. Joe Rivers, Regional Director, Cincinnati Regional Office, Employee Benefits Security Administration.

“Union officials should be dedicated to promoting the best interests of their rank and file members, not their own personal enrichment,” Acting United States Attorney Lemisch said. “This prosecution demonstrates that union officials will be held to account if they abuse their positions of trust to force their employees, under threat of termination, to pay kickbacks to their union bosses.”

"John Hamilton was the top elected representative of more than 18,000 members of the International Union of Operating Engineers Local 324. Hamilton conspired to extort fellow union officers and members of $250,000, under the threat of being fired, and used much of the money to personally enrich himself. We will continue to work with our law enforcement partners to stop extortion plots that victimize American workers," stated James Vanderberg, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General.

"John Hamilton selfishly abused his position by extorting and bullying union members into contributing money for his own benefit, and, in the process, destroyed the trust of those he was elected to represent,” said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “The FBI is committed to fight all forms of corruption. As evidenced in this investigation, today' guilty plea demonstrates collaboration among law enforcement partners makes it far more likely that leaders in the labor union movement who illegally profit at the expense of their membership will be held to account for their crimes."

“Protecting financial integrity and combatting corruption in labor unions is a very high priority for OLMS,” said Ian Burg, Director of the Office of Labor-Management Standards (OLMS) Detroit-Milwaukee District Office. “This information and plea agreement send a clear message that OLMS will fully investigate and seek justice when anyone attempts to use their union position for personal financial gain.”

“This is yet another example of Union Officials abusing the power and responsibilities entrusted on them,” stated Manny Muriel, Special Agent in Charge of IRS Criminal Investigation Detroit Field Office. “John Hamilton acted no differently than a school yard bully, when he threatened the members of Local 324 with termination of their union jobs if they did not make weekly payments into the fund. The IRS and its partners will continue to work to protect the integrity of the unions.”

“This defendant abused his position for his own benefit and jeopardized the trust of many individual workers. EBSA is committed to holding employee benefit plan officials accountable for their actions,” stated L. Joe Rivers, Regional Director, Cincinnati Regional Office, Employee Benefits Security Administration.

Upon conviction for a violation of Title 18, United States Code, Section 371, conspiracy to interfere with commerce, Hamilton faces a maximum of five years in prison and a fine of up to $250,000.

The case was investigated by agents of the Department of Labor, Office of Investigations—Labor Racketeering and Fraud, the Office of Labor Management Standards, the Employee Benefits Security Administration, the Internal Revenue Service—Criminal Investigations, and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys David A. Gardey and Dawn N. Ison.