Charges come following an internal union audit discovered second bank account.
Norfolk, VA—A former business agent and financial secretary of the International Longshoremen’s Association, Local 970 is facing a fine and up to 20 years in prison if, as expected, he pleads guilty for stealing $1 million from his former union.
From 2002 to 2016, Robert Smith III was responsible for handling new member initiation fees of $1,500, along with dues collected through a 4 percent authorized deduction from members’ pay.
However, he did more than that, according to the U.S. Attorney’s office.
Employers of dockworkers withheld the dues from union members’ pay and typically sent “checkoff” checks through the U.S. mail to the Local 970 office on a monthly or quarterly basis.
In 2005, Smith determined that the union needed a second bank account, at a different bank, because the balance in its existing account typically topped a federal insurance limit of $100,000. After Smith opened a second account, the limit was raised to $250,000, but the new account was not closed.
Smith and another union officer were signers on the second account; however, the other officer “eventually retired leaving Smith as the only signatory on the account,” according to the court filing. For a decade starting in early March 2006, Smith regularly deposited member initiation fees and dues checks into the second of the two bank accounts “and embezzled those funds for his own personal use,” according to the court case.
Smith resigned from his position in April when an internal audit found the second account.