U.S. Dist. Judge Anna J. Brown (D. Or., Clinton) sentenced racketeer and tax-evader John D. Abbott, ex-secretary-treasurer and business manager of the Laborers' Int'l Union of N. Am.'s Dist. Council of Or., S. Idaho, and Wyo., Nov. 21 to two concurrent terms of 15 months in prison and one year probation. He must pay $195,400 in restitution plus back taxes. He was an official for 5 LIUNA funds.
He pled guilty on Feb. 26 to accepting gratuities from union fund manager Jeffrey L. Grayson (indicted Oct. 2) to use his influence as a pension trustee and filing a false tax return. Abbott pled guilty to racketeering charges, under 18 U.S.C. § 1954, and to understating his income on his 1997 tax return by $76,560. He earned the shortened sentence in exchange for cooperating against other trustees and Grayson in the massive $355 million Capital Consultants scam. Laborers lost about $25 million.
Asst. U.S. Atty. Lance Caldwell, told Brown that Abbott's testimony has been crucial in building the case against Grayson who was indicted on 22-counts. of conspiracy, witness tampering, money laundering, mail fraud, and making illegal payoffs to Abbott. Because of Abbott's cooperation, and the "very valuable" evidence it produced, the government recommended reducing his sentence from a maximum of 33 months.
Grayson assisted Abbott in 1998 when he was in trouble with LIUNA for allegedly pocketing office funds and failing to make restitution. Abbott, according to an audit released in Mar. 1998, took at least $172,000 from office funds including $150,184 in personal charges on his union credit card. As Abbott was being pushed to explain what the audit uncovered, Grayson arranged the sale of Abbott's late wife's catering business, netting the union boss $60,000.
Abbott repaid the unauthorized credit card charges and promised LIUNA that he would pay back the rest of the money, nearly $32,000. But he failed to make payments, and in Sept. 1998, LIUNA gave him the choice of resigning or being expelled. Abbott chose to quit and promised once more to reimburse the money he owed. Meanwhile, he organized a consulting company, Kaylano Consulting, and signed a contract with Grayson that promised to pay Kaylano at least $805,000 over 5 years.
Not everyone thought Abbott's 15-month sentence was sufficient. Gayland German, a retired Oregon LIUNA member who attended the hearing, later called Abbott "a Judas" and predicted his fellow union members "will be extremely disappointed" with the length of his sentence.
Forrest Rieke, Abbott's attorney, portrayed his client as just one of 10 trustees with no more and no less clout than the rest. He called Lee Clinton, Abbott's successor at the Dist. Council, to the stand, to testify that he saw no evidence of Abbott favoring Grayson in the placement of union money. But Clair Anderson, another ex-LIUNA boss who served on several trusts with Abbott, disagreed, telling the Oregonian after the sentencing that Abbott effectively controlled the trusts as well as the union. "He ruled with a strong hand," Anderson said. "He had influence with every damn local in the state."
Rieke told Brown that his client "simply has no money," and the judge agreed that he could work out a payment plan. Clinton estimated that Abbott receives between $8,000 and $10,000 a month in union pension payments. Abbott will report to prison on May 1, which will give him time to testify at Grayson's trial scheduled to begin Mar. 26.
Abbott's sentencing came 24 hours after Brown sentenced Grayson's son, Barclay, Capital Consultants' president, to 24 months imprisonment and 3 years probation for mail fraud. He pled guilty on Mar. 19 and is also cooperating. [DOL 11/20, 11/21/01; Oregonian 11/22/01; BNA 11/23/01]