Union Treasurer, a Police Officer, Also Charged With Obstruction of Justice and False Statements
LawFuel – Audrey Strauss, Acting United States Attorney for the Southern District of New York, William F. Sweeny Jr., Assistant Director-in-Charge, New York Division, Federal Bureau of Investigation (“FBI”), and Andriana Vamvakas, Northeastern Regional Director, U.S. Department of Labor Office of Labor-Management Standards (“DOL-OLMS”), announced the arrest of KENNETH WYNDER Jr., a former New York State Trooper and the president of the Law Enforcement Employees Benevolent Association (“LEEBA”), a labor union for law enforcement officers employed by the City of New York (the “City”), for defrauding union members by misappropriating money from LEEBA’s Annuity Fund. STEVEN WHITTICK, LEEBA’s treasurer and a police officer for New York City’s Department of Environmental Protection (“DEP”), was charged separately with obstructing the investigation into fraud in connection with LEEBA and the Annuity Fund and making false statements to federal agents. Both defendants are expected to appear before U.S. Magistrate Judge Robert W. Lehrburger in Manhattan federal court this afternoon.
Acting U.S. Attorney Audrey Strauss said: “Today we have charged two leaders of a union that represents local law enforcement officers for engaging in criminal conduct, something they and their membership are sworn to combat. As alleged, Kenneth Wynder abused his position as the union’s president and its annuity fund’s administrator and trustee to raid his members’ retirement accounts. As further alleged, Steven Whittick, the union’s treasurer, took repeated steps to obstruct a federal investigation aimed at uncovering those financial improprieties.”
FBI Assistant Director William F. Sweeny Jr. said: “As alleged, both law enforcement and civilian members of multiple city agencies had their retirement savings compromised by two individuals who prioritized their own financial well-being over that of the hardworking men and women who dedicated their livelihood to serving the public. Most people only get one chance to put aside enough money to last them into retirement. To think the money these individuals worked so hard for could allegedly be swindled by the very people who play a role in managing it is disturbing beyond belief. Today’s arrests bring us one step closer to making sure justice is served in this case.”
DOL-OLMS Northeastern Regional Director Andriana Vamvakas said: “Union officials are required to use the union’s funds only for legitimate purposes, not their own personal gain. Financial misappropriation by union officials not only breaks the law, it betrays the trust placed in them by their membership. OLMS was proud to work with its partners at the Office of the U.S. Attorney for the Southern District of New York and the Federal Bureau of Investigation in investigating this case.”
According to the allegations contained in the two Complaints unsealed in Manhattan federal court, publicly available information, and prior court filings:
Law Enforcement Employees Benevolent Association and the Annuity Fund
LEEBA is a labor union that has acted as the collective bargaining representative principally for law enforcement personnel at various City agencies, and has entered into agreements on behalf of those law enforcement employees, including agreements for insurance and retirement benefits. The City agencies whose employees LEEBA represented included, at various times, the Department of Environmental Protection (“DEP”), the Department of Sanitation (“Sanitation”), and the Department of Transportation (“Transportation”).
The Annuity Fund is a LEEBA fund that received monthly contributions from the City for the benefit of LEEBA’s members, and maintained separate accounts for each fund member. These accounts were functionally similar to employer-sponsored 401(k) retirement accounts. Both WYNDER and WHITTICK were Trustees of the Annuity Fund and signatories to agreements that governed the fund. Under the relevant agreements and plans, the money in the Annuity Fund could be used for no purpose other than funding individual members’ retirement accounts and defraying reasonable administrative expenses of the Annuity Fund itself.
WYNDER, a former New York State Trooper, is the President of LEEBA and a member of LEEBA’s board of directors. WYNDER has also served as the Fund Administrator of the Annuity Fund and as a member of the board of trustees of the Annuity Fund, pursuant to which he owed a fiduciary duty to act in the best interests of the Annuity Fund and its account holders. WYNDER also was on the board of trustees of the LEEBA Welfare Fund (the “Welfare Fund,” and collectively with the Annuity Fund, the “LEEBA Funds”), which provided supplemental insurance benefits to its members. While occupying those positions, WYNDER centralized and controlled major decision-making authority for LEEBA and the LEEBA Funds, often acting without the proper approval of their respective boards of directors or trustees. WYNDER’s de facto dominance of LEEBA and the LEEBA Funds enabled him to make decisions in his own self-interest and contrary to the interests of the Annuity Fund and individual members.
WHITTICK, a DEP police officer, is the Treasurer of LEEBA, and a member of the board of directors of LEEBA and the boards of trustees of the LEEBA Annuity Fund and the LEEBA Welfare Fund. As LEEBA’s Treasurer, WHITTICK had responsibility for LEEBA’s financial matters and accounts, arranging for LEEBA to pay its payroll through an outside payroll processing firm starting in 2016, as well as having signatory authority over LEEBA’s main operating bank account.
WYNDER’s Alleged Fraud Scheme
From at least in or about 2012 up to and including the date of this Complaint, WYNDER participated in a scheme to steal, embezzle, and misappropriate money from the Annuity Fund and individual members’ retirement accounts. Specifically, WYNDER made hundreds of thousands of dollars of fraudulent transfers from the Annuity Fund to LEEBA’s operating account, which he controlled, and regularly used the funds, once transferred from the Annuity Fund, to enrich himself at union members’ expense, including through unauthorized and excessive checks to himself and cash withdrawals for his own benefit. In addition, WYNDER caused the union to pay for various personal expenses such as a second residence, clothing, travel expenses, and the purchase of a personal automobile, all paid for by the union, and none of which were contemporaneously reported to the Internal Revenue Service (“IRS”), as required.
To accomplish this fraudulent scheme, WYNDER, acting in his capacity as the Annuity Fund’s Plan Administrator, repeatedly made false and misleading statements to a third-party retirement plan manager that served as the custodian for the Annuity Fund and the retirement accounts of individual union members, including through emails and faxes that WYNDER used to withdraw increasingly large sums of money from the Annuity Fund, effectively causing such withdrawals to be made from the retirement accounts of individual members. From in or about 2014 through in or about 2019, WYNDER caused the withdrawal of more than $500,000 from the individual retirement accounts that constitute the Annuity Fund, thereby wiping out the entire balance of certain members’ accounts. Without these improper withdrawals from the Annuity Fund, the LEEBA operating account would have been insolvent, and would have had insufficient funds to pay for WYNDER’s excessive checks to himself and cash withdrawals and the personal expenses he caused to be charged to that account.
In addition, throughout the duration of this scheme, WYNDER repeatedly made and approved false and misleading statements to LEEBA’s members and prospective members about how he was purportedly using and protecting their retirement accounts and the LEEBA Annuity Fund. WYNDER further concealed his scheme by causing LEEBA to fail to timely file mandatory reports and financial disclosures with the City and public reports to the Annuity Fund’s members, and by making false statements to the Annuity Fund’s auditors and accountants.
WHITTICK’s Alleged Obstruction of Justice
From at least in or about 2017 through in or about August 2019, while serving as LEEBA’s Treasurer, and after learning of the federal investigation into LEEBA’s finances including the embezzlement scheme described above, WHITTICK repeatedly lied to federal agents in an effort to obstruct that investigation. WHITTICK did so despite personal involvement in some of the financial improprieties with which WYNDER is charged. For example, as alleged, on at least two occasions, on or about February 1, 2018, and March 30, 2018, WHITTICK withdrew $16,000 in cash from a LEEBA bank account, and on each occasion deposited $15,000 cash into WYNDER’s personal bank account and $1,000 cash into WHITTICK’s own personal bank account.
After the FBI had executed a search warrant of LEEBA’s offices in September 2019, WHITTICK attempted to obstruct and to influence the ongoing federal investigation by making, in two different interviews with law enforcement agents, false statements about, among other subjects, cash withdrawals he made from LEEBA’s bank accounts, unauthorized withdrawals from LEEBA’s Annuity Fund and from members’ individual accounts, and LEEBA’s payment for certain travel and entertainment expenses for union officers, including WHITTICK and WYNDER.
* * *
WYNDER, 56, of Stroudsburg, Pennsylvania, is charged with one count of wire fraud, which carries a maximum penalty of 20 years in prison.
WHITTICK, 50, of Kingston, New York, is separately charged with one count of obstruction of justice, which carries a maximum penalty of 20 years in prison, and two counts of false statements to federal investigators, each of which carries a maximum penalty of five years in prison.
The maximum potential sentences in these cases are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Ms. Strauss praised the outstanding work of the FBI and the Department of Labor OLMS. Ms. Strauss also thanked IRS-Criminal Investigations, the New York City Comptroller’s Office, and the New York City Department of Investigation for their assistance.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys David Raymond Lewis and Eli J. Mark are in charge of the prosecution.
The charges contained in the Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
 As the introductory phrase signifies, the entirety of the text of the Complaints, and the description of the Complaints set forth herein, constitute only allegations, and every fact described therein should be treated as an allegation.
More from LawFuel
- Tompkins Wake Celebrate Their CentenaryThe largest law firm in Hamilton is one credit claimed by Tompkins Wake, but its …
- Has The Big Law Bonus Boom Ended, As Firms Ease Up On PaymentsThe bonuses may have been big an growing in the past couple of years, but …
- The Challenges & Changing Face Of New Zealand Law FirmsPutting the 2022 LawFuel Power List together revealed some of the challenges and developments occurring …
- Fast Growing Aussie Law Firm Expands to New ZealandFast-growing Australian law firm Hamilton Locke is expanding its operations to New Zealand, with the …
- Australian Banks Settle Slater & Gordon Class ActionThree of Australia’s big four banks have settled class action lawsuits following an action brought …
- Law Firm Profits Shrink and Layoffs LoomA new report indicates tougher times ahead for law firms as they take a gloomy …
- Meredith Connell Recruit Clifford Chance COO As Chief ExecutiveMeredith Connell have recruited former Chief Operating Officer for the UK at Magic Circle law …