Archived News Release — Caution: Information may be out of date.

U.S. DEPARTMENT OF LABOR

MARINE ENGINEERS UNION OFFICERS ORDERED TO FORFEIT $4.6 MILLION; FORMER UNION P [01/29/1996]

For more information call: (202) 219-9301

Four former officers of the Marine Engineers Beneficial Association/National Maritime Union have been ordered to forfeit $4.6 million in salary and severance payments they received between 1984-90 in the first case in which the federal government prosecuted officers of a national union for election fraud.

The four officers include C. Eugene DeFries, former president, who was sentenced today by federal district court in Washington, D.C. to more than five years and ordered to forfeit nearly $2.5 million. The former union officials were convicted of running the union as a criminal enterprise. The other three have been ordered to forfeit $2.1 million in salaries and severance payments.

The union officers were convicted of embezzling about $2 million in union funds in severance payments with the exception of one member, Alexander "Doc" Cullison. They adopted a secret severance plan without informing the members.

They also were convicted of mail fraud for soliciting ballots from members during officer and delegate elections and during a referendum on a merger with the National Maritime Union. MEBA/NMU was the largest maritime union in the U.S. and represented licensed engineers and unlicensed seamen nationwide until the merger dissolved in 1993.

DeFries and other officials were found guilty of election fraud by soliciting blank ballots from union members and then voting the ballots for themselves. Ballots were often given involuntarily under the threat that the local union hall would close without adequate member support for the incumbent officials. The union officers also were convicted of opening and discarding legitimate marked ballots and replacing them.

The other officers, Clyde Dodson, Reinhold "Fred" Schamann and Claude W. Daulley, all former executive board members of the union's predecessor organization, District One- Pacific Coast District, were ordered to forfeit the $2.1 million. In addition, DeFries' successor as union president, Alexander "Doc" Cullison, was convicted of racketeering and mail fraud, of extorting members of ballots and of forcing members to contribute to the union's political action fund.

Earlier this year on Jan. 24, Daulley was sentenced to 21 months in jail. On Jan. 26, Cullison agreed to cooperate with the government and Dodson is scheduled to be sentenced tomorrow, Jan. 30. A sentencing date has not yet been set for Schamann, who also is cooperating.

Three other union officials have already pled guilty and nine other officials are awaiting trial for related charges.

The investigation was conducted by the U.S. Labor Department's Inspector General's Office of Investigations and the Federal Bureau of Investigation in conjunction with the Organized Crime and Racketeering Section of the U.S. Justice Department's Criminal Division.

The Office of Inspector General maintains a headline to receive allegations of fraud, waste and abuse in Labor Department programs. The hotline also accepts complaints regarding criminal activity with labor unions, employee benefit plans and labor-management relations. The toll free headline is 1-800-347-3756.

Archived News Release — Caution: Information may be out of date.