>Dennis Talbott, trustee and officer, was sentenced to three years of probation and fined $1,000. John Lontine and Robert Mayhew, also trustees and officers, were sentenced to a year of probation and fined $1,000 each. The illegal gratuities received by Talbott, Lontine and Mayhew were hunting and fishing trips in Montana, New Mexico and Alaska paid for by Capital Consultants. Lontine also received season tickets to professional football and baseball games in Denver, Colorado, according to the Department of Labor (DoL).
Talbott entered a guilty plea on November 18, 2002, to felony charges that he accepted a gratuity from Capital Consultants in connection with his duties as a trustee to the Tri-County Building Trades Health Fund and the Sheet Metal Workers Local Pension Plan based in Cleveland, Ohio. Lontine and Mayhew entered guilty pleas on September 5, 2002, to misdemeanor charges that they knowingly and willfully caused false reports to be filed on behalf of plans for which they served as trustees. The falsification related to failure to include required disclosures about the gifts received from Capital Consultants , which was managing the assets of the funds. The defendants were trustees of the affected benefit plans by virtue of the union offices they held.
Lontine is a former trustee of Sheet Metal Workers Local 9 Pension Plan based in Lakewood, Colorado. Mayhew previously served as trustee for the IBEW Eighth District Pension Fund based in Aurora, Colorado.
>Additionally, based on their criminal convictions, the defendants are each barred for 13 years from serving in a fiduciary capacity or consultant to pension and other employee benefit plans covered by the Employee Retirement Income Security Act (ERISA). Further, Talbott was barred from serving as an officer, employee or representative of any labor organization or in any capacity with decision-making authority concerning labor union funds or assets for 13 years.
Capital Consultants has been in receivership since being sued by the department and the Securities and Exchange Commission (SEC) in September 2000. In March 2004, the department obtained consent orders requiring payment of $4.875 million to 12 plans in California, Nevada and Utah plus $975,000 in civil penalties (See DoL Reaches $4.8M Capital Consultants Settlements ).
Since April 2002, the DoL has sued trustees of 19 additional union plans in Oregon, Idaho, Colorado, Ohio and Minnesota for authorizing imprudent investments with criminal convictions. Criminal charges have been filed against 11 individuals (SeeLabor Department Sues Trustees Of Union Health Plans). Nine have been convicted or have entered guilty pleas.