Six people, including three Orange County residents, have been indicted on federal charges of embezzling about $1.5 million from a Long Beach Teamsters Union health plan fund. The indictment, handed down by a federal grand jury in Los Angeles late Tuesday, accuses health-plan administrator Matthew W. McCusker, 67, of Encino and five others of embezzlement, mail fraud and wire fraud. The six are accused of looting and defrauding the Western Conference Benefits Trust and the Continental Organization of Medical, Professional and Technical Employees Trust between 1979 and 1981.
Both trusts have been forced into receivership, prompting a civil suit by the Department of Labor. The suit alleges that because of embezzlement, the fund was unable to pay millions of dollars in medical bills.
The Orange County defendants are:
- Nicholas M. Nicholson, 38, and his wife, Dana, 37, of San Clemente. The Nicholsons administered the Western Conference trust through a company called Far West Administrators Inc.
- Elwyn L. Raffetto, 50, of Huntington Beach, who was involved in marketing the plan to non-Teamster employee groups, according to the indictment.
Malibu Couple Named
The indictment also named Gordon F. Eldredge, 51, and his wife, Sharon, 41, of Malibu. Eldredge marketed the trust program to employee groups through a company called Westwide Financial Services, the indictment said.
Those indicted either worked for the plan or its subsidiaries.
Asst. U.S. Atty. Leon Weidman said that arrest warrants have been issued for some defendants but declined to elaborate. Most of the defendants are scheduled to be arraigned Feb. 10.
The Western Conference, established in 1974, was a health and benefit plan set up for members of Teamsters Local 911 in Long Beach, according to Weidman. The Continental trust was created in 1980 as a subdivision of the Western trust. Local 911 had collective bargaining agreements with school districts, cities and parking lot companies, among others.
Alva Dotson Bennett, board chairman of both trusts and the former secretary-treasurer of Local 911, was not indicted, but he pleaded guilty last month to embezzling $130,000 from the trusts. Bennett, 51, of Huntington Beach, is scheduled to be sentenced Feb. 3.
The six indicted Tuesday allegedly recruited employees not associated with Teamsters Local 911 by greatly exaggerating the size of the fund. For example, in 1979, the defendants allegedly told potential members that the Western Conference had $34.5 million in contributions, when in fact contributions were only $1.1 million. They also represented that the trust had 200,000 to 300,000 participants, when on Dec. 31, 1979, it had only 3,692 members, according to the indictment.
McCusker is accused of embezzling $575,705 for the use of himself and others, including $64,900 diverted to Raffetto. Eldredge is accused of embezzling $965,558, including $469,560 paid to Nicholson, according to the indictment.
The indictment also charges the Nicholsons, Eldredges and McCusker with filing false federal income tax returns.