- The Washington Times - Friday, February 7, 2003

The first person to be convicted in the Washington Teachers' Union scandal will cooperate with investigators seeking to indict other union officials involved in the embezzlement of $5 million.
Under a plea agreement, Leroy Holmes, 52, pleaded guilty in U.S. District Court yesterday to one charge of conspiracy to launder more than $1 million in illegal proceeds. He faces up to 20 years in prison and a $500,000 fine but is expected to receive a lesser sentence April 15.
"Upon his guilty plea, Mr. Holmes will cooperate fully, candidly and truthfully with any current and future federal or local law enforcement investigation," said Lou Martucci, attorney for Mr. Holmes, as the two stood before U.S. District Judge Richard J. Leon.
Channing Phillips, spokesman for U.S. Attorney Roscoe Howard Jr., said Holmes "realistically faces anywhere from 30 to 37 months under the federal sentencing guidelines we are using because he is a first offender and is cooperating with us."
Federal and local law enforcement agencies are investigating former union President Barbara A. Bullock; her executive assistant, Gwendolyn M. Hemphill; and former union Treasurer James O. Baxter II in a probe of millions of dollars missing from the 5,000-member teachers union.
Holmes served as Miss Bullock's chauffeur and handyman, earning about $500 a week beginning in 1995. By 1997, he was earning nearly $90,000 a year. He also received about $7,000 from the union to buy a Cadillac.
Between 1997 and last year, Holmes cashed more than 16 checks several for amounts exceeding $10,000 and gave the money to Miss Bullock, Mrs. Hemphill and Mr. Baxter, according to court statements by Assistant U.S. Attorney James W. Cooper.
Miss Bullock, Mrs. Hemphill and Mr. Baxter have denied any wrongdoing.
Neither Mrs. Hemphill's attorney, Frederick C. Cooke Jr., nor Miss Bullock returned calls seeking comment yesterday.
Holmes was the first person to be indicted in the embezzlement investigation.
Under the plea agreement, the U.S. attorney will not seek to prosecute Holmes for any other crime he may have committed in the embezzlement scheme, Mr. Martucci said. The Justice Department's tax division has waived any criminal prosecution against him for tax evasion.
Holmes, who did not report his true income in his tax returns, will have to amend his returns for 1999 and 2000, and pay back taxes and penalties. His employment was hidden from the Labor Department, to which the union must report all salaries and disbursements.
The parent union for the local union, the American Federation of Teachers, filed a lawsuit last month against the three former officials and four others, including Holmes.
The AFT has accused them of embezzling more than $5 million after it conducted a forensic audit of the local's books last year.
"That's why more charges haven't been filed in the case, because more and more leads we have to follow like that are coming up as we investigate," Mr. Phillips said.

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