Ex-Michigan union leader accused of receiving kickbacks

Robert Snell / / The Detroit News

Detroit— The former head of the Michigan Council of Carpenters was accused today in federal court of accepting kickbacks from a casino consultant and a Chicago businessman who donated $10,000 to ex-Mayor Kwame Kilpatrick's nonprofit foundation.

The former union official, Walter Ralph Mabry, was charged with fraud in connection with kickbacks he received from April 2004 through September 2006. They were paid by casino consultant Joseph "Roxy" Jewett and John Orecchio, a Chicago businessman, according to federal records.

The charge, punishable by up to three years in prison, comes one week after Mabry, 65, was freed from federal prison after serving a sentence for receiving illegally discounted work on his Grosse Pointe Park home.

Jewett was sentenced last year to one day in jail for paying a kickback in 2006 to Mabry, who served as executive secretary-treasurer of the carpenters union and chairman of its pension fund board.

The kickback — a one-third share of an $800,000 investment Jewett made in a power drink company — was for investing union pension funds in a Biloxi, Miss. casino project, according to court testimony.

Jewett received more than $1 million in consulting fees for his role in the deal, which was brokered through the Chicago investment firm AA Capital.

AA Capital was headed by Orecchio, who pleaded guilty in February 2010 to wire fraud and theft from an employee benefit plan in federal court in Illinois.

He admitted misappropriating more than $24 million invested by the carpenters and other union pension funds, spending the money on over $1 million worth of jewelry, luxury cars, travel, gambling and renovating a Detroit strip club, among other items.

Orecchio told investigators he got an audience with former Detroit Mayor Kwame Kilpatrick after writing a $10,000 check to his nonprofit foundation, the Kilpatrick Civic Fund. Kilpatrick then took the unusual step of personally appearing with Orecchio before a city pension board while Orecchio made a pitch for a multimillion-dollar investment in his company, records show.

The pension fund approved the investment, though it did not ultimately go ahead.

As part of his plea deal, Orecchio was cooperating with a federal investigation into Kilpatrick, his civic fund and two public Detroit pension funds.

Kilpatrick was indicted June 23 on 19 fraud and tax counts and accused of turning the Kilpatrick Civic Fund charity into a personal slush fund. He also was indicted in a City Hall corruption case in December involving millions of dollars and alleged kickbacks from city contractors.