U.S. Department of Justice

Rosa Emilia Rodríguez-Vélez
United States Attorney
District of Puerto Rico

Torre Chardon Suite 1201 (787) 766-5656
350 Carlos Chardon Street
San Juan, Puerto Rico 00918

FOR IMMEDIATE RELEASE                                                                                                Contacts: U.S. Attorney’s Office
Date: August 13, 2008                                                                                                                        Lymarie Llovet-Ayala
                                                                                                                                                          Public Affairs Specialist
                                                                                                                                                          787- 282-1820 ; 787-340-1835

JOSÉ L. CARABALLO FIGUEROA INDICTED AND ARRESTED FOR EMBEZZLEMENT OF UNION FUNDS

Forfeiture allegations for $450,000.00

San Juan, Puerto Rico- On August 6, 2008, a federal grand jury charged José L. Caraballo Figueroa, president of the Syndicate of United Workers of the South, known as the “Sindicato de Obreros Unidos del Sur de Puerto Rico” (SOUS), with two counts of embezzlement of union funds and forfeiture allegations for $450,000.00, announced ROSA EMILIA RODRÍGUEZ-VÉLEZ, United States Attorney for the District of Puerto Rico. Caraballo Figueroa was arrested this morning by FBI agents.

The indictment alleges that Caraballo Figueroa has been the President of SOUS since 1978 until the return of the indictment. SOUS is a labor organization created on or about 1964 to represent the sugar cane industry workers in the southern region of Puerto Rico, and engaged in an industry affecting commerce. Count one alleges that from December 2000 until December 2007, Caraballo Figueroa, aided and abetted by others, embezzled union funds in excess of four hundred thousand dollars ($400,000.00) from the labor organization, under the guise of receiving medical reimbursements, payment for services rendered, payment for meals and car expenses; and unlawfully and willfully converted and abstracted for his own use and the use of another, moneys, funds, securities, property, and other assets of SOUS. Count two alleges that on or about April 7, 2005, Caraballo Figueroa, again, embezzled union funds in the amount of approximately forty nine thousand five hundred dollars ($49,500.00) from the organization.

“The abuse of positions of trust by labor union leaders in order to enrich themselves at the expense of their members constitutes a serious breach of the fiduciary duties owed by the union leaders to the organization and the workers they represent. We will continue our efforts to prosecute corrupt union leaders and recover the funds which rightfully belong to the organization and its members,” stated U.S. Attorney Rodríguez-Vélez.

The maximum penalty for these charges is a term of imprisonment of 5 years, and a fine of $10,000.00 dollars. Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty. 

This indictment is the result of a joint investigation conducted by the FBI and the U.S. Attorney’s Office. The case is being prosecuted by Assistant U.S. Attorney Jenifer Y. Hernández-Vega.