The Labor Department yesterday sued the trustees of the Las Vegas culinary union's pension fund and the estate of the fund's slain boss for making allegedly illegal loans to financially distressed businesses controlled by Morris Shenker, owner of the Dunes Hotel.
The lawsuit, filed in Las Vegas under the 1974 pension reform law, seeks to stop any further payments to Shenker, remove the trustees from office and order them to repay "all money unlawfully paid out." The suit also seeks to cancel the loan agt's top attorney, said in a statement that the loans violated the federal pension law which requires that trustees "act prudently and solely in the interest of plan participants" and that they diversify plan assests to avoid the risk of large losses.
Among the defendants named in the suit were Shenker and the estate of Al Bramlet, who was a trustee of the pension plan and head of Local 226 of the International Hotel, Motel, Restaurant and Bartenders Union.
Bramlet's body was found in the desert near Las Vegas earlier this month's a few days after his mysterious disappearance.
His local has 22,000 members who staff the hotels and restaurants in Las Vegas, including the Dunes. Bramlet, 59, had also served as president of the Nevada State AFL-CIO.
Shenker, an attorney, has been associated with the Teamsters union's Central States Pension Fund, which has been under federal investigation for more than 18 months.
The Labor Department forced the Teamsters fund last year to call off a planned $40 million loan to Shenker for an expansion of the Dunes Hotel.
The Teamsters fund isn't related to the culinary union.
The Labor Department's suit against the culinary workers' fund alleged that more than half of the plan's assets were loaned to Shenker controlled corporations which were "financially distressed and delinquent in payment of other loans."
A department spokesman said the assets totaled $42.5 million, of which $31 million was loaned to two Shenker operations, Murrieta Hot Spring, a California corporation, and Sierra Charter Corp. of Nevada. Both are engaged in real estate development.