Prosecutors Say McLain, Partner Ran Pension Scheme
DETROIT (AP) _ Federal prosecutors say former Detroit Tigers pitcher Denny McLain and a business partner ran a scheme to take $3 million from the pension fund of a meatpacking plant for business debts and personal use.
But attorneys for McLain and his partner, Robert Smigiel, said they were used as fall guys by financial adviser Jeffrey Egan, who set up the plan using a false name and hid $550,000 from them.
The two sides laid out their cases during opening arguments Wednesday in U.S. District Court. McLain, Smigiel and Egan were indicted in May on four federal charges: conspiracy, theft from a pension plan, money laundering and mail fraud.
Egan, 36, later pleaded guilty to pension plan theft and agreed to help prosecutors in return for a lighter sentence. Defense attorneys made that agreement a focus of their arguments.
Thomas Cranmer, Smigiel’s lawyer, pointed to an empty chair next to the defense table and said the case was about ``Jeffrey Egan, who he said should be sitting in the chair.
Assistant U.S. District Attorney Steve Robinson said McLain and Smigiel panicked when the money they needed to buy Peet Packing Co. ran short.
``The way McLain and Smigiel resolved their financial problem was by stealing $3.06 million from the Peet Packing pension plan,″ Robinson said.
The two sides do not dispute many basic facts. In August 1993, McLain, 52, came to Smigiel, 45, with a plan to buy the struggling meat-packing business in Cheasaning.
When the deal was finished in January 1994, they faced a host of money problems. With Egan’s help, the two men were named trustees of the $12 million employee pension fund, even though company rules required the trustee to be a bank.
In February 1994, Egan put $3.06 million from the fund into the accounts of two shell companies. About $2.5 million ended up in Peet accounts, and $1.4 million was used by McLain and Smigiel for investments and personal expenses.
Egan, using the alias Steven Bandis, secretly invested the rest.
Bank officers and union officials from the plant began to question the pension accounts in July and August 1994. The company went out of business in the summer of 1995.
Robinson admitted Egan designed the scheme _ but only after McLain and Smigiel pleaded for help.
``He then proposed the plan to divert the money for three months, and pay it back without anyone knowing about it,″ Robinson said. ``He told them `it’s illegal, but we would never get sent to jail.′
``Unfortunately for Egan, McLain and Smigiel kind of forgot about that part.″
Defense attorneys say it was Egan who arranged the scheme in hopes of eventually managing the pension fund. They also said McLain and Smigiel left a long paper trail, while Egan went to great lengths to hide his role.
If convicted, McLain and Smigiel face up to 20 years in prison and a $500,000 fine on the money laundering charge alone. Egan faces up to 30 months in prison and a fine of $250,000 or twice the gross gain or losses caused by his crime.
McLain pitched for the Tigers from 1963-70, winning 31 games in the 1968 season, the most recent to accomplish that. McLain won the American League Most Valuable Player and Cy Young awards in 1968 and shared the 1969 Cy Young Award with Baltimore’s Mike Cuellar. His last major league season was 1972, when he was 28.
McLain was sentenced to 23 years in federal prison for racketeering, extortion and drug charges in an unrelated matter a decade ago. But he was released in 1987 because an appeals court ruled he didn’t get a fair trial. He had served about two years in jail.