Carey, 64, who took charge of the union as a reform candidate pledging to clean up its long history of corruption, won re-election in December 1996 by narrowly defeating James P. Hoffa, the son of legendary Teamster boss Jimmy Hoffa who disappeared in 1976, the apparent victim of an underworld hit.
In the wake of the fundraising scandal, government-appointed election monitors invalidated the Carey victory, ordered a new election and barred Carey from running again.
The union subsequently expelled Carey, a member for 40 years since his first job as a UPS truck driver in Queens.
Hoffa beat two other candidates in the December 1998 vote and assumed leadership of the union on May 1, 1999.
In the illegal fundraising scheme, Carey's '96 campaign received several hundred thousand dollars in tainted funds. In a classic kickback scheme, several liberal groups received large donations from the Teamsters treasury totally $885,000, and those groups in turn made or arranged for reciprocal contributions to the Carey campaign.
Carey's former campaign manager, Jere Nash, and a political consultant, Martin Davis, pleaded guilty to charges stemming from the scheme in September 1997. Carey has said he was not aware of the scheme, which included a single donation of $475,000 to Citizen Action, one of the Teamsters' largest political contributions. "I have done nothing wrong," Carey told reporters November 17, 1997, when he was disqualified from the re-vote. He later told the union's Independent Review Board he had no memory of diverting funds to political groups.
Carey was the first Teamster president in the union's history to be directly elected by the union's rank and file. The secret ballot in the U.S.-government supervised election in 1991 came after a 1989 agreement between the union and the Justice Department, a "consent decree" whereby the union promised to end its mob ties and the government agreed to drop pending racketeering charges.
In a statement reacting to the charges, Carey attorney Mark Hulkower said: "Mr. Carey is not guilty of these charges, and we will vigorously defend him." Carey's arraignment in U.S. District Court is scheduled for February 1.CNN Justice Department Producer Terry Frieden contributed to this report