Washington, D.C.-Area LIUNA Ex-Business Manager, Two Contractors Charged with $1.7M+ in Thefts

liuna logoIt’s hard to imagine theft from an American labor union having anything to do with Arab politics.  But federal prosecutors are convinced they have found a connection.  And that’s not the only problem in this case.  Yesterday, on October 28, the FBI and the Labor Department announced the indictment of three Maryland men – Anthony Frederick, Gary Cooper and Christopher Kwegan – for theft, fraud, money laundering, and bribe-taking related to the disappearance of more than $1.7 million from the Washington, D.C.-based Laborers International Union of North America (LIUNA) Local 657.  Frederick is a former business manager of the union; Cooper and Kwegan are co-owners of a Greenbelt, Md.-based construction firm, STS General Contracting.

According to the indictment, during May 2013-June 2014 Anthony Frederick, 49, a resident of Upper Marlboro, Md., used his position as business manager for Laborers Local 657 to divert more than $1.7 million in local funds to STS General Contracting without the knowledge or authorization of the union executive board.  A routine union audit in June 2014 had revealed that Frederick had paid nearly $1.1 million to STS for what amounted to minimal renovations of the Local 657 administration building.  In addition, Frederick allegedly directed over $580,000 from the union to the contractor for expediting the issuance of construction permits for a new local training center.  Previously, this task had fallen upon another construction firm.  There was more.  Prosecutors also are accusing Frederick of grossly overpaying STS for expediting other permits, including $20,000 for a $143 excavation permit and more than $20,000 to renew several existing permits that could have been done for $250 each.

Gary Cooper and Christopher Kwegan, respectively, ages 56 and 58, residents of Upper Marlboro and Randallstown, Md., also apparently got into the act.  The pair allegedly used stolen Local 657 funds to make a down payment on a $225,000 home purchased by Frederick and to pay for the construction of a three-car garage on the property.  They also directed more than $600,000 in union funds to a corporation partly owned by Frederick’s wife.  Cooper and Kwegan allegedly also depleted a company bank account containing more than $500,000 whose only depositor was Local 657.  About $172,000 went toward an electrical engineering services firm located in the Persian Gulf state of Qatar, an absolute Islamic monarchy, with the reported objective of building opposition political parties.  The remaining funds went for shopping, entertainment, travel and other indulgences.  Dues-paying members probably are wondering what had gotten into their union.