As a Certified Fraud Examiner, Salvatore Armao knew he was in no position to do anything but plead guilty. And he did just that. Last Thursday, August 2, Armao, founder and managing partner of a Long Island, N.Y.-based accounting firm, Armao LLP, pleaded guilty in U.S. District Court for the Southern District of New York to falsifying financial records he had filed with the Department of Labor in order to conceal a scheme to conceal the embezzlement by an unnamed labor union president of more than $100,000 from a union benefit plan. Armao and a principal officer of his firm, Karen Auer, had been charged on June 1 with aiding and abetting the theft. The actions follow a probe by the FBI, the Labor Department’s Office of Inspector General and Employee Benefits Security Administration and the Justice Department.
According to prosecutors, the president of the unnamed union, who also served as a trustee of the benefit plan in question, during 2010-14 or thereabouts diverted plan funds for his own personal use through a variety of means. During this time, Armao LLP had served as accountant-auditor for the union and the plan. Its managing partner, Salvatore Armao, now 64, a resident of Howard Beach, Queens, booked the stolen money as “loans.” In an interview with DOL investigators, Armao admitted he was aware the unnamed union president-trustee had used benefits to pay for unauthorized expenses. DOL Office of Inspector General Special Agent-in-Charge Michael Mikulka stated after the guilty plea: “Salvatore Armao, a CPA and Certified Fraud Examiner for Armao LLP, should have been the first line of defense in protecting the members of a union, and the fund serving members and their families. Instead, he abused his position by filing false documents to conceal a multi-year embezzlement scheme.”