Two Boston-Area Union Members Indicted for Loan Sharking

On Monday, May 16, the U.S. Attorney’s Office in Boston announced the arrests and four-count indictment of Virgil “Duke” Farese, 72, of Framingham, Mass., and James Armstrong, 39, of Boston.  The two men, alleges the indictment, from February 1997 through December 2000, lent money at usurious rates to fellow members of their union, Tunnel Workers Local 88.  Based on a joint federal-local investigation, Farese and Armstrong indicated to borrowers they would have to get violent in the event of a late payment.  The cost of a loan was steep, carrying a weekly interest rate of 10 percent.  If convicted, the two men face up to 20 years in prison and a $250,000 fine on each of the four loan-sharking charges.   (PR Newswire Association, 5/16).  

 

 

Kansas Truck Drivers’ Union Official Pleads Guilty to Embezzlement

On Wednesday, May 11, Daniel Van Becelaere Read More ➡

14 Chicago Mobsters Indicted for Murders and Other Felonies

The Department of Justice has taken a dramatic step to combat Chicago’s most feared gangsters.  In the process, any number of crooked union officials may have a change in career plans.   On Monday, April 25, the U.S. Attorney’s Office, Northern District of Illinois, announced the indictment of 14 top members of the Chicago Mafia, also known as ‘The Chicago Outfit,’ for crimes spanning some four decades.  Three of the defendants already were in federal custody on separate charges.  Another, straight out of a movie, was found dead, apparently of natural causes, when agents came to arrest him.  Of the 11 defendants indicted under the Racketeer Influenced and Corrupt Organizations Act (RICO), seven had committed murders or agreed to commit murder.  Collectively, they accounted for 18 previously unsolved murders and one attempted murder during the period 1970-86.  Other crimes listed in the nine-count indictment include extortion, loan-sharking, bookmaking, witness intimidation, Read More ➡

Probes into Detroit VA Hospital Workers Local Reveals Long Pattern of Corruption

Local 933 of the American Federation of Government Employees for the last few years has been in financial shambles.  The explanation lies at the top.  The local’s leadership operated their union like a personal bank.  A series of investigations, most recently by the Detroit News, reveal a disturbing pattern of embezzlement and other forms of malfeasance. 

 

The problems of the local, which represents nearly 1,200 employees at John Dingell Veterans Hospital in Detroit, became apparent after Chetham Brazill, president of the local, left his position in December 2002.  When first elected to office in 1997, Brazill inherited a union with a surplus of $66,000.  Five years later he and his cronies had left the union in debt.  The local had fallen behind by more than $50,000 in forwarding dues to AFGE national headquarters and more than $40,000 in insurance premiums Read More ➡

Free-Spending Philadelphia Islamic School Head Aided by LIUNA Pals

“An outstanding citizen, an outstanding cleric, and a person to be emulated” –  that was Patrick Gillespie, head of the 35,000-member AFL-CIO Building and Trades Council for the Philadelphia area, describing the director of a local religious school now on trial for fraud, bribery and extortion.  The object of Gillespie’s admiration was Shamsud-din Ali, a Muslim cleric (or “imam”), who ran Philadelphia’s Sister Clara Muhammad School – or perhaps more accurately, ran it into the ground.  But it’s where Ali, a convicted murderer, got his money that may interest prosecutors as much as where the money went.  Last month he was slapped with a superseding indictment in Philadelphia federal court.

 

The imam’s trial is the third resulting from a federal probe into financial mismanagement in Philadelphia.  Investigators discovered that on November 30, 1999 a $15,000 donation from a group called the Friends of Labor was deposited into the Read More ➡

Ex-District Representative Sentenced in North Carolina Court

On April 5, Angelous “Smokey” Lineback, former international representative for the Retail Wholesale District Council of the United Food and Commercial Workers, was sentenced by the U.S. District Court for the Eastern District of North Carolina to 15 months imprisonment, to be followed by 36 months of supervised probation.  Last May he pled guilty to embezzling funds and falsifying records for two locals he had represented.   In addition to his sentence, Lineback was ordered to make restitution in the amount of $77,441 to UFCW Local 1050 and $13,685 to UFCW Local 1052.  The action follows an investigation by the Nashville District Office of the U.S. Office of Labor-Mgmt. Standards (OLMS, 4/26).

 

Former Secretary Pleas Guilty in Pennsylvania Court

On April 15, Sonya Green, former financial secretary of Steelworkers Local 3657 in Western Pennsylvania, pled guilty in U.S. District Court to one count of embezzlement.  Read More ➡

Miami Bosses Charged with Embezzlement

For a half-decade, leaders of the Miami-Dade County local of the American Federation of State, County and Municipal Employees ran their union like a private slush fund.  But as ex-leaders, they are paying the wages of their crimes.  On April 20 four former officials of AFSCME Local 121 surrendered to the Dade County authorities, the result of a full investigation by county prosecutors and the inspector general into financial irregularities.  A fifth ex-officer accused in the probe died last year.

 

According to the arrest affidavit, during the period 1997-2002 the five had embezzled roughly $350,000 in membership dues, mainly from county water and sewer department employees, and then lied about the missing money.   The officials were supposed to ensure that $726,865 of the more than $1 million in dues collected over this time were sent to the union’s international and state parent organizations.  But Read More ➡

Wisc. Union Boss Accused of Stealing

A former official of the American Federation of State, County and Municipal Employees was charged on April 13 with felony theft from that union.  Chris Dehn, 36, of Portage, Wisconsin, had served as treasurer of AFSCME Local 3394, which represents workers at the state’s Columbia Correctional Institution.  Prosecutors allege Dehn, while working as a guard at CCI stole $26,189.  The criminal complaint said that Dehn “admitted to taking cash withdrawals from the union savings account,” and “also stated that it was typical for him to get a signature from another union officer upon a blank check and Dehn would then write the rest of the check out.”

 

Columbia County Circuit Judge Daniel George released Dehn from jail on a signature bond after a court appearance.  If convicted, he faces up to 10 years in prison and a $25,000 fine.  [Associated Press, JanesvilleRead More ➡

Fed. Agency Charges Md. Union with Threatening Employees

Federal authorities say the Maryland State Teachers Assn. (MSTA) broke federal labor laws by “threatening and coercing” employees who sought company benefits denied by the union.  According to the National Labor Relations Board (NLRB) ruling at the end of March, union officials must stop such unfair practices as reprimanding workers petitioning for employment benefits or job reassignments and must post notices stating that they violated labor law.

 

The union, an affiliate of the Natl. Education Assn., is Maryland‘s largest union and represents about 60,000 public school employees.  The labor board is the third government agency to find the union mistreated its employees.  The Internal Revenue Service found in February 2004 that the union avoided payroll taxes by wrongfully denying employment benefits to union organizers.  In May, the Maryland Department of Labor, Licensing and Regulation made a similar finding regarding unpaid state workers’ compensation and Read More ➡

Former Head of Kansas Teachers Union Charged with Forgery, Theft

Wayne Kruse has some lessons to learn, not just teach. On March 8, Kruse, former president of the Lawrence, Kansas Education Association, an affiliate of the National Education Association, was charged with two counts of forgery and one count of theft in connection to the disappearance of nearly $100,000 in union funds. LEA’s current leadership discovered more than $97,000 missing from about $240,000 in dues deducted from members’ paychecks between November 2003 and August 2004. Sam Rabiola, a high school English teacher who succeeded Kruse as the local president, said he found the group’s finances in disarray. “There were no books,” he remarked. “There were some duplicate check stubs and that was about it. A lot of money had been spent and was unaccounted for.”

Kruse, a sixth-grade teacher who had headed the local union since 1999, would not be long at his job. Rabiola asked the Kansas chapter of Read More ➡

Labor Department Plans Increasing Scrutiny of Union Finances

The Bush administration has been rapidly expanding its audits of labor unions.  Union officials are crying foul, claiming the administration is retaliating against their overwhelming support for Senator John Kerry in last year’s presidential election.  But the primary legacy of the recent ramping up of investigations may be a thorough housecleaning of union of their criminal element.

 

The Department of Labor has released figures showing that during 1991-2000 the number of its audits of national and local unions fell from 1,080 to 206.  By contrast, in 2004 the department performed more than 500 audits.  And it expects to conduct even more this year, in large measure because of the planned addition of 48 full-time workers to its union-auditing unit this year.  That represents a 14 percent increase in the face of personnel cuts in other areas.

 

Lary F. Yud, deputy director of the Read More ➡

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