It was the largest case of pension fraud in U.S. history. And it played a major part in how one firm in short order managed to lose $350 million, mostly in the form of union investments. A convicted mastermind of the scheme, Barclay Grayson, now out of prison, is seeking to make amends. He recently provided a Congressional panel with some practical advice on how to prevent repeat performances.
Grayson was president of a now-defunct Portland, Ore.-based investment group, Capital Consultants LLC. In testimony June 9 before the Senate Health, Education, Labor and Pensions Committee, he explained how he and several associates had built their company on an edifice of mail fraud, money laundering, bribery and racketeering. That Capital Consultants (CCL) managed to operate in this manner for as long as it did, explained Grayson, was due in part to the Department of … Read More ➡
Did you hear the one about the two-year-old longshoreman? Neither had most people in Massachusetts – until recently. But truth is stranger than fiction. An ongoing investigation into hiring practices on the Boston docks has revealed the existence of a racket that for nearly two decades has hired children as ghost employees. It’s a scheme with union fingerprints all over it. Massachusetts Attorney General Thomas F. Reilly is probing allegations that three locals affiliated with the International Longshoremen’s Association (ILA) have been inflating their members’ wages. And he’s more than likely to come up with large group of culprits.
The arrangement works like this: The local issues a child, typically the son or daughter of a union member, a union card. That way, the kid qualifies as an employee. All he has to do is “work” a few hours a year. Once he’s old enough to get a real job … Read More ➡
It may not have been an actual empire over which the Duff family presided in their native Chicago. But it was hardly a Mom-and-Pop operation either. Family patriarch John Duff, Jr., his wife Patricia, and their sons had grown wealthy over the decades, having cultivated ties both to City Hall and the underworld. But the past few years have seen the Duffs fall upon hard times, after lengthy investigations by the Labor Department’s Office of Labor-Management Standards (OLMS) and Office of Inspector General, plus the FBI and the IRS. The most important chapter may have been closed in U.S. District Court this May 18-20, with the sentencing of four persons for fraud, money laundering and racketeering.
The actions were not the first aimed at reining in the Duffs. Back in 2000 a federally-appointed monitor, Kurt Muellenberg, banned John Duff III from the Hotel Employees and Restaurant Employees for life, … Read More ➡
Upstate New York’s modern version of Peck’s Bad Boys, Local 91 of the Laborers union – at least as it had operated until three years ago – is one step closer to oblivion. Only recently a local ex-goon, Anthony Cerrone, agreed to testify for the prosecution in the upcoming trial of more than a half-dozen former members. That announcement apparently has made an honest man out of at least one defendant.
Andrew Shomers, 42, of Niagara Falls, admitted on June 10 that he took part in union-orchestrated threats, vandalism and a firebombing to intimidate people in county construction trades. A former boxer and Navy veteran, Shomers pleaded guilty to racketeering conspiracy. He faces up to 20 years in prison, but by cooperating as a trial witness, he could get that reduced to 51 months.
This latest development is bad news for former … Read More ➡
These haven’t been the best of months for Philadelphia’s city government, dogged by a string of well-publicized corruption trials. On Tuesday, June 14, a friend of Mayor John F. Street, Shamsud-din Ali, leader of a West Philadelphia mosque and operator of a shell Islamic “school,” was convicted on 22 of 34 counts of racketeering, fraud and other offenses. The U.S. Attorney’s Office had argued, with ample evidence, that Ali had led a criminal enterprise, protected by City Hall, raising large sums of money from public and private sources.
Ali, his wife and their children lived the good life, favoring expensive suits, cars and restaurant meals. That lifestyle was made possible through years of loans, contracts and donations obtained through fraud and extortion. That included a $60,000 pay-for-play commission from the City in return for support of Mayor Street. Unions gave generously, too. In 1999 Ali received a … Read More ➡
On May 24 Paul Himmelstein, former secretary-treasurer for Letter Carriers Branch 1977, was indicted in U.S. District Court on one count of embezzlement, following an investigation by the Labor Department. Himmelstein is accused of stealing roughly $20,000 in union funds. (OLMS, 6/9).
Ex-Business Manager in Philadelphia Area Indicted
On May 24 James Jordon, ex-business manager for Local 161 of the Bridge, Structural, Ornamental and Reinforcing Iron Workers, was indicted in federal court on two counts of embezzling $21,652.80 in union funds. He also was charged with making a false entry in union records. A former secretary for the Philadelphia-area local, Barbara Wituschek, had been indicted on May 10 on two counts of embezzlement. (OLMS, 6/9).
St. Louis-Area Business Manager Indicted for Embezzlement
On May 18 Duane Raab, formerly the business manager for Iron Workers Local 518, was indicted in federal court on three counts … Read More ➡
A U.S. Appeals Court has served notice to the nation’s organized labor leaders that full financial disclosure is not an option, but a necessity. But in rendering its two decisions on May 31 it appeared to be sending mixed signals. In AFL-CIO v. Chao, by a 3-0 margin, the U.S. Court of Appeals, District of Columbia Circuit, upheld a set of regulations the Department of Labor had unveiled a little over two years ago that required unions to spell out in greater detail how they spend their money. The AFL-CIO had challenged the new rule, claiming that the new reporting requirements created an undue burden on unions and that Labor Secretary Elaine Chao lacked the authority to expand the existing requirements. But the circuit court rejected these claims, arguing that since union expenditures are derived from worker dues, workers have the right to see, as much as possible, where … Read More ➡
Nobody doubted Primo Cassarino’s street credibility. A hardcore soldier with the Gambino crime family, he was an enforcer for shipping docks boss Anthony “Sonny” Ciccone. Cassarino was so fearless that not long ago he’d been convicted for shaking down tough-guy action-film star Steven Seagal. But in the wake of a two-year probe by the Waterfront Commission, he’s been telling federal and state agents what he knows. That knowledge may be enough to take down the top brass of Local 1814 of the International Longshoremen’s Association (ILA) – and some key associates.
Investigators this decade have been focusing their energies on the Staten Island docks, which like those in nearby Brooklyn, long have been Gambino-controlled. Cassarino last August received an 11-year, three-month federal prison sentence for his role in the operation. Ciccone, Gambino boss Peter Gotti (brother of late boss John Gotti), and several other Gambino figures also were convicted. … Read More ➡
For years it was an unwritten law that to get something built in Niagara County, N.Y. a contractor had to hire workers from Laborers Local 91. Disobey that law, and there could be trouble – like extortion, vandalism, death threats and assaults. For years Anthony Cerrone helped carry out the local’s dirty work. But now, as a convicted man, he’s got himself a new employer. Cerrone, 39, is set to testify for the prosecution in the upcoming trial of nine former officials of Local 91 of the Laborers International Union of North America (LIUNA), including ex-president Mark Congi. He doesn’t have much choice, given that he’s facing a sentence of up to 20 years.
Cerrone, along with Steven Markle, 43, was convicted this January for his role in an attack on non-union tile setters at a supermarket construction site in September 1998. His arrest in 2002, along with … Read More ➡
Matthew Guglielmetti’s career as a made man is over. But that doesn’t mean he’ll be cooperating with authorities to end other careers in the New England criminal underworld. That’s what his attorney, at least, is counting on. On May 13, Guglielmetti, standing before U.S. District Judge Ernest Torres, pleaded guilty to attempted cocaine-trafficking charges. His arrest back in January was a classic sting of a union whose top leadership long had worked with organized crime figures. Back in 1995 LIUNA, well documented to be in cahoots with mobsters, had averted a federal RICO suit by agreeing to a supervised internal cleanup.
Providence, in particular, was of interest to the Justice Department. The city and surrounding area was the home turf of then-union president Arthur A. Coia, who, like his father, Arthur E. Coia, himself a ranking union official, had worked with New England’s Patriarca crime family. The younger … Read More ➡