The massive scandal surrounding the renovation of New York Metropolitan Transportation Authority (MTA) headquarters in Lower Manhattan continues to reverberate. The latest casualty in this union-connected ghost-worker and money-laundering scam is Constantine Vafias, 70, a Brooklyn-based construction contractor. On April 7, Vafias was sentenced in U.S. District Court for the Eastern District of New York to three years probation and ordered to pay $1 million in restitution and $100,000 in forfeiture. Those sums, substantial as they are, represent only a fraction of the total funds siphoned off into the pockets of the lead contractor, two major local unions, various shell companies and the Gambino crime family.
Charles Novak thought he got a bum rap at his original sentence, so he sought leniency afterward.He got it, too, though in an amount that makes one wonder whether the effort was worth it.The former vice president and business agent of International Union of Elevator Constructors Local 1 had been doing time in federal prison for two years following his jury conviction for helping to operate a ghost-worker scheme at nearly 20 high-rise construction sites in the New York City area.On February 6, the U.S. District Court for the Eastern District of New York re-sentenced him to 97 months in prison, a slight reduction from the original nine-year sentence, plus three years of supervised release, that U.S. District Judge David Trager handed him in December 2004.Novak also had been ordered to pay $289,000 in restitution and a $15,000 special assessment, and forfeit $300,000 in assets.
Outside of Laborers Local 91, no union in the country as of late has epitomized the domino theory of guilty pleas as much as Local 1 of the International Union of Elevator Constructors.In the latter half of July not less than nine members of the New York City local pleaded guilty in federal court to their role in running a construction ghost-worker scheme at the New York City Metropolitan Transit Authority Building at 2 Broadway in Lower Manhattan.This is on top of the convictions earlier in the month of members Timothy Grimm and Thomas Harrington.In all cases, the principals received three years probation, and in most cases they were ordered to make restitution and/or forfeiture payments.The guilty pleas follow a joint investigation by the Labor Department’s Office of Labor-Management Standards and Employee Benefits Security Administration, plus the FBI and the IRS.
For more than a decade New York City’s International Union of Elevator Constructors Local 1 padded area construction projects with hundreds of no-show jobs for their pals, many of whom had friends in the mob.Certain contractors liked the arrangement, too, as they were paid well to look the other way.Now the union will be operating under a new set of rules – those of the feds.On October 3, officials from the Department of Justice and the Department of Labor announced that Local 1 had agreed to be placed under the supervision of an independent federal monitor.Additionally, the union would implement key internal reforms in hiring, disciplinary and election procedures.By complying for the next three years, in turn the union would get a reprieve from prosecution.Already, the investigation has produced more than three dozen convictions of individuals belonging to or connected with the union, including fo
The New York City Metropolitan Transit Authority (MTA) back in the late 90s thought it was getting a steal of a deal on the construction of its new headquarters at 2 Broadway in Lower Manhattan.And in an unintended way, it was.An unholy alliance between a major developer, the Gambino crime family, a host of contractors, and at least three unions led to thefts in excess of $10 million, and contributed toward a total project cost overrun of more than $300 million.A 43-count federal indictment unveiled last September alleged that Gambino influence led to fraud, extortion and kickbacks in at least 10 separate contracts.This August 2 one of the syndicate’s key players, Mario Garafola, learned he would have to do some prison time.But his wrongdoing has to be seen in the context of a far broader conspiracy uncovered by the FBI and the Department of Labor’s Office of Labor-Management Standards (OLMS).
Charles Novak, former V.P. and Business Agent of Local 1 of the Intl. Union of Elevator Constructors was sentenced on Dec. 1 after a jury convicted him of racketeering, racketeering conspiracy, receiving unlawful labor payments in violation of the Taft-Hartley Act, mail fraud, making false statements about benefit funds, money laundering and money laundering conspiracy.
On Sept. 8, in the U.S. District Court for the Eastern District of New York, Peter McDonegh, a member of Elevator Constructors Local One, was sentenced to two years in prison for witness tampering. McDonegh admitted to verbally threatening the son of two primary witnesses during the course of the criminal trial of Charles Novak, the former executive vice-president of Local One and McDonegh's former father-in-law. The sentence follows a joint investigation by the NY Dist. Office of the U.S. Ofc. of Labor-Mgmt. Standards and the FBI. [OLMS, 9/15/04]
Ex-Pres. Pleads Guilty to Embezzlement in Penn. Fed. Court
On May 17, in the U.S. Dist. Ct. for the Dist. of Colo., Barbara Ann Hayes, frmr. bookkeeper and ofc. secy. for United Food & Commercial Wrkrs. Local 990, was indicted on 35 counts of embezzling $27,248.82 in union funds. The charges follow an investigation by the Denver Dist. Ofc. of the U.S. Ofc. of Labor Mgmt. Standards. [OLMS, 6/1/04]