Laborers Secretary-Treasurer in California Charged with Theft

On March 3, Edward Padilla, former secretary-treasurer and business manager for Laborers International Union of North America Local 220, was charged in U.S. District Court for the Eastern District of California with one count of embezzlement in the amount of $168,780 from the Bakersfield union.  The charge follows a probe by the U.S. Labor Department’s Office of Labor-Management Standards.…

Maryland Contractor Sentenced for Role in $1.7M+ LIUNA Scam

For a while, Gary Cooper had a lucrative deal going with Laborers International Union of North America Local 657 – until his business partners were caught.  On February 27, Cooper, principal owner of a Greenbelt, Md.-based building contractor, STS General Contracting, was sentenced in U.S. District Court for the District of Columbia to 68 months in prison for his role in embezzling more than $1.7 million in funds from the union, at the time based in Washington, D.C.  He also was ordered to pay the union $1.632 million in restitution and forfeit $1.734 million in illegally-derived proceeds.  Two other defendants, Anthony Frederick and Christopher Kwegan, were sentenced last month for their offenses.  The actions follow a joint probe by the FBI and the Labor Department.

According to prosecutors, Cooper, now 57, a resident of Kettering, Md., along with co-defendant area real estate agent and STS co-owner Christopher Kwegan, conspired with …

Business Partner of Convicted LIUNA Business Manager in Maryland Sentenced

Christopher Kwegan wasn’t a union man.  But right now he no doubt is regretting his dealings with one union in particular.  On February 8, Kwegan, a real estate closing agent and co-owner of a Greenbelt, Md. consulting firm, STS General Contracting, was sentenced in U.S. District Court for the District of Columbia to four years in prison, three years of probation and 120 hours of community service for his role in various schemes to divert at least $1.7 million in funds from the Washington, D.C.-based Laborers International Union of North America Local 657 to STS.  He also was ordered to pay $1,632,000 in restitution, the identical sum required of convicted co-defendant Anthony Frederick, who headed the union.  Former STS principal owner Gary Cooper also was convicted in the case.  The actions follow a joint probe by the FBI and the Labor Department.

According to prosecutors, Kwegan enabled Frederick and Cooper …

Laborers Office Manager in Idaho Indicted for Embezzlement; Pleads Guilty

On January 25, Ashley Cline, former office manager for Laborers International Union of North America Local 155, was indicted in U.S. District Court for the District of Idaho for embezzling more than $37,000 in funds from the Idaho Falls-based union.  She then pleaded guilty.  Sentencing is scheduled for April 20.  The indictment and plea follow a probe by the Labor Department’s Office of Labor-Management Standards.…

Business Manager of Washington, D.C. LIUNA Local Sentenced

Anthony Frederick Sr. used his union as a private bank to fund various projects.  For now, his only project is incarceration.  Two days ago, on February 7, Frederick, former business manager of Laborers International Union of North America Local 657, was sentenced in District of Columbia federal court to four years in prison, and ordered to pay full restitution, for embezzling more than $1.7 million from the formerly Washington, D.C.-based union, which represents about 1,650 workers in Washington, D.C. and several surrounding Maryland and Virginia counties.  Frederick had pleaded guilty on November 1.  Two other persons, Gary Cooper and Christopher Kwegan, also were convicted in the scheme, the result of a probe by the FBI and the Labor Department.

Union Corruption Update twice has reported on this case.  Frederick, now 50, a resident of Upper Marlboro, Md., had served as LIUNA Local 657 business manager for about a decade.  But …

Top Ten Union Corruption Stories of the Year

Benefit scams, especially involving health plans, grabbed the lion’s share of union corruption stories in 2016.  Scammers came from outside as well as from inside the unions, a fact highlighting the need for trustees to exercise greater due diligence in choosing outside parties.  There were also the usual cases of six-figure (or more) embezzlement and fraud against union general funds.  Labor officials, meanwhile, expanded their misguided campaign to enact a $15 an hour minimum wage.  They also tried to undo Right to Work laws in three states, temporarily achieving success in two by way of court action.  And a deadlocked Supreme Court enabled state and local public-sector union bosses to retain their authority to coerce dues payments from unwilling workers.  In other words, there was plenty to write about.  Here were the ten stories that mattered most:

10)  Hawaii contractor pleads guilty; sentenced for scamming Painters union, benefit fund, IRS

Chicago Laborers Contractor Pleads Guilty to Benefit Fraud, Wage Theft

liuna logoRipping off union benefits is big business.  In the case of Yashvant Patel, that wasn’t even half the story.  On August 11, Patel, a Chicago-based contractor, pleaded guilty in U.S. District Court for the Northern District of Illinois to mail fraud and financial concealment in connection with defrauding employees out of about $600,000 scheduled benefits and $1.3 million in wages.  Many if not most of the shortchanged workers were residing illegally in this country.  Patel had sought to escape the terms of a bargaining agreement with affiliates of the Laborers International Union of North America.  He was arrested in May 2015 and indicted by a grand jury that August on four counts each of mail fraud and false statements.  The actions follow a joint probe by the FBI and the Labor Department’s Office of Inspector General.

Yashvant Patel, now in his early 60s, a resident of St. Charles, Ill., owned …

Maryland Laborers Business Manager Pleads Guilty to $1.7M+ Ripoff; Jury Convicts Contractor

liuna logoIt was one of the stranger union scams, stretching from suburban Washington, D.C. to the Arab nation of Qatar.  And the defendants reaped what they sowed.  On November 1, Anthony Frederick Sr., former business manager of Laborers International Union of North America (LIUNA) Local 657, pleaded guilty in U.S. District Court for the District of Columbia to fraud and theft charges in connection with the diversion of over $1.7 million in funds from the Washington, D.C.-based union to a suburban Maryland firm, STS General Contracting.  Three weeks later, on November 22, STS owner Gary Cooper was convicted by a Washington trial jury on similar charges.  A Maryland real estate agent, Christopher Kwegan, previously had pleaded guilty in the case.  The convictions follow indictments handed down in October 2015.

LIUNA Local 657 represents roughly 1,500 construction workers in the Washington, D.C. area.  It also for a while served as a source …

Massachusetts Contractor Pleads Guilty to LIUNA Benefit Fraud, Tax Evasion

pension-ripoffRonald Mulcahey often paid his employees in cash.  Now he’s preparing to pay a price of a different kind.  On October 25, Mulcahey, proprietor of a number of environmental services firms in the Boston area, pleaded guilty in U.S. District Court for the District of Massachusetts to defrauding his employees of scheduled benefits.  One of his companies had a collective bargaining contract in force with a local of the Laborers International Union of North America (LIUNA).  By paying certain employees off the books through a pair of identical nonunion companies, he was able to underreport benefits and avoid applicable federal taxes.  The guilty plea follows a joint investigation by the IRS and the U.S. Labor Department’s Employee Benefits Security Administration.  Sentencing is set for January 19.

In the construction industry there is a widespread practice, known as double-breasting, in which the owner of a unionized business sets up one …

Massachusetts Contractors Indicted for $2M+ LIUNA Double-Breasting Scheme

liuna logoEmployees of Christopher and Kimberly Thompson were being had, even if most weren’t aware of it until the hammer came down.  On January 26, the Thompsons, operators of a Boston-area asbestos removal company, were indicted in U.S. District Court for the District of Massachusetts on 18 counts of mail fraud, 18 counts of benefit fraud and one count of embezzlement in a scheme to defraud members of a Laborers local out of more than $2 million in promised benefits.  The case has all the appearances of double-breasting.  Following their arrest, the couple pleaded not guilty in February and currently are free on bond.  As of this writing, the U.S. Attorney’s Office website indicates no subsequent action.  The actions follow a joint probe by the U.S. Labor Department’s Employee Benefits Security Administration and Office of Inspector General.

Christopher and Kimberly Thompson, a husband-and-wife couple, now both 52, residents of Windham, New …

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