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

Ex-SAG Benefit Plan Official Pleads Guilty to $700K+ Tax Evasion

SAG logoWhen Bruce Dow resigned under pressure as longtime head of the Screen Actors Guild’s pension and health plans in April 2012 amid allegations of extensive self-dealing, a good deal of unfinished business remained.  Now the workload has gotten smaller.  On November 12, former plan chief information officer Nader Karimi pleaded guilty in Los Angeles federal court to omitting more than $700,000 in income on his tax returns for the years 2005 through 2008.  Karimi had changed his “not guilty” plea to “guilty” before U.S. District Judge Fernando Olguin.  Sentencing, originally set for March 11, has been reset for April 14.  He faces up to three years in prison.  The plea follows a probe by the FBI, the IRS, and the Labor Department’s Office of Inspector General and Employee Benefits Security Administration.

The case against Nader Karimi sprung from a complaint filed with the Department of Labor (DOL) four and a …

Screen Actors Guild Whistleblower Alleges $5-$10M Benefit Theft

It has the raw material for a movie. The plot, so far, is incomplete. Over the last few months the Screen Actors Guild (SAG) has been rocked by public allegations by a former benefits executive that top officials of SAG-sponsored benefit plans, including CEO Bruce Dow, looted between $5 million and $10 million. The whistleblower, Craig Simmons, who had been fired a half-year before, this September filed a complaint with the U.S. Department of Labor requesting that DOL conduct criminal and civil probes. Simmons also alleges that Dow instructed him to deceive trustees and authorities about the losses. The Labor Department has yet to comment on whether it has begun an investigation. Lawyers for the SAG, which controls about $2.5 billion in plan assets, are denying all charges. Yet significantly, the union hired an investigator to conduct a review, since completed.

Craig Simmons came aboard the Screen Actors Guild-Producers Pension …