Three Officers of UFCW Local in New York Charged in $2.4M Scam

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UFCW logoUnited Food and Commercial Workers Local 348 in New York City for more than three decades has been a family affair - a Fazio family affair. And right now the family needs a good lawyer. On October 26, Anthony Fazio Sr., Anthony Fazio Jr. and John Fazio Jr. were arrested and charged in Manhattan federal court with racketeering, extortion, money-laundering and other offenses in connection with a scheme through which they stole about $2.4 million from local members and employers for more than a decade and a half. The defendants, respectively, the union's longtime past president, immediate past president and immediate past secretary-treasurer, kept the money or shared it with cronies. "As leaders of Local 348, the Fazios were supposed to advocate on behalf of their members, not strong-arm and threaten business owners in order to make a profit under the table," commented U.S. Attorney Preet Bharara

The Brooklyn-based Local 348, with some 12,000 members, is the largest of a dozen New York City unions affiliated with the United Food and Commercial Workers. It's also highly corrupt. Then again, it hardly could be otherwise with the Fazios in charge. Anthony Fazio Sr., 66, a resident of Brooklyn, was president of the local from 1976 to January 2010. His son, Anthony Fazio Jr., 37, also a Brooklyn resident, succeeded him but resigned early this year. A nephew, John Fazio Jr., 39, a resident of Staten Island, served as vice president during September 2000-January 2010, and then as secretary-treasurer until early 2011. They are, or at least were, paid well. Last year the respective total compensation for these persons was $149,772, $172,257 and $168,712, sums not even including the $86,129 and $84,357 that the younger Fazios received for holding down their roles of immediate past secretary-treasurer and past vice-president. Nor did it include the unspecified sum the elder Fazio collected for serving as a trustee for the local health and welfare fund (the figure was $65,000 in 2009). Apparently, this wasn't enough.

According to the six-count, 52-page indictment, the Fazios from 1995 until early 2011 used their leadership positions in Local 348 to collect payments from over a dozen union employers, in violation of federal and state law. Often, they used the threat of work disruptions, among other intimidation tactics, to obtain funds. At least one employer had to pay up as much as $25,000 a year. Here's how Part A of the extortion count read:

From at least in or about 1995, up through and including in or about 2010, in the Eastern District of New York and elsewhere, Anthony Fazio Jr., the defendant, and others known and unknown, willfully and knowingly did commit and attempt to commit extortion, and aid and abet the commission of extortion...by obtaining money and property from and with the consent of "Employer-3," the owner of a restaurant supply business, whose consent was induced by the wrongful use of actual and threatened force, violence and fear, and thereby did obstruct, delay, and affect commerce and the movement of articles and commodities in commerce...

The Fazios allegedly also stole from member benefit plans, also with help from at least one employer. According to the indictment: "From in or about 2007 up to and including in or about 2009, in the Eastern District of New York and elsewhere, John Fazio...accepted annual cash payments and things of value from Employer-10 in return for a lower contractual rate of contribution on behalf of his employees...for health care benefits." And this: "In or about March 2007, in the Eastern District of New York and elsewhere, John Fazio Jr., the defendant, and others known and unknown, willfully and knowingly did embezzle and steal, and did unlawfully and willfully abstract and convert to their own use, and to the use of others, credits, property and other assets of the UFCW Local 348 Health and Benefits Plan."

In addition to racketeering, extortion and embezzlement, two of the Fazios, Anthony Sr. and John Jr., and certain other individuals, engaged in a money-laundering scheme during 2002-08. The pair knowingly billed UFCW Local 348 for nonexistent goods by generating fraudulent invoices; paid these "invoices" out of local funds; laundered the "receipts"; and diverted cash from these sham transactions to their own pockets. The elder Fazio also intimidated anyone who might complain about such things. Sometime around early this year, the indictment notes, "Anthony Fazio Sr., the defendant, and others known and unknown, willfully and knowingly did use intimidation, threaten, and corruptly persuade another person, with intent to influence, delay, and prevent the testimony of a person in an official proceeding, and with intent to cause and induce a person to withhold testimony from an official proceeding."

All told, said prosecutors, the three Fazios extracted a combined $2.4 million. Robert Panella, Special Agent-in-Charge for the U.S. Labor Department's Office of Inspector General, is satisfied for now: "This RICO indictment and today's arrests reflect our commitment to fight labor racketeering and union corruption. These individuals allegedly held an extortionate reign over the union to enrich themselves at the expense of union members for more than a decade." The defendants on each count face a maximum of between five and 20 years in prison, plus as much as a $250,000 fine. The good luck streak for this extended family appears over.