Union Corruption Update

Since 1997, NLPC has become a high-profile and credible source for information about America’s labor unions through our publication Union Corruption Update.

The newsletter has been referenced in many other media outlets including the New York Times, Chicago Tribune and National Journal.

Security Police Treasurer in Washington State Indicted for Embezzlement

Security guardOn April 20, Charles Nelson, former treasurer for the National Council of Security Police, was indicted in U.S. District Court for the Eastern District of Washington on one count of embezzling more than $140,000 in funds from the Yakima-based union.  The indictment follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

Security Officers Union Boss Found Guilty of Embezzlement

Security officerAssane Faye saw it as doing someone a favor.  Federal prosecutors saw it as stealing.  On May 10, Assane Faye, founder, president and executive director of the United Security and Police Officers of America (USPOA), was convicted by a jury in U.S. District Court for the District of New Jersey on two counts of embezzling more than $350,000 from the Washington, D.C.-based union and seven counts of unemployment insurance fraud.  Immediately afterward, Faye was ordered by the court to relinquish his union post and remain under home confinement until sentencing.  He had been indicted in March 2015 following a joint probe by the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

Mail Handlers Stewards in Detroit Indicted for Embezzlement

Mail Handlers logoOn June 8, Jeffrey Velfing and John Crosby, respectively, former chief steward and former assistant steward of National Postal Mail Handlers Union Local 307, each pleaded guilty in U.S. District Court for the Western District of Michigan to one count of embezzling funds in the amount of $6,758 from the Detroit-based union.  The pair had been indicted in April.  The charges and guilty pleas follow an investigation by the U.S. Postal Service’s Office of Inspector General and the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

Washington, D.C. AFGE Treasurer Pleads Guilty to Theft

AFGE logoOn May 3, Marcella Champion, former secretary-treasurer of American Federation of Government Employees Local 1831, pleaded guilty in U.S. District Court for the District of Columbia to one count of theft in the amount of $4,130 from the Washington, D.C.-based federal security employees union.  She had been charged last November.  The actions follow a probe by the Labor Department’s Office of Labor-Management Standards.

Auto Workers Local V.P. in Louisiana Sentenced for Forgery

United Auto Workers logoOn May 5, Gregory Hill, former vice president of United Auto Workers Local 2297, was sentenced in U.S. District Court for the Western District of Louisiana to four years of probation, and ordered to pay $12,232 in restitution, for forging checks in an account in the name of the Shreveport union.  Hill, along with another Local 2297 member, Danny Rawls, had been indicted in March 2015 on nine counts each.  Hill pleaded guilty this January to one count of uttering and forgery in the amount of $581.  Rawls already had pleaded guilty last September and was sentenced this February.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

NYC Corrections Union Boss, Hedge Fund Manager Busted for Fraud

It wasn’t as if Norman Seabrook needed the money.  But in accepting it, he jeopardized the retirement of union members.  Last Wednesday, June 8, Seabrook, president of New York City’s Correction Officers Benevolent Association (COBA), was arrested by FBI agents and charged with honest services fraud for receiving $60,000 in cash from an executive of a troubled Manhattan hedge fund, Platinum Partners, in exchange for steering $20 million in union pension money to the fund.  Platinum Partners CEO Murray Huberfeld was similarly charged.  Seabrook is out on $250,000 bond, but given his ouster by the COBA board, he doesn’t have much to do.  U.S. Attorney Preet Bharara (in photo) termed this “a straightforward and explicit bribery scheme.”  The actions are part of a wider probe into NYPD corruption.

Illinois Machinists Secretary-Treasurer Pleads Guilty to Theft

Machinists logoRaul Mascote is a good example of the expression, “There’s a lot more where that came from.”  On April 14, Mascote, former secretary-treasurer of International Association of Machinists and Aerospace Workers Lodge 2458, pleaded guilty in U.S. District Court for the Northern District of Illinois to one count of embezzling funds in the amount of $62,263 from the Minooka (near Joliet)-based union.  He had been charged last July following a joint investigation by the U.S. Labor Department’s Office of Labor-Management Standards and the U.S. Energy Department’s Office of Inspector General.  Prosecutors had alleged Mascote knowingly had converted $510,973 worth of U.S.-government property to his personal use.  This latter sum was not reflected in the original charge.  However, pursuant to federal guidelines, it will be considered in determining his sentence. 

Painters Union Business Agent in Hawaii Sentenced

Painters logoFor 17 years, Raymond Fujii routed client money to his own pockets.  But the deception couldn’t be maintained forever.  On May 13, Fujii, formerly executive director for the Painting & Decorating Contractors Association of Hawaii, was sentenced in U.S. District Court for the District of Hawaii to 42 months in prison, to be followed by three years of supervised release, for conducting an elaborate fraud scheme against the association and a related Painters union entity, the Hawaii Painters Trade Promotion & Charity Fund, that totaled nearly $1.5 million.  He also had been charged with federal income tax evasion.  Fujii had pleaded guilty on January 27, one week after being charged.  The actions follow a joint probe by the IRS and the U.S. Labor Department’s Office of Labor-Management Standards.

Florida Teamsters President Pleads Guilty to Records Fraud

Teamsters logoOn April 6, Robert Tuttle Jr., former president of International Brotherhood of Teamsters Local 173, pleaded guilty in U.S. District Court for the Middle District of Florida to making false entries in financial records of the Bradenton-based union for the purpose of concealing his embezzlement of about $11,275.  He had been indicted last December on four counts of embezzlement totaling $4,857 and one count of false record-keeping.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

Steelworkers President in West Virginia Sentenced for Theft

Steelworkers logoOn April 6, James Coffey, former president of United Steelworkers Local 5-887, was sentenced in U.S. District Court for the Northern District of West Virginia to two years of probation for embezzling funds from the Newell, W.Va.-based union in the amount of $6,260.  He already paid $7,419 in restitution prior to sentencing.  Coffey had pleaded guilty in January after being indicted last October for embezzling $7,098.  The actions follow an investigation by the Labor Department’s Office of Labor-Management Standards.

UMW Secretary in Pennsylvania Indicted for Embezzlement

Mine Workers logoOn April 5, Daniel Ternitsky, former financial secretary of United Mine Workers Local 285, was indicted in U.S. District Court for the Western District of Pennsylvania on one count of embezzling $10,680 in funds from the Allison, Pa.-based union.  The indictment follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

Steelworkers President, Secretary in Oklahoma Charged

Steelworkers logoAt United Steelworkers Local 13-669, theft apparently is a family affair.  On April 5, Jason Leach and Jeremy Leach, respectively, president and secretary-treasurer of the Pryor Creek (northeast of Tulsa), Okla. union, were indicted in U.S. District Court for the Northern District of Oklahoma for acts of theft.  Jason Leach, 32, a resident of Locust Grove, was charged with nine counts of embezzling $2,524; his brother, Jeremy Leach, 35, also a resident of Locust Grove, was charged with 12 counts of embezzling $3,111.  The indictments follow a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

South Dakota Postal Workers Treasurer Sentenced for Theft

APWU logoOn April 11, Susan Haugen, former treasurer of the South Dakota chapter of the American Postal Workers of America, was sentenced in U.S. District Court for the District of South Dakota to one year of probation and ordered to pay a $100 special assessment for embezzling $30,782 in funds from the Huron, S.D. association.  She had pleaded guilty this February after being indicted on three counts in November 2014 for theft of more than $36,000.  Haugen previously paid restitution in the amount of $38,234.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

CWA Secretary-Treasurer in Oregon Pleads Guilty; Sentenced

Communications Workers logoOn April 4, Bonita Scherling, former secretary-treasurer of Communications Workers of America Local 7970, pleaded guilty in the Circuit Court of Oregon, County of Hood River, to one count of forgery and one count of identity theft from the Hood River-based union.  She then was sentenced to five years of probation and 120 hours of community service, and was ordered to pay $19,386 in restitution and a $500 fine.  Scherling had been indicted last October on one count each of theft and forgery, and two counts of identity theft.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

Southern California Machinists Treasurer Charged; Pleads Guilty

Machinists logoOn March 30, Oscar Luevano, former financial secretary-treasurer of Transportation Communications Union (TCU) Local Lodge 5050, pleaded guilty in U.S. District Court for the Central District of California to embezzling $132,939 in funds from the Covina (Los Angeles County)-based union.  He had been charged five days earlier.  TCU is an affiliate of the International Association of Machinists.  The charge follows a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

Texas Letter Carriers President Pleads Guilty; Sentenced

Letter Carriers logoOn March 28, Stanley Buchanan, former president of National Association of Letter Carriers Branch 493, pleaded guilty in Smith County (Tex.) Court to unauthorized use of a credit card issued by the Tyler-based union.  He then was sentenced to deferred adjudication, placed in community supervision for three years, and ordered to pay $6,406 in restitution and $348 in court costs.  Smith had been charged last December with credit card fraud in the amount of $7,776.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

UAW President in Central Illinois Indicted for Theft

Auto Workers logoOn March 22, Bob Buford, former president of United Auto Workers Local 2419, was indicted in U.S. District Court for the Central District of Illinois on one count of mail fraud related to his embezzlement of $28,697 from the savings account of the Danville, Ill.-based union back in 2010.  He also was indicted for concealing the thefts in union financial records.  The charges follow a probe by the Labor Department’s Office of Labor-Management Standards.

Steelworkers Secretary in Louisiana Charged; Pleads Guilty

Steelworkers logoOn April 26, Todd Culley, former secretary-treasurer of United Steelworkers Local 103, pleaded guilty in U.S. District Court for the Middle District of Louisiana to one count of embezzlement in an unspecified sum from the St. Francisville-based union.  He had been charged on April 12.  The actions follow a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

Kansas AFGE Local Treasurer Sentenced for Fraud

AFGE logoOn May 4, Shelly Sutton, former treasurer for American Federation of Government Employees Local 477, was sentenced in U.S. District Court for the District of Kansas to three months in prison and three months of supervised release for one count of bank fraud.  She also was ordered to pay restitution in the amount of $78,778.  Sutton had pleaded guilty in February to stealing $93,094 from the Wichita-based union, which represents employees at the local VA hospital, after being indicted last November.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

Treasury Rejects Teamster Pension Compromise; Losses Mount

The word “troubled” doesn’t even begin to describe the Teamsters’ Central States Pension Fund.  “Desperate” is more like it.  Last Friday, May 6, the Treasury Department announced that it had rejected a restructuring proposal submitted by plan trustees last September to avert collapse.  The proposal, which would have cut benefits on average by 22 percent for about two-thirds of all participants, did not go over well with Teamsters General President James P. Hoffa and other union officials.  Yet they are cornered by reality.  As of last fall, liabilities exceeded assets by $17.5 billion, a gap widening by $2 billion a year.  The plan is projected to go bankrupt in 10 years.  A federal bailout likely would make things worse.  Central States Executive Director Thomas Nyhan is reviewing alternatives.

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