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.

Chicago-Area Doctor Sentenced for $3.7M+ Fraud; Union Health Plans Affected

Medical insurance fraudMedical insurance fraud is one of America’s leading growth industries.  And doctors are prominent among those getting fat and rich.  Looking on the bright side, some of them also get caught and punished.  Last August 28, Dr. Robert Kolbusz, a Chicago-area dermatologist, was sentenced in U.S. District Court for the Northern District of Illinois to seven years in prison and ordered to pay more than $3.7 million in restitution for falsely billing Medicare and private health insurers for phony skin cancer treatments.  Among fleeced entities were area union health plans.  A jury had convicted Kolbusz in October 2014 on three counts each of wire fraud and mail fraud following a seven-count indictment in the early fall of 2012.  The actions follow a probe by the FBI and the Inspector General’s Offices of the Labor and Health & Human Services Departments.

Chicago-Area Iron Workers Local Bookkeeper Sentenced

Iron Workers logoOn January 20, Michelle Misso, former bookkeeper for Iron Workers Local 63, was sentenced in U.S. District Court for the Northern District of Illinois to three months in prison and one year of supervision for making false entries in records of the Westchester (Cook County), Ill. union to conceal her embezzlement of $47,161.  She had pleaded guilty last October after being charged in August.  In addition to her prison sentence, Misso was ordered to pay residual restitution totaling $31,161.  The union previously had been based in nearby Broadview, Ill.  The actions follow a joint investigation by the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

Kansas City, Mo. AFSCME Boss Pleads Guilty to Embezzlement

AFSCME logoLowell Wreh headed a union that represented jail workers.  Now he faces the possibility of being an inmate.  On January 20, Wreh, former president of American Federation of State, County and Municipal Employees Local 1707, waived his right to a grand jury and pleaded guilty in U.S. District Court for the Western District of Missouri to one count of wire fraud in the amount of $7,642 against the Kansas City, Mo. union, which represents employees of the Jackson County Department of Corrections.  The guilty plea follows a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

Postal Workers President in Michigan Pleads Guilty to Records Fraud

Postal Workers logoOn January 19, Jesus Gonzales, former president of American Postal Workers Union Local 300, pleaded guilty in U.S. District Court for the Western District of Michigan to making false entries in financial records of the Lansing-based union.  Gonzales had been charged in August with embezzling $6,720 and then concealing the theft.  The actions follow a joint investigation by the U.S. Labor Department’s Office of Labor-Management Standards and the U.S. Postal Service’s Office of Inspector General. 

IRB Charges Northern California Teamster Boss with Corruption

Teamsters logoWhen the International Brotherhood of Teamsters and the Justice Department agreed last January to replace the tight government oversight established over 25 years earlier with union self-regulation, the terms called for phasing out the federal role over five years rather than lifting it all at once.  Dues-paying members may be grateful for such a precaution.  This February 10, the court-approved monitoring agency known as the Independent Review Board (IRB) issued a report charging Northern California Teamster leader Rome Aloise with various acts of corruption, including racketeering and influence-peddling.  Nearly two weeks later, Hoffa, after reviewing the report, filed charges against Aloise with the union disciplinary board.  Aloise has run for election on the Hoffa slate.  But loyalty alone might not be enough to save his job.

Letter Carriers Local Secretary-Treasurer in Missouri Indicted

Letter Carriers logoOn January 27, John McCain, former secretary-treasurer of National Association of Letter Carriers Branch 1016, was indicted in U.S. District Court for the Eastern District of Missouri on one count of embezzlement of $30,948 in funds from the Poplar Bluff, Mo. union.  The indictment follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.  

Arkansas IBEW Secretary-Treasurer Charged with Theft; Pleads Guilty

IBEW logoThe promotion was nice, but it couldn’t save Clinton Humphrey from being caught.  On January 26, Humphrey, formerly secretary-treasurer of International Brotherhood of Electrical Workers Local 386, was charged in U.S. District Court for the Western District of Arkansas with embezzling $51,811.70 in funds from the Texarkana, Ark.-based union.  He then pleaded guilty.  The actions follow a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

Postal Workers Treasurer in South Dakota Pleads Guilty

APWU logoFor nearly four years, Susan Haugen saw her union as a private bank.  Now she’s likely to spend some time in a public prison.  On January 26, Haugen, former treasurer of the state affiliate of the American Postal Workers Union, pleaded guilty in U.S. District Court for the Southern District of South Dakota to one count of embezzlement of funds in the amount of $30,782 from the Huron, S.D.-based union.  She had been indicted in November 2014 on three counts of stealing a combined more than $36,000 following a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

Cleveland Plumbers Office Secretary Sentenced for Theft

Plumbers and Pipefitters logoOn January 19, Heather Banhidy, former office secretary for United Association of Plumbers and Pipefitters Local 120, was sentenced in U.S. District Court for the Northern District of Ohio to two years of probation and 50 hours of community service for embezzling $13,906 from the Cleveland union.  She also was ordered to pay a $100 special assessment on top of the full restitution which she already had made.  Banhidy had pleaded guilty in October following her indictment in August.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

Illinois Maintenance of Way Secretary Pleads Guilty; Sentenced

BMWE logoOn January 15, Joshua Lewis, former secretary-treasurer of Brotherhood of Maintenance of Way Employees Division Lodge 212, pleaded guilty in U.S. District Court for the Southern District of Illinois for making false statements in financial records of the Gillespie (Macoupin County), Ill.-based union.  He then was sentenced to one year of probation and ordered to pay a $25 social assessment.  Lewis had been indicted in November.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

West Virginia Enacts Right to Work Law over Governor's Veto

New River Gorge Suspension Bridge, West VirginiaThe Right to Work juggernaut continues to roll in seemingly unlikely places.  On Friday, February 12, West Virginia Republican lawmakers overrode a veto by Democratic Governor Earl Ray Tomblin to pass legislation barring unions from forcing employers to fire workers who decline to pay dues.  The votes, 55-43 in the House of Delegates and 18-16 in the Senate – only a simple majority is required for a veto – make West Virginia the 26th state with such a law.  The measure had been introduced only a month earlier.  Mark Mix, president of the Springfield, Va.-based National Right to Work Committee, commented after the vote:  “Now, more than half of the states have enacted Right to Work laws to protect workers’ fundamental right to freedom of association.”  The state’s unions have a different view.

New Hampshire Nuclear Plant Security Steward Sentenced

Seabrook nuclear power plantOn January 12, Gregory Paradis, former chief steward of United Federation of Special Police and Security Officers Local 501, was sentenced in U.S. District Court for the District of New Hampshire to two years of probation for embezzling $13,493 in funds from the Seabrook, N.H. union.  He also was ordered to pay full restitution.  Paradis had pled guilty in October after being charged in August.  The union represents security workers at the Seabrook nuclear power plant.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

Delaware Steelworkers Secretary Charged with Embezzlement

Steelworkers logoOn January 12, Herbert White Jr., former secretary-treasurer of United Steelworkers Local 8936, was charged in U.S. District Court for the District of Delaware with embezzlement of $24,287 in funds from the Wilmington-based union.  The charge follows a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

Former AFGE Local President in Michigan Sentenced

AFGE logoOn January 5, Edward Mason, former president of American Federation of Government Employees Local 2274, was sentenced in U.S. District Court for the Eastern District of Michigan to two years of probation and ordered to pay $21,077 in restitution and a $25 special assessment for making false statements in the financial records of the Saginaw union.  He had pleaded guilty in September.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

Security Officers Treasurer in Colorado Sentenced

UGSOA logoOn January 5, Christopher Headlee, former treasurer of United Government Security Officers of America Local 50, was sentenced in U.S. District Court for the District of Colorado to one year of probation, and ordered to pay residual restitution in the amount of $1,947 (he previously paid $9,000) and a $25 special assessment, for falsifying financial data in a report submitted by the Durango-based union.  He had pleaded guilty last October.  The actions follow a probe by the Labor Department’s Office of Labor-Management Standards.

Southern Illinois Laborers Local Bookkeeper Sentenced

LIUNA logoOn January 7, Carolyn Hall, former bookkeeper for Laborers International Union of North America Local 1197, was sentenced in U.S. District Court for the Southern District of Illinois to two years of probation and ordered to pay a $100 assessment for embezzling $26,491 in funds from the McLeansboro (Hamilton County), Ill.-based union.  She had pleaded guilty last August after being charged that April.  Hall previously had made full restitution.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

LIUNA Business Manager in Phoenix Pleads Guilty

LIUNA logoOn January 4, Anne Susan, former business manager of Laborers International Union of North America Local 1386, pleaded guilty in Maricopa County, Arizona Superior Court to theft, identity theft and forgery.  She had been charged with a 24-count indictment last October 5.  Charged in a 29-count indictment the same day for forgery and other offenses was former Local 1386 treasurer Therlen Benally.  The union is based in Phoenix.  The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

Bay Area Cement Masons Bookkeeper Pleads Guilty; Sentenced

Plasterers & Cement Masons logoOn September 30, Maria Del Cupolo, former bookkeeper for Operative Plasterers & Cement Masons International Association Local 300, pleaded guilty in the Superior Court of California, County of Alameda, to one count of theft from the Oakland union.  She then was sentenced to five years of probation and ordered to pay restitution in the amount of $96,842.  Following this sentence, on December 2 she received an additional one-year sentence in the Alameda County jail.  Del Cupolo had been charged in January 2015 with five counts of grand theft in an amount exceeding $65,000, plus four counts of money-laundering.  The actions follow a probe by the U.S. Labor Department’s Office of Labor-Management Standards.

Secretary of UAW-Sponsored Group in Wisconsin Sentenced

United Auto Workers logoAt least Helen Genal is remorseful.  On January 25, Genal, former secretary-treasurer of the Fox Valley Area Community Action Program, a project of the United Auto Workers, was sentenced in U.S. District Court for the Eastern District of Wisconsin to six months in prison for embezzling $29,968 from the Oshkosh-based labor organization.  She pled guilty last November after being charged in July with one count each of embezzlement and making a false statement in union records.  The actions follow a probe by the Labor Department’s Office of Labor-Management Standards.

Detroit Operating Engineers Ex-Boss Charged with Theft, Conspiracy

Detroit skyline at duskAnyone who believes corruption in Detroit dissipated after the multiple convictions several years ago of former Mayor Kwame Kilpatrick should take a hard look at International Union of Operating Engineers Local 324.  On December 16, John Hamilton, business manager-general vice president of the Detroit union during 2003-12, was indicted by a federal grand jury on nine counts relating to various schemes of self-enrichment at the expense of rank and file.  The indictment, the result of a multi-agency probe, accuses Hamilton of extortion, structuring, money-laundering, embezzlement and honest services fraud.  The charges shed light not only on Hamilton’s relationship with Mayor Kilpatrick, but at least as importantly, his relationship with convicted financial manager John Orecchio, no stranger to these pages.

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