Trustees of Queens, N.Y. Local Sued by Labor Department

Workers belonging to Local 1175 of the Material Yard Workers are hoping they will collect all of the retirement money due to them.  Given the allegations made against some of their leaders, it’s not a safe bet.  On June 7, The Department of Labor filed a civil suit in U.S. District Court in Manhattan against four trustees of the Queens, N.Y.-based union – Fred Clemenza, Anthony Ferrari, Frank Castiglione and Richard Grace.  The DOL charges that the four had diverted retirement plan funds to pay for union member salaries and for services not directly related to the plan.  Also named in the suit were the union’s Pension, Welfare and Annuity Funds and its Pension Fund Building Holding Corporation.  The Material Yard Workers are an affiliate of the Laborers International Union of North America.

 

The complaint alleges acts of misconduct took place during 1998-2003, but did not specify the amount of funds embezzled; that figure will be determined later by the federal court.  It does state, however, that the accused trustees caused or permitted the two funds to pay a portion of the salaries and severance pay of the union’s secretary-treasurer and a second employee.  The suit additionally accuses Clemenza and his brother, Charles, of charging personal expenses to the fund without establishing that the purchases were reimbursable.  The suit seeks to have the trustees restore all losses plus interest or lost opportunity costs, and to permanently bar the four from serving as service providers to any ERISA-covered retirement plans.  “The law is very clear,” said Assistant Secretary of Labor Ann Combs.  “Plan assets must be used to benefit workers who have earned them.”  (Queens Chronicle, 6/29/06; U.S. Department of Labor, 6/21/06).