NYC Local Boss Re-Sentenced for Role in Construction Union Ghost-Worker Scam

Charles Novak thought he got a bum rap at his original sentence, so he sought leniency afterward. He got it, too, though in an amount that makes one wonder whether the effort was worth it. The former vice president and business agent of International Union of Elevator Constructors Local 1 had been doing time in federal prison for two years following his jury conviction for helping to operate a ghost-worker scheme at nearly 20 high-rise construction sites in the New York City area. On February 6, the U.S. District Court for the Eastern District of New York re-sentenced him to 97 months in prison, a slight reduction from the original nine-year sentence, plus three years of supervised release, that U.S. District Judge David Trager handed him in December 2004. Novak also had been ordered to pay $289,000 in restitution and a $15,000 special assessment, and forfeit $300,000 in assets.    

Novak was part of a massive racketeering enterprise that spanned from 1989 to 2001, and that also involved Locals 14 and 15 of the International Union of Operating Engineers. Novak, who recruited workers for his Queens, N.Y.-based union and set work schedules, helped inflate project costs by as much as $5 million. In return, he and his lieutenants received cash and other things of value from contractors. In the process, the conspirators sold out rank-and-file union members, who lost their right to monitor contractor compliance with established collective bargaining agreements. More than three dozen union officials, contractors and associates wound up pleading guilty to various racketeering, conspiracy, fraud and money-laundering charges. The guilty pleas followed a joint investigation by the FBI, the IRS, and the Labor Department’s Office of Labor-Management Standards and Employee Benefits Security Administration.  (OLMS, 2/16/07; other sources).