Former Buffalo, N.Y. Musicians Union Head Pleads Guilty

Depression can strike anyone.  But when Mark R. Jones was afflicted, his response was to rip off his union.  On July 26, Jones pleaded guilty in U.S. District Court to embezzling $74,000 from local and state affiliates of the American Federation of Musicians.  He had served as president and secretary-treasurer of Musicians Local 92 and secretary-treasurer of the New York State Conference of Musicians.  He also had headed the Buffalo AFL-CIO Council until his resignation last December from that 98,000-member body.  He cited as his main reason an ongoing battle with depression. 

 

An audit by the Department of Labor turned up a pattern of irregularities, triggering a criminal investigation.  As it turned out, Jones, 48, had embezzled $40,000 in funds from his local and another $34,000 from the state organization.  He sometimes charged items on the local union’s credit card, and Read More ➡ “Former Buffalo, N.Y. Musicians Union Head Pleads Guilty”

IBT Report Attempts to Discredit Ex-Watchdog Stier

The Chicago Sun-Times has obtained a draft of an internal Teamster report that attempts to discredit the union’s former ethics watchdog, who charged the union hierarchy with squelching his efforts to investigate corruption within the union.  The report was put together by former federal prosecutor Edward McDonald report, and claims that Edwin Stier was bent on keeping the paychecks coming for his staff, and that he ignored directives from the office of James P. Hoffa, president of the Intl. Brotherhood of Teamsters. 

 

Stier, who resigned a year ago, said on April 20 that he hadn’t seen the McDonald document.  But he had a notion of its findings, which he termed “bulls—,” a “whitewash” and an attempt by Hoffa to save face as he geared up for re-election.  “I think this is the beginning of a fight I’m prepared to take on,” Stier said, adding he Read More ➡ “IBT Report Attempts to Discredit Ex-Watchdog Stier”

Stockbroker Sentenced for Stealing from Union Investments

A federal judge in Albany, N.Y. has sentenced a stockbroker on April 12 for stealing more than $400,000 from a union employee benefit fund.  U.S. Senior District Judge Thomas McAvoy ordered Anthony DiPace, 47, to serve a prison term concurrent with his 2 ½ year sentence received in January 2004 on a separate conviction for mail fraud in Hawaii. 

 

DiPace became investment manager for LIUNA’s Local 190 in September 1988.  Between August 1993 and April 1996, prosecutors charged, he made at least 40 corporate bond trades involving the assets of the local’s benefits plan.  DiPace had served as investment manager and broker, despite the apparent conflict of interest.  He generated a commission for himself on each trade, in all charging the union $420,482 in unauthorized commissions. 

 

In addition to his sentence, DiPace must provide restitution to the benefits plan of Read More ➡ “Stockbroker Sentenced for Stealing from Union Investments”

DOL Planning Stepped-up Audits of Union Finances

The U.S. Dept. of Labor aims to toughen its regulation of Big Labor greater scrutiny of spending and hiring practices, and will continue to increase sharply the number of financial audits of individual unions, reports Dan Roberts of the London Financial Times.  DOL officials say the measures are necessary to make unions more accountable to their members and to root out any corruption or mismanagement.

 

Despite declining membership, unions continue to be a thorn in the side of big business, orchestrating campaigns against companies such as Wal-Mart and using their influence over pension funds to press for corporate governance reform.

 

Now the Bush administration is turning the tables on these critics.  New proposals under discussion would enforce long-neglected rules requiring unions to disclose conflicts of interest, such as business dealings with family members.  And starting in June, unions will also have to file much more detailed financial statements, including Read More ➡ “DOL Planning Stepped-up Audits of Union Finances”

RI Mobster Pleads in Case where LIUNA Offices were Searched

A high-ranking mobster in the Patriarca crime family and laborers union member has agreed to plead guilty to cocaine trafficking charges stemming from his arrest in an FBI sting operation two months ago.  Matthew L. Guglielmetti has signed a plea agreement admitting that he conspired to distribute and possessed with intent to distribute more than 5 kilograms of cocaine.  The plea agreement was filed March 30 in the U.S. District Court in Providence.

 

The arrest of Guglielmetti is part of a larger federal, state and local investigation. When Guglielmetti was arrested on Jan. 20, the authorities raided a concrete company in Cranston; a construction/real-estate firm in Warwick; and a Providence office building that houses the New England regional office of the Laborers Intl. Union of N. America. According to union spokesmen, the search was of the New England Laborers’ Labor-Management Cooperation Trust, an entity related to, but Read More ➡ “RI Mobster Pleads in Case where LIUNA Offices were Searched”

Fed. Judge Throws out Union Trustees of NJ Benefit Fund

A federal judge has removed the administrator and two trustees of a New Jersey union’s benefit funds that are now the focus of an ongoing federal corruption probe.  Citing serious questions about possible financial misconduct within Local 734 of the Laborers’ Intl. Union of N. America (LIUNA), U.S. District Judge Dennis Cavanaugh in Newark said he would appoint substitute trustees to oversee the local’s pension and welfare funds, pending a new election.

 

Attorney David Grossman, who represents funds administrator Peter Rizzo, said on April 7 that they are considering an appeal.  He also urged the appointment of Edwin H. Stier as the court-appointed administrator.  Stier, a former federal prosecutor, spent a decade as trustee cleaning up the pervasive mob influence within Teamsters Local 560 in northern New Jersey.  More recently, he served as the internal ethics watchdog on the Intl. Brotherhood Of Teamsters, before resigning Read More ➡ “Fed. Judge Throws out Union Trustees of NJ Benefit Fund”

Ex-Treasurer Admits Embezzlement in Minn. Fed. Court

On March 23, in the U.S. District Court for Minnesota, Dana Lockwood, former treasurer of Local 49, the Intl. Assn. of Heat & Frost Insulators & Asbestos Workers, pled guilty to a one-count information charging him with embezzling $64,255 in union funds.  The guilty plea follows an investigation by the Minneapolis Resident Investigator Office of the U.S. Office of Labor-Mgmt. Standards. [OLMS, 4/4/05]

 

Ga. Union Ordered to Conduct New Election

On March 4, in the U.S. District Court for the Northern District of Georgia, Local 527 of the Graphic Communications Intl. Union, was ordered to conduct a new election within 120 days under the Secretary of Labor’s supervision.  On February 3 of this year, the Court had previously granted the Department of Labor’s motion for Summary Judgment. The Local, however, responded by filing a Motion to Alter or Amend Judgment and a Motion to Stay Enforcement of Read More ➡ “Ex-Treasurer Admits Embezzlement in Minn. Fed. Court”

Hoffa Fires his “Chief of Staff”

Carlow Scalf, a former Detroit Teamsters boss and former top aide to Intl. president James P. Hoffa the past six years, has been fired amid allegations that he improperly received a housing allowance of more than $69,000.  Scalf was identified last year by Edwin Stier, the union’s former internal investigator, as the person most responsible for shutting down his probe of mob influence in Chicago locals.  Stier resigned last May, perceiving that Hoffa was “no longer committed” to ridding the union of organized crime.

 

The union did not announce Scalf’s firing. His fate was revealed in a letter from a Teamsters attorney to a federal court judge who oversees union affairs.  “General President Hoffa rescinded Scalf’s appointment as Executive Assistant March 12th,” attorney J. Bruce Maffeo wrote U.S. Dist. Judge Loretta A. Preska (S.D.NY, GHW Bush).  The Teamsters agreed to court supervision in 1989 as Read More ➡ “Hoffa Fires his “Chief of Staff””

DOL Wins $4.3 Million Settlement in Cap Consultants Case

The U. S. Dept. of Labor has obtained settlement agreements providing for restitution of $4,312,063 to 10 pension and health plans in Arizona, Colorado, Minnesota and Ohio that invested plan assets in risky private placement schemes with Capital Consultants, LLC.  The consent orders also require payment of $862,413 in civil penalties to the government.

 

“Capital Consultants and plan fiduciaries betrayed the men and women whose benefit plans they were entrusted with,” said U.S. Secy. of Labor Elaine L. Chao.  “The department’s legal actions in these cases will restore more than $4.3 million in lost assets to pay benefits to thousands of union workers.”  Capital Consultants was a registered investment manager that provided investment services to more than 60 primarily union-sponsored pension and health plan clients governed by federal employee benefits law.  Since April 2002, DOL has sued trustees of 33 union plans in Arizona, California, ColoradoRead More ➡ “DOL Wins $4.3 Million Settlement in Cap Consultants Case”

Ex-Dem Party Boss Charged with Bankrupting NJ Union

Charles Cart, the former Democratic Party boss for Sussex County, appeared in federal court on March 22 and pled not guilty to allegations of embezzlement and money laundering that bankrupted a local union he founded and once ran.  The same day, Cart was sued by Stacey Melendy, who accused Cart of firing her from his medical company after she got pregnant and refused to get an abortion.

 

Cart was indicted last month on charges that he and two other men embezzled $284,000 from the United Service Workers Local 16, mainly through a health fund administered by Cart’s company, Health Choice Inc.

 

Cart appeared Friday together with his two co-defendants, Charles Wiener — Cart’s step-father — and Marvin Raphael, both of whom also pled innocent.  A federal magistrate set bail for the three men at $200,000 each and ordered them to surrender their passports and whatever Read More ➡ “Ex-Dem Party Boss Charged with Bankrupting NJ Union”