Hawaii Union HQ Seized by IRS

Unity House Inc., the hybrid labor organization created more than 50 years ago by union patriarch Arthur Rutledge, was seized Dec. 14 by federal agents investigating criminal charges against Rutledge’s son and grandson.  IRS agents took control of the Unity House headquarters in Honolulu at 7 a.m., following a restraining order issued by Sr. U.S. Dist. Judge Samuel King (HI, Nixon) that freezes some $42 million in assets.


Lawyers for Unity House President Anthony “Tony” Rutledge Sr. and various Unity House officials claimed that the move was an improper effort to deny Rutledge and his son Aaron their ability to defend themselves against criminal tax charges pending in federal court.  Aaron Rutledge is Unity House executive vice president.  The two were indicted in August 2003 on charges they skimmed hundreds of thousands of dollars from a corporation they headed and filed false tax returns on Read More ➡

Ex-NYC Elevator Constructors Boss Sentenced for Racketeering

Charles Novak, former V.P. and Business Agent of Local 1 of the Intl. Union of Elevator Constructors was sentenced on Dec. 1 after a jury convicted him of racketeering, racketeering conspiracy, receiving unlawful labor payments in violation of the Taft-Hartley Act, mail fraud, making false statements about benefit funds, money laundering and money laundering conspiracy.


U.S. Dist. Judge David Trager (E.D. NY, Clinton) sentenced Novak to 9 years in prison, 3 years of supervised release, and was ordered to pay restitution of $289,000, and a $15,000 special assessment. In addition, the court entered a forfeiture judgment in the amount of $300,000 against Novak and directed him to report to prison on February 1, 2005.  U.S. Attorney Roslyn Mauskopf also announced that an additional 36 defendants have pleaded guilty in connection with her Office’s investigation of this wide-ranging no-show jobs scheme that included extortion, witness tampering and obstruction of Read More ➡

Ex-NJ City Councilman Admits to Union Embezzlement

Daniel F. Kearney, a former Long Beach, NJ, city councilman, will begin a one-year federal prison sentence after the holidays, his lawyer confirmed in early December.  Kearney pled guilty Nov. 22 in U.S. Dist. Court to embezzling nearly $150,000 from Local 79 of the Laborers Intl. Union of N. America while he was secretary-treasurer from 2000 to 2002.  He was sentenced to one year of confinement and two years of probation, fined $100 and barred from holding a union office for 13 years.  Kearney also paid restitution of $149,330.12, made possible by the refinancing of his Arizona Avenue home.


Kearney was elected to the Long Beach City Council in November 2001, but resigned in June 2003 when questions began to surface about the union’s finances. At the time, he claimed he was resigning for health reasons, and Gina Guma, then the president of the Read More ➡

Ex-Ofc. Secy. Admits Embezzlement in Ore. Fed. Court

On November 11, 2004, in the United States District Court for the District of Oregon, Joy Torrance, former office secretary of Local 1094, Carpenters, pled guilty to embezzling $31,640.02 in union funds. An indictment filed on July 28, 2004, alleged that Torrance created and cashed unauthorized checks to herself and other third parties from the union’s checking, savings, and money market accounts. In addition, the indictment alleged that Torrance used the union’s credit card without authorization. The guilty plea follows an investigation by the OLMS Seattle District Office.


Frmr. Del. Treasurer Indicted

On December 7, 2004, in the United States District Court for the District of Delaware, Julie Messick, former treasurer of Local 2001, Carpenters, was indicted on five counts of embezzlement in excess of $10,000 in union funds. The indictment follows an investigation by the OLMS Philadelphia District Office.


Frmr. Ohio Pres. Sentenced for Read More ➡

Is Banned Teamster still Running Chicago Local?

Bill Hogan Jr. ruled Chicago‘s 100,000-member Teamsters empire with a sharp tongue and an iron fist.  But he was expelled in 2002 after being accused of undercutting his union by helping a nonunion company where his brother worked.  Stripped of his positions, Hogan was banned from ever associating with Teamsters again.


But in the 2-1/2 years since his exile, Hogan has maintained ties to high-level Chicago Teamsters, talking to them on the phone and meeting them at restaurants, his home, even at union functions, the Chicago Sun-Times has learned. Hogan insists the contacts have been casual and no union business was discussed.   Internal union investigators have concluded, however, that Hogan continues to be a powerful force behind the Teamsters — and perhaps is even running things in Chicago through intermediaries.


The Independent Review Board, the government-anointed watchdog that kicked Hogan out, is taking a Read More ➡

DOL Sues Plumbers’ Union Benefit Trustees Over Calif. Resort

The U. S. Dept. of Labor has sued current and former trustees, the plan administrator, and Local 38 of the United Association of Plumbers, Pipefitters and Journeymen.  DOL charges that the officials diverted more than $36 million in assets of five employee benefit plans to renovate and operate the Konocti Harbor Resort and Spa facilities on Clear Lake in Kelseyville, Calif.


“The Plumbers plan officials mismanaged the investments and placed the benefits of thousands of union workers at risk,” said U. S. Secretary of Labor Elaine L. Chao. “This Administration is committed to protecting the employee benefits of America’s workers, and we won’t hesitate to act when plan officials are not managing their workers’ benefits responsibly.


The lawsuit alleges trustees Lawrence J. Mazzola, business manager and financial secretary-treasurer of Local 38, Lawrence Mazzola, Jr., William B. Fazande, Larry Lee, James R. Shugrue, Vohon J. Kazarian, Read More ➡

Ex-Finance Director Admits Huge Embezzlement

The former finance director of the benefit plan for the American Fedtn. of TV & Radio Artists is scheduled to be sentenced on Dec. 15 for embezzling $1.36 million from the union fund.  A press release issued last week by AFTRA trustees states Robert Cataldo used “his access to the Funds’ financial records, and his unique knowledge of the Funds’ internal accounting controls for which he was responsible, to perpetrate and conceal his theft.”  The finance chief made “improper entries into the Funds’ financial records to make it appear as though the monies that he embezzled were actually used for legitimate Funds’ purposes.”


U.S. Dist. Judge Naomi Reice Buchwald (S.D. NY, Clinton) will sentence Cataldo.  Federal law requires that Cataldo pay back the stolen monies; he will also be fined anywhere from $7,500 to $75,000. His sentence must fall within federal guidelines and will run from 37 to 46 months.Read More ➡

Buffalo-Area Union Member Acquitted in Beating

Federal prosecutors failed Nov. 24 in the first of three labor racketeering trials aimed at Laborers Local 91 in Niagara Falls.  A jury acquitted union member Mark LoStracco, 34, of taking part in a 1998 picket line attack that injured a truck driver who had just made a food delivery to the Clarion Hotel in downtown Niagara Falls.


A brick was thrown through the truck window into the driver’s face, breaking his nose in three places.  Defense attorney Damon A. DeCastro said LoStracco was not the man who threw it. “The government attempted to make a case of guilt by association,” DeCastro said after the verdict. “I kept asking the jury to separate what Mark did from what was done by other union members and union leaders.”


Authorities had alleged that LoStracco was involved in one incident that was part of labor racketeering activities that Read More ➡

Ex-Mob Enforcer Testifies to Mob Control of NYC Unions

Murderous mob turncoat Frankie “Fapp” Fappiano testified on Nov. 23 that he delivered construction payoffs to Gambino crime family boss Peter Gotti.  He also said that the Gambino crime family’s grip on organized labor let him and other mobsters on union payrolls cash in on construction assignments at Trump Tower, the IBM building and the MTA’s Lexington Avenue subway. 


Fappiano, who pleaded guilty in the hit on suspected mob snitch Ed Garofalo, also fingered Gotti’s co-defendant, Thomas “Huck” Carbonaro, as one of the drivers who participated in the murder.  He said that he collected kickbacks in exchange for labor peace or enabling the firms to use cheaper, non-union labor, and that the Gambinos and other crime families pocketed “millions and millions of dollars” over two decades. 


Gotti is charged with plotting to rub out Gambino underboss-turned-mob-turncoat Salvatore “Sammy Bull” Gravano, whose testimony put his Read More ➡

Last Sentencing in Case of Mobbed-up NJ Local

Eugene G’Sell, the last of the federally convicted figures associated with Bayonne Local 1588 of the Intl. Longshoremen’s Assn., won’t be spending any time behind bars.  U.S. Dist. Judge Mary L. Cooper (N.J., G.H.W. Bush) on Nov. 18 sentenced G’Sell to serve a year’s probation, pay a $100 special assessment and make restitution to the Local — either individually or collectively with co-defendants — of the more than $900,000 that government prosecutors said was embezzled from the union.


Newark attorney Kevin Marino, representing G’Sell, had asked the court to show leniency toward G’Sell because of the defendant’s poor health and his cooperation with federal prosecutors.  Three years ago, G’Sell, a former Local 1588 president pled guilty to participating in a conspiracy to steal money from the local by diverting part of their union paychecks to former hiring agent Joseph Lore Jr., whom the government called a Genovese Read More ➡