Security Guard Employees President in Maryland Sentenced

For Sandra King, heading two unions meant double the opportunities to steal. It also meant double the risks of getting caught and punished. On October 19, King, former president of the Federation of Police & Security and the Alliance of Independent Workers, was sentenced in U.S. District Court for the District of Maryland to five months in prison, five months of home detention and two years of supervised probation for embezzling funds from the unions, each based in Owings Mills (near Baltimore), Md. She also was ordered to make restitution in the amount of $57,328.01 She had pleaded guilty in July after being charged in June. The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.

The Federation of Police & Security (FOPS) and the Alliance of Independent Workers (AIW) represent private security employees in Washington, D.C. and Bethesda, Md. Sandra King ran each union starting … Read More ➡

Labor Department Calls Out Steelworkers, AFGE

Longtime readers of this publication no doubt have a sense of which unions are most prone to internal theft. The U.S. Department of Labor certainly does. In separate letters dated October 6, the DOL warned United Steelworkers President Thomas Conway and American Federation of Government Employees (AFGE) President Everett Kelley that their unions are “disproportionately subject to embezzlement.” Anonymous DOL officials told the Daily Caller News Foundation, which had obtained copies of the letters, that such a step is “very rare.” The two labor organizations, respectively, represent about 575,000 and 323,000 members, and have combined assets worth around $1.4 billion. The action suggests that the department is giving extra attention to monitoring annual financial reports of unions generally.

The United Steelworkers, headquartered in Pittsburgh, has seen its share of thefts in the last couple years. This September, Brian Arnold, former financial secretary for the Elmira, N.Y.-based Steelworkers Local … Read More ➡

Canadian Woman Issued Arrest Warrant for Defrauding Union

Where in the world is Margarita Faundez? A lot of people in Canada have been asking that question these past several months, especially in Ottawa. Back on March 26, Ottawa police announced they had issued a warrant for her arrest for defrauding an unnamed labor union of more than $19,000 during 2015-16, a period in which she ran the union. According to authorities, Ms. Faundez, now 58, a resident of Ottawa and a program officer with Immigration, Refugees and Citizenship Canada, a national government agency, wrote herself about 50 union checks while serving as the union’s interim president and treasurer. The police probe follows an internal investigation by the union. Perhaps she can turn herself in already and explain a few things.… Read More ➡

Rhode Island Contractors Indicted in Massive Double-Breasting Scheme

Jesus Jose Mendez and Jamie Zambrano kept two sets of books and got rich – for a while anyway. On October 9, the pair, owners of a drywall firm in Woonsocket, R.I., were indicted in U.S. District Court for the District of Rhode Island on 28 counts related to fraud, tax evasion and structuring. The scam netted them millions of dollars. The case has all the hallmarks of “double-breasting,” a common practice in non-Right to Work states in which an employer under union contract sets up a parallel nonunion company for the purpose of avoiding compliance. While this setup isn’t necessarily illegal, it usually is. The identity of the union has been withheld for now. The indictment follows a joint probe by the IRS, the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General, and Rhode Island State Police.

Jesus Jose Mendez, now 43, and Jamie Zambrano, … Read More ➡

FBI Raids Office of Philadelphia Electrical Workers Local

Don’t tell International Brotherhood of Electrical Workers Local 98 that lightning can’t strike twice in the same place. For them, it’s now happened. Around 7 A.M., October 16, FBI agents raided the headquarters of the Philadelphia union in search of evidence of threats of violent retaliation by union leaders against certain dissenting members. Authorities would not say if the search was related to an August 2016 FBI raid connected to an influence-peddling scandal implicating IBEW Local 98 Business Manager John Dougherty, Philadelphia City Council Member Bobby Henon, and certain other persons. That case produced multiple indictments a couple years later for bribery, embezzlement, concealment, and tax evasion. A former City official and an unindicted contractor thus far have pleaded guilty.

IBEW Local 98, with about 5,000 active members, for decades has been close to Philadelphia’s construction industry and City Hall. Some might say too close. On January 30, 2019, a … Read More ➡

Laborers Business Manager in West Virginia Sentenced for Embezzlement

On October 15, Rick Drain, former business manager for Laborers International Union of North America Local 1085, was sentenced in U.S. District Court for the Southern District of West Virginia to one year and one day in prison, plus one year of supervised release, for embezzling $50,281 from the Parkersburg-based union. He had pleaded guilty in July after being charged in March. The actions follow a probe by the U.S. Labor Department’s Office of Labor-Management Standards. As Union Corruption Update has explained, Drain over a decade ago had been accused of stealing union funds by a former employee as part of an unlawful termination civil suit. He managed to escape accountability on that occasion. This time, he wasn’t so lucky. … Read More ➡

AFGE Secretary-Treasurer in Texas Charged with Wire Fraud

On October 13, KaSandra Hall, former secretary-treasurer of American Federation of Government Employees Council 235, was charged in U.S. District Court for the Western District of Texas with one count of wire fraud in the sum $12,765 from the Killeen-based labor organization. The indictment follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.… Read More ➡

Louisiana AFGE President Pleads Guilty to Forgery

On September 30, Matthew Cuomo, former president of American Federation of Government Employees Local 1047, pleaded guilty in U.S. District Court for the Eastern District of Louisiana to one count of forging over 50 checks worth about $15,000 against the Kenner, La. union, which represents Transportation Security Administration employees. Cuomo had been charged this past July. The actions follow an investigation by the Labor Department’s Office of Labor-Management Standards.    … Read More ➡

Labor Department Seeks Tougher LM-2 Form to Fight Corruption

Despite all the legal disincentives, many of the people running our unions continue to engage in fraud and embezzlement. In response, the U.S. Department of Labor has come up with new forms of prevention. On September 30, the DOL’s Office of Labor-Management Standards (OLMS) unveiled a series of changes to its LM-2 annual reporting document for large unions; i.e., unions taking in at least $250,000 a year. First, these labor organizations must spell out more fully how they pay for assets, hotel stays, restaurants and other items that all too often are hidden under generic categories such as “miscellaneous.” Second, the largest of these unions – those with annual receipts of at least $8 million – must file a new “long form” LM-2. Labor leaders understandably oppose this. But the proposal addresses real financial crimes, which though frequently detected and punished, require more detailed monitoring.   

Annual financial reporting by unions … Read More ➡

Massachusetts AFGE President Indicted for Fraud, Tax Evasion

Michael Oldham gambled over his head. Soon he may pay a heavy debt. Last Tuesday, October 13, Oldham, former president of American Federation of Government Employees Local 1900, was indicted in U.S. District Court for the District of Massachusetts for embezzling nearly $39,000 in funds from the Taunton (south of Boston) union, making false statements on financial reporting forms, and evading personal income taxes. He was arrested that day as well. The union represents military and civilian Army mechanics at the former Fort Devens in Massachusetts. The indictment follows an investigation by the Labor Department’s Office of Labor-Management Standards.

Oldham, a resident of Whitman, Mass., headed AFGE Local 1900 during 2016-18. His alleged acts of wire fraud and related crimes began shortly assuming position. Insisting that union bank statements be mailed to his home rather than union office, he issued union checks to himself, funneling the money into a personal … Read More ➡