Four Indicted in Southern California Pain Clinic Scam; ILWU Plan Loses $3M

The ingenuity underlying health care fraud in America is almost boundless. A recent bust of a scam in Southern California is a prime example. In the first week of February, federal agents arrested four persons for fleecing two benefit plans out of a combined $22 million of which $3 million came from an affiliate of the International Longshore and Warehouse Union (ILWU). The defendants – James Nate Bell, Regina Piehl, Michael Edwards and Sara Samhat – had been indicted on January 29 by a Santa Ana federal grand jury for collecting insurance reimbursements based on unnecessary compound cream prescriptions. The actions follow an ongoing probe by the FBI, the IRS, the Defense Department, and the Labor Department’s Office of Inspector General and Employee Benefits Security Administration.

The last decade has been rife with health plan fraud. In the Chicago area, for example, Dr. Richard Kolbusz received $2.6 million in phony … Read More ➡

Ex-Head of Maine Union Co-op Named in Racketeering Suit

The annual Maine lobster catch might not be in trouble, but certain people who sell it are. On December 5, Lobster 207, a wholesale marketing cooperative owned by the Maine Lobstering Union, an affiliate of the International Association of Machinists and Aerospace Workers, filed a civil racketeering complaint in Bangor federal court against its former head, Warren Pettegrow, his company Poseidon Charters Inc., and three other persons. The suit alleges the defendants engaged in a two-year scheme to loot the co-op. The union for now is seeking a $1.94 million lien on defendant properties. Pettegrow is denying all charges. Thimi Mina, the Portland attorney representing Lobster 207, asserts the alleged thefts “caused significant financial injuries.”

This crustacean tale of woe has its origins in 2017, after the Maine Lobstering Union purchased the wholesale operations of Trenton Bridge Lobster Pound for $4 million from Anthony and Josette Pettegrow, parents of Warren … Read More ➡

Teamsters Bookkeeper in Tennessee Sentenced for Records Fraud

On March 11, Judith Barker, former bookkeeper for International Brotherhood of Teamsters Local 519, was sentenced in U.S. District Court for the Eastern District of Tennessee to two years of probation, and ordered to pay $5,400 in restitution and a $25 special assessment, for concealing thefts in the records of the Knoxville-based union. Barker had pleaded guilty in November. The actions follow a probe by the U.S. Labor Department’s Office of Labor-Management Standards. … Read More ➡

FBI Probes $500K+ in Border Patrol Union Missing Funds

The U.S. Border Patrol protects our borders against persons who attempt to enter our country illegally. It’s risky and often thankless work. Some of its former members, however, may have performed thankless work of a lesser kind: looting their union. A report published in late February by ProPublica and then in other news outlets revealed that the FBI is investigating the disappearance of more than $500,000 from the bank accounts of the National Border Patrol Council, centering on the local for the El Paso sector. Council President Brandon Judd apprised his agents of the situation last November. “We know the FBI is looking into it,” he said. Rumors had been circulating that the finances of the Washington, D.C.-based union, an affiliate of the American Federation of Government Employees, are in disarray.

Border protection is a necessary function of any nation. And agents for the U.S. Border Patrol, part of U.S. … Read More ➡

Steelworkers Secretary in Tennessee Charged; Pleads Guilty and Is Sentenced

On March 9, Joshua Greer, former financial secretary of United Steelworkers Local 9-212, was charged in U.S. District Court for the Western District of Tennessee with one count of knowingly making false statements in Department of Labor financial reporting forms on behalf of the Jackson, Tenn.-based union. He then pleaded guilty. Following the guilty plea, the court sentenced Greer to one year of probation and ordered him to pay $116 in residual restitution and a $25 special assessment. He already had paid restitution in the sum of $2,501. The actions follow a probe by the U.S. Labor Department’s Office of Labor-Management Standards.… Read More ➡

AFGE Secretary in North Carolina Charged with Fraud; Pleads Guilty

On March 11, Rudy Ziegler, former secretary-treasurer for American Federation of Government Employees Local 446, was charged in U.S. District Court for the Western District of North Carolina with one count of wire fraud in the amount of $5,276 against the Asheville union. He then pleaded guilty. The charge and plea follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.  … Read More ➡

Workers United Midwest Board Comptroller Pleads Guilty to Conspiracy, Wire Fraud

On February 27, Robert Kurtycz, former comptroller for Workers United’s Chicago and Midwest Regional Joint Board, pleaded guilty in U.S. District Court for the Northern District of Illinois to one count of conspiracy to commit commercial bribery and one count of wire fraud in relation to his receipt of unauthorized expense reimbursements totaling $85,962. The Chicago-based joint board, like Workers United, is an affiliate of the Service Employees International Union. He had been indicted last May on the conspiracy count plus six counts of wire fraud. The actions follow a joint probe by the U.S. Labor Department’s Office of Labor-Management Standards, Office of Inspector General and Employee Benefits Security Administration.… Read More ➡

Laborers Business Manager in West Virginia Charged with Embezzlement

Rick Drain might be going down the drain. Some would call that poetic justice. On March 2, Drain, former business manager of Laborers International Union of North America Local 1085, was charged in an information in U.S. District Court for the Southern District of West Virginia with embezzling $50,281 in funds from the Parkersburg-based union, which represents several hundred construction and public service employees. The charge follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards. There is a story within the story here. For this case has its roots in events of more than a decade ago.

Back in July 2009, an Ohio woman, Debra Ann Pryor, had named LIUNA Local 1085 and Rick Drain as co-defendants in a civil rights suit in Wood County (West Virginia) Circuit Court. Pryor, the local office manager for several years until her dismissal, had claimed she was fired in retaliation … Read More ➡

Labor Department Issues Final Rule to Halt Union Trust Fund Abuse

Union health, retirement and other benefit funds all too often serve as incubators for fraud and embezzlement. The U.S. Department of Labor, after over 15 years, may be on the verge of realizing an oft-thwarted tool for dramatically reducing these thefts. On March 6, DOL’s Office of Labor-Management Standards (OLMS) published a final rule requiring labor organizations with total annual receipts of at least $250,000 to file a financial report, Form T-1, detailing how their trust funds are spent. “Full disclosure of trust operations gives workers the information they need to make informed choices, and more information means better decisions,” said OLMS Director Arthur Rosenfeld. The regulation is effective April 6. But unions may go to court to block it – something they did twice, and successfully, during the Bush years.

As with any type of organization, labor unions present opportunities for illegal self-enrichment. That’s especially true for their health, … Read More ➡

President of Arkansas Electrical Workers Local Charged with Theft

On March 6, Michael Johnson, former president and business manager of International Brotherhood of Electrical Workers Local 1658, was charged in U.S. District Court for the Eastern District of Arkansas with one count of embezzling $9,317 in funds from the Pine Bluff union. The charge follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.… Read More ➡