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. He’s now paying a price. Last Tuesday, October 13, Oldham, former president of American Federation of Government Employees Local 1900, was indicted by a federal grand jury for embezzling nearly $39,000 in funds from the Taunton, Mass. (south of Boston) union, making false statements on government financial reporting forms, and evading personal income taxes. He also was arrested that day. 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 after he took over from his predecessor. 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 ➡

Eleven New York Building Trades Union Officials Charged in Bribery Racket

New York City-area construction unions are well-known for being on the take. An announcement by the U.S. Department of Justice won’t likely alter that reputation. On October 1, the U.S. Attorney’s Office for the Southern District of New York announced the arrest and indictment of 11 officials of the New York State Building and Construction Trades Council for various charges related to their receipt of over $100,000 in bribes from nonunion contractors in return for bid-rigging, in the process selling out the dues-paying union members whom they represented. Led by Trades Council President James Cahill, the defendants are current or former members of two local affiliates of the United Association of Plumbers & Pipefitters. Aiding in the probe was the Suffolk County (Long Island), N.Y. district attorney’s office. All the defendants pleaded not guilty at arraignment.

It’s a common form of back-scratching in the world of organized labor: An employer, … Read More ➡

St. Louis Postal Handlers Treasurer Charged with Embezzlement

On October 7, Yvette Luster, former treasurer of National Postal Mail Handlers Local 314, was charged in U.S. District Court for the Eastern District of Missouri with one count of embezzlement in the sum of $184,138 from the St. Louis union. The charge follows an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.… Read More ➡