benefit fraud

IBEW Business Manager in Pennsylvania Sentenced for Benefit Fraud

Posted on by Carl Horowitz

Melvin Fishburn couldn’t delay the inevitable forever. Belatedly, he is going away for a while. On March 5, Fishburn, former business manager for International Brotherhood of Electrical Workers Local 743 and a trustee of the pension plan of the Reading, Pa.-based union, was sentenced in U.S. District Court for the Eastern District of Pennsylvania to 15 months in prison plus three years of supervised release for stealing funds from the plan. He also was ordered to pay $81,413 in restitution and an $800 special assessment. He had pleaded guilty last July to four counts each of embezzlement and wire fraud. The actions follow an investigation by Labor Department’s Office of Inspector General and the Employee Benefit Security Administration.

According to prosecutors, Fishburn, now 57, a resident of Charleston, S.C., during July 2010-June 2014 concocted an elaborate scheme to divert retirement plan assets to his own personal use. He created a … Read More ➡

Contractor Sentenced for $1.5M Ripoff of Pennsylvania Faculty Union Health Plan

Posted on by Carl Horowitz

Michael Buchanan had overbilling down to a fine science. He is now paying the price. On February 27, Buchanan, founder and former operator of a Harrisburg, Pa.-based dental and vision claims processing service, was sentenced in U.S. District Court for the Middle District of Pennsylvania to 37 months in prison, to be followed by three years of supervised release, for stealing nearly $1.5 million from a benefit fund sponsored by the Association of Pennsylvania State College and University Faculties. He also was ordered to pay full restitution, part of which will include his brokerage account funds. Buchanan had pleaded guilty last May to one count of health care fraud. The actions follow an investigation by the FBI and the U.S. Labor Department’s Office of Inspector General.  

The Association of Pennsylvania State College and University Faculties (APSCUF) for nearly 50 years has served as the collective bargaining representative for about 5,000 … Read More ➡

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

Posted on by Carl Horowitz

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 ➡

Labor Department Issues Final Rule to Halt Union Trust Fund Abuse

Posted on by Carl Horowitz

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 ➡

Southern California Independent Union Boss Convicted of $800K Embezzlement

Posted on by Carl Horowitz

The Romeros no longer are a family that stays together let alone steals together. On February 12, John S. Romero, former president of United Industrial and Service Workers of America (UISWA), was convicted by a jury in Los Angeles federal court of 14 felony charges related to the theft of nearly $800,000 from the health care plan of the Colton (San Bernardino County), Calif.-based union. His wife, son and daughter already have testified for the prosecution after pleading guilty to various charges. The four were arrested and indicted five years ago following an investigation by the Labor Department’s Office of Labor-Management Standards, Office of Inspector General and Employee Benefits Security Administration. Sentencing for the elder John Romero is set for April 27. He faces up to 130 years in prison.

National Legal and Policy Center has covered this case before (here and here). John S. Romero, now 73, … Read More ➡

Insurance Executive in New Jersey Sentenced for Role in $6.6M Scam

Posted on by Carl Horowitz

Lawrence Ackerman isn’t going to spend too much time behind bars, but his business career deservedly is over. On January 15, Ackerman, founder of two fake health insurance brokerages, was sentenced in Trenton, N.J. federal court to six months in prison and six months of home confinement for his role in a $6.6 million fraud scheme. He also was ordered to pay $1 million in restitution to the welfare fund of United Auto Workers Local 2326, now based in South River, N.J. Ackerman had pleaded guilty in December 2018 after being indicted in January 2017. His partner in crime, former union president Sergio Acosta, was sentenced a little over a year ago to three years of home confinement, and ordered to pay $32,000. The actions follow a probe by the Labor Department’s Office of Labor-Management Standards, Office of Inspector General and Employee Benefits Security Administration.

Lawrence Ackerman, now 55, a … Read More ➡

Top Ten Union Corruption Stories of the Year

Posted on by Carl Horowitz

Perhaps more than usual, corruption stories in 2019 involved the overlapping worlds of unions and politics. In Chicago, former Teamster boss John T. Coli Sr., whose ability to cut deals with City Hall and the Illinois legislature for years went virtually unchallenged, pleaded guilty in July to shaking down a television studio owner. One of his allies, State Senator Tom Cullerton, was hit with multiple embezzlement charges. In Boston, two city officials were convicted of putting the squeeze on a concert promoter on behalf of a Theatrical Employees local. In Philadelphia, an Electrical Workers business manager and seven other persons, including a city councilman, were indicted in January for embezzlement, wire fraud and bribery; a contractor and a fundraiser subsequently pleaded guilty.

The overlap of union and government interests was especially marked in the public sector. Unions, still smarting from the Supreme Court’s Janus ruling in 2018, … Read More ➡

Carpenters Benefits Manager in New Jersey Indicted for $1.5M+ Fraud

Posted on by Carl Horowitz

For George Laufenberg, there seemingly were no limits when it came to his pay. That’s why he’s no longer getting paid. On September 27, Laufenberg, former benefit funds administrator for certain New Jersey and New York affiliates of the United Brotherhood of Carpenters and Joiners, was indicted by a Newark federal grand jury on five counts related to his stealing more than $1.5 million in dues-funded plan assets. Alleged offenses include embezzling from an annuity fund, hiring a friend for a virtual no-show job, and concealing such schemes in a financial report. His attorney insists that his client is innocent. The indictment follows an investigation by the U.S. Labor Department’s Office of Inspector General and Employee Benefits Security Administration, plus the Port Authority of New York and New Jersey.

George Laufenberg, now 69, a resident of Harvey Cedars (Ocean County), N.J., had it pretty good for a while. He managed … Read More ➡

Illinois State Senator Tom Cullerton Charged in Teamster Ghost Job Scam

Posted on by Carl Horowitz

As the fortunes of Chicago-area former Teamster leader John T. Coli Sr. continue to crumble, an overlapping story has emerged. On August 2, Illinois Democratic State Senator Tom Cullerton was charged in U.S. District Court for the Northern District of Illinois with 40 counts of embezzlement and one count of making a false statement following an indictment by a grand jury. For three years, Cullerton, while working as an organizer for International Brotherhood of Teamsters Local 734, allegedly received nearly $275,000 in salary and benefits from the Chicago union for doing “little or no work.” Teamsters Joint Council 25, then headed by Coli, had approved the job assignment back in 2013. On August 16, Cullerton pleaded not guilty to all charges.

The indictment of Tom Cullerton (in photo) is an outgrowth of charges against John Coli Sr., who for 25 years was the dominant Teamster official in the Chicago area. … Read More ➡

Philadelphia-Area Contractor Sentenced for Theft, Bribery in IBEW Corruption Probe

Posted on by Carl Horowitz

For George Peltz, running a business and ripping off a union often meant the same thing. That’s why he’s no longer involved in either. On May 20, Peltz, a Philadelphia-area contractor, was sentenced in U.S. District Court for the Eastern District of Pennsylvania to 18 months in prison and two years of probation for bribery, theft from a benefit fund, and tax fraud related to his dealings with International Brotherhood of Electrical Workers Local 98. He also paid nearly $1 million in restitution. Peltz had pleaded guilty in January. The actions are part of a larger federal and state joint probe of corruption in Philadelphia that thus far has implicated a city council member, a Pennsylvania Supreme Court justice, a couple of contractors and several Local 98 officials.

Union Corruption Update earlier had analyzed a sweeping federal indictment unsealed on January 30 against eight persons in the overlapping worlds of … Read More ➡