benefit fraud Archives - National Legal & Policy Center

Illinois State Senator Tom Cullerton Charged in Teamster Ghost Job Scam

Posted on August 27, 2019September 22, 2019 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 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. Coli … Read More ➡

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

Posted on June 13, 2019July 5, 2019 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 ➡

ILWU, Dockworkers in Oregon Sued for Roles in Time Card Scam

Posted on May 14, 2019May 20, 2019 by Carl Horowitz

There are few workplaces in this country that can match the shipping terminal when it comes to wage and hour fraud – especially if the dockworkers are unionized. Back in December, Columbia Export Terminal in Portland, Oregon filed a lawsuit in U.S. District Court for the District of Oregon against the International Longshore and Warehouse Union and more than 150 of its members, accusing them of participating in a conspiracy to inflate their on-the-clock time in a variety of ways. The schemes allegedly cost the terminal over $5 million. The union, the suit reads, “organized and orchestrated the scheme to submit falsified time sheets.” A court spokesperson told National Legal and Policy Center yesterday afternoon that the case remains active, though a pretrial hearing has yet to be scheduled.

The longshore industry long has been plagued by union-abetted time sheet fraud. About a dozen years ago, Union Corruption Update extensively … Read More ➡

Will Trump Labor Department Follow Through on Preventing Union Corruption?

Posted on March 29, 2019April 1, 2019 by Carl Horowitz

The Department of Labor’s Office of Labor-Management Standards, as NLPC readers well know, has identified and helped prosecute much union corruption over the years. But the agency’s efforts would be even better realized if it finalized a pair of dormant rules promised two years ago. The first would establish a new financial reporting form, T-1, requiring unions with at least some private-sector members to disclose financial data for pension funds and other trusts. The second would impose financial reporting upon intermediate-level unions. Each had been proposed during the first term of the Bush presidency but shelved under President Obama. Contrary to frequent assertions from labor leaders, these regulations would not be burdensome. But they are likely to make unions more responsive to dues-paying members.

The Office of Labor-Management Standards (OLMS) is a creation of the Labor Management Reporting and Disclosure Act, also known as the Landrum-Griffin Act, enacted … Read More ➡

Long Island Accounting Executives Sentenced for Records Fraud

Posted on March 25, 2019April 6, 2019 by Carl Horowitz

Sometimes union corruption cases merge in unexpected ways. That was the case in the sentencings of Salvatore Armao and Karen Auer, respectively, the managing partner and principal officer of a Long Island accounting firm. On February 26, Armao was sentenced in U.S. District Court for the Southern District of New York to two years of supervised release, including six months of home confinement, to making false statements related to aiding and abetting embezzlement by a union president. He also was ordered to pay $9,592 in restitution, $18,700 in asset forfeiture and a $3,000 fine. A little over a week later, on March 8, Auer was sentenced to one year of supervised release and ordered to pay $7,194 in restitution. Each had pleaded guilty last August following a joint probe by the FBI and the U.S. Department of Labor.

Salvatore Armao, founder and managing partner of the Garden City (Long Island), … Read More ➡

Mob-Connected Chicago Union Boss Pleads Guilty to Embezzlement

Posted on March 19, 2019July 30, 2019 by Carl Horowitz

John Matassa Jr.’s biggest mistake was trying to qualify for an early retirement. He now is qualified for prison. On February 26, Matassa, former secretary-treasurer of Independent Union of Amalgamated Workers Local 711, pleaded guilty in U.S. District Court for the Northern District of Illinois to one count of embezzling $738 in union funds, far below what he actually had stolen from the union and the government. He had been indicted in May 2017 on 10 counts related to his creating a no-show union job for his wife and collecting Social Security benefits for himself. Matassa for decades has been a reputed “made man” in the Chicago mob. The plea deal calls for 15 to 21 months in prison, plus $66,500 in restitution. The actions follow a probe by the Social Security Administration and the Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

John “Pudgy” Matassa Jr., … Read More ➡

Ex-New York Teamster Official Charged with Taking Bribes from Benefit Administrator

Posted on March 18, 2019April 1, 2019 by Carl Horowitz

John Ulrich may have seen the arrangement as a business deal, but federal prosecutors see it as a crime. On February 21, Ulrich, formerly vice president of International Brotherhood of Teamsters Local 812, was indicted in Manhattan federal court with soliciting and receiving tens of thousands of dollars in bribes from an unnamed administrator for the health plan of the Great Neck (Long Island), N.Y.-based union in return for retaining that company as a client. Ulrich, who was a plan trustee as well as a union officer, had been arrested earlier that day. He pleaded not guilty, and was released on $100,000 bond. The indictment follows a joint probe by the FBI and the Labor Department’s Office of Labor-Management Standards, Office of Inspector General and Employee Benefits Security Administration.

Teamsters Local 812 represents about 3,000 soft drink and brewery workers in the New York City metropolitan area. John Ulrich, now … Read More ➡

Ex-UAW President in New Jersey Sentenced for Benefit Fraud

Posted on February 1, 2019February 10, 2019 by Carl Horowitz

Considering what Sergio Acosta stole, and enabled his business partner to steal, he is one lucky man. On January 15, Acosta, formerly president of United Auto Workers Local 2326 and trustee of a related health plan, was sentenced in Trenton federal court to three years of supervised release for scamming the plan and keeping a large portion of claims payouts. He also was ordered to pay $32,000 in restitution. Acosta had pleaded guilty last April to a superseding information count of theft, embezzlement and fund conversion. He and a New Jersey businessman, Lawrence Ackerman, had been charged in January 2017 in the scheme, which resulted in a $6.6 million loss to Horizon Blue Cross Blue Shield of New Jersey. Ackerman, who pleaded guilty in December, is set for sentencing on March 20. The actions follow a U.S. Labor Department probe.

As Union Corruption Update has noted (here and here), Sergio … Read More ➡

Independent Union Boss in New York Sentenced for Role in $1M+ Scams

Posted on January 28, 2019January 29, 2019 by Carl Horowitz

For years, Rocco Fazzolari used his union and a related benefit plan as sources of easy money. He’s now about to live the hard life. Fazzolari, formerly president of United Industrial and Service Employees Union Local 122, today was sentenced in Manhattan federal court to 37 months in prison for embezzlement, false record-keeping and receiving kickbacks from the East Meadow (Long Island), N.Y. -based union. Through these schemes, he and an unnamed co-conspirator had enriched themselves by more than $1.3 million. In addition to serving prison time, he will have to forfeit $941,828 in assets and pay restitution of $1,288,810.75. Fazzolari had pleaded guilty in September following a joint probe by the U.S. Labor Department’s Office of Labor-Management Standards, Office of Inspector General, and Employee Benefits Security Administration.

According to prosecutors, Fazzolari, now 58, a resident of Manhasset Hills, Long Island, during 2012-16 embezzled union funds to pay for … Read More ➡