benefit fraud Archives - National Legal & Policy Center

Mob-Connected Chicago Union Boss Pleads Guilty to Embezzlement

Posted on March 19, 2019March 22, 2019 by Carl Horowitz

John Matassa Jr.’s biggest mistake was trying to qualify for an early retirement. He now is qualified for incarceration. On February 26, Matassa, 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., now … Read More ➡ “Mob-Connected Chicago Union Boss Pleads Guilty to Embezzlement”

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

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

John Ulrich may have seen the arrangement as a simple 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. 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 48, a … Read More ➡ “Ex-New York Teamster Official Charged with Taking Bribes from Benefit Administrator”

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 ➡ “Ex-UAW President in New Jersey Sentenced for Benefit Fraud”

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

Nearly 30 Indiana Carpenters Sentenced for $500K+ Benefit Fraud

Posted on November 28, 2018November 28, 2018 by Carl Horowitz

The defendants came into the courtroom in large volume, but the judge was more than up to the task. On November 19, fully 27 members of local unions affiliated with the Indiana/Kentucky/Ohio Regional Council of the United Association of Carpenters and Joiners were sentenced in U.S. District Court for the Northern District of Indiana for defrauding the council’s health care program out of a combined $531,422.68. Though court records do not indicate any prison sentences, the defendants, all of them Indiana residents, were ordered to pay restitution. The actions follow a joint investigation by the U.S. Labor Department’s Office of Inspector General and Employee Benefits Security Administration, assisted by Indiana state officials.

According to prosecutors, each of the accused union members had filed fake claims for medical expenses with the Greenwood, Ind.-based council. One of them, Luka Kljajic, who pleaded guilty this July, during 2012-14 had coached various … Read More ➡ “Nearly 30 Indiana Carpenters Sentenced for $500K+ Benefit Fraud”

New York Independent Union Boss Pleads Guilty to $1M+ Ripoff

Posted on September 27, 2018January 29, 2019 by Carl Horowitz

At one time Rocco Fazzolari had bit parts in low-budget New York City crime movies. Little did people know that for a long time he starred in his own real-life version. Yesterday, on September 26, Fazzolari, former president of United Industrial and Service Employees Union Local 122, pleaded guilty in Manhattan federal court to three counts of embezzlement related to his theft of a combined more than $1.3 million in funds from the East Meadow (Long Island), N.Y.-based union and a related benefit plan. Under the terms of the plea agreement, he will forfeit $941,828, pay additional restitution, and refrain from engaging in union-related activity for 13 years. The plea follows a joint investigation by the U.S. Labor Department’s Office of Labor-Management Standards, Office of Inspector General and Employee Benefits Security Administration.

United Industrial and Service Employees Local 122 is a modest-sized independent union. According to tax filings for the … Read More ➡ “New York Independent Union Boss Pleads Guilty to $1M+ Ripoff”

Carpenters Member in Indiana Pleads Guilty to Embezzlement

Posted on August 14, 2018November 28, 2018 by Carl Horowitz

At the Indiana/Kentucky/Ohio Regional Council of Carpenters (IKORCC), theft seems to be a way of doing business. And for Luka Kljajic, business was good until he was caught. On July 25, Kljajic, a member of the Greenwood, Ind.-based council, pleaded guilty in U.S. District Court for the Northern District of Indiana to submitting nearly $50,000 in false claims to a union-sponsored benefit plan and to assisting other union members in submitting false claims to the plan. Sentencing is scheduled for November 19. The plea follows an investigation by the U.S. Labor Department’s Office of Inspector General and Employee Benefits Security Administration (EBSA).

According to prosecutors, Kljajic during 2012-14 submitted fake reimbursement requests for medical plan expenses and helped other union members with similar deceptions. In the case of the latter offenses, he would receive fees ranging from $100 to $500 per claim. In his written plea agreement, he admitted to … Read More ➡ “Carpenters Member in Indiana Pleads Guilty to Embezzlement”

Account Executives in Long Island Plead Guilty to Coverup

Posted on August 9, 2018September 1, 2018 by Carl Horowitz

As a Certified Fraud Examiner, Salvatore Armao knew he was in no position to do anything but plead guilty. That’s why he did just that. Last Thursday, August 2, Armao, founder and managing partner of a Long Island, N.Y.-based accounting firm, Armao LLP, pleaded guilty in U.S. District Court for the Southern District of New York to falsifying financial records filed with the Department of Labor to conceal a scheme by an unnamed labor union president to embezzle more than $100,000 over a number of years from a related benefit plan. Armao and a principal officer of his firm, Karen Auer, had been charged on June 1 with aiding and abetting the thefts. Auer, to no surprise, pleaded guilty on August 3. The actions follow a probe by the FBI, and the Labor Department’s Office of Inspector General and Employee Benefits Security Administration.

According to prosecutors, the unnamed president of … Read More ➡ “Account Executives in Long Island Plead Guilty to Coverup”

Texas Pharmacist Sentenced for Benefit Fraud

Posted on July 9, 2018July 22, 2018 by Carl Horowitz

It takes some real teamwork to fleece the U.S. Department of Labor out of tens of millions of dollars. Nermin Awad El-Hadik, unfortunately, was an integral part of the team. On June 29, Ms. El-Hadik, owner of a Houston pharmacy, was sentenced in U.S. District Court for the Western District of Texas to five years in prison and three years of probation for paying more than $5 million in kickbacks to a Texas-based medical provider in return for referrals who then could be overcharged on prescriptions. She also was ordered to pay restitution. The kickbacks were part of a much larger scam to create fake or exaggerated worker’s compensation claims. El-Hadik had pleaded guilty in November 2016. The action follows a probe by the FBI, Army, Postal Service and Labor Department.

Nermin El-Hadik, now 42, a resident of Bellaire, Tex., was the owner-operator of Hope Pharmacy in Houston. During March-December … Read More ➡ “Texas Pharmacist Sentenced for Benefit Fraud”