The Gary Jones era at the United Auto Workers was brief. But if Jones wants a brief prison sentence, he’ll be at the mercy of prosecutors. Two days ago, June 3, Jones, UAW president until last November, pleaded guilty in U.S. District Court for the Eastern District of Michigan to embezzlement, racketeering and tax fraud related to his role in the diversion of between $1 million and $1.5 million in union funds toward personal luxuries such as vacations, golf outings and cigars, and their coverup. He is set for sentencing on October 6. Thus far, more than a dozen union and auto industry officials have been convicted following an ongoing probe by the FBI, the IRS and the Labor Department’s Office of Labor-Management Standards and Office of Inspector General. A federal takeover of the 400,000-member UAW remains a possibility.
Union Corruption Update has been following this phase of the probe … Read More ➡
Transport Workers Union Local 208 is now in receivership. There are good reasons for that. For the last half-year, the Columbus, Ohio union has been investigated by the FBI and local police in the wake of an internal audit revealing the loss of nearly $350,000 from its coffers over a half-decade. The likely culprit, an unnamed female who had been secretary-treasurer, has resigned. Local 208 represents about 860 bus drivers and other employees of the Central Ohio Transit Authority (COTA). “There is no place in the TWU for officials who abuse their power and the trust of membership,” said International Union President John Samuelsen last November after news of the thefts broke. As of late May, no criminal charges have been filed.
The identity of the person who apparently ripped off TWU Local 208 has not been made public. But one thing is certain: Nearly $350,000 is gone. Last fall, … Read More ➡
If a government takeover of the United Auto Workers looked like a possibility a few days ago, that possibility just became more real. Yesterday, March 5, Gary Jones (in photo), former president of the United Auto Workers, was charged in an information in Detroit federal court for his role in the embezzlement of well over $1 million in funds from the union, enabling himself and other union leaders to splurge on indulgences unrelated to UAW business. Forced from his post in November, Jones is the biggest catch yet in a union-auto industry probe that so far has netted over a dozen guilty pleas. As this is an information, not an indictment, a plea deal is virtually certain. The actions follow a probe by the FBI, the IRS and the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.
Union Corruption Update has covered this case since it … Read More ➡
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 ➡
If government benefits were available, Nathan Lum made sure that he was going to receive some of them, legally or not. But the only thing that he’s received now is a sentence. On January 29, Lum, former Longshore Division director of International Longshore and Warehouse Union Local 142, was sentenced in U.S. District Court for the District of Hawaii to 30 months in prison for tax fraud and identity theft totaling more than $300,000 over several years. The identity theft involved his cashing of Social Security checks owed to his deceased father. Lum had pleaded guilty last March after an initial indictment in July 2018 and another one that September. He also will have to pay full restitution, plus a $125 special assessment. The actions follow a probe by the FBI, the IRS and the Labor Department’s Office of Labor-Management Standards.
Nathan Y.G. Lum, now 62, a resident of Honolulu, … Read More ➡
The outcome couldn’t have been more inevitable for Vance Pearson. And it couldn’t have been less welcome for the people ranking above him. Last Friday, February 7, Pearson, former regional director for the United Auto Workers and a member of the union’s international board, pleaded guilty in Detroit federal court to conspiracy to embezzle hundreds of thousands of dollars in union funds, enabling him and other UAW officials to live large – or at least larger – for nearly a decade. In so doing, he may have brought prosecutors one step closer to bringing charges against former Auto Workers President Gary Jones and his immediate predecessor, Dennis Williams. The action follows a probe by the FBI, the IRS, and the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.
As Union Corruption Update indicated a couple of weeks ago, Vance Pearson, now 58, a resident of … Read More ➡
James Moylan is about the last person that International Brotherhood of Electrical Workers Local 98 wants to see taking the witness stand. But those fears might be realized. On October 16, Moylan, a longtime friend of John Dougherty, business manager of the powerful Philadelphia union, pleaded guilty in federal court to 17 counts of wire fraud and four counts of filing false income tax returns in connection with his theft of around $49,000 from two nonprofit groups, each in some way supported by the union. He had been charged in January following a joint probe by the FBI, the IRS, the U.S. Labor Department’s Office of Labor-Management Standards, Office of Inspector General, and Employee Benefits Security Administration, plus the Pennsylvania State Police and Attorney General’s Office.
IBEW Local 98, now with about 4,700 members, for years has held a prominent place in the overlapping worlds of Philadelphia labor, real estate … Read More ➡
When it comes to self-dealing, the United Auto Workers’ General Motors Department might rival its Chrysler Department. On September 4, Michael Grimes (in photo), a now-retired senior UAW official, pleaded guilty in U.S. District Court for the Eastern District of Michigan to honest services fraud and money laundering in connection with his receipt of over $1.5 million in illegal payoffs from UAW vendors over a dozen years. Eight days later, on September 12, a prominent union regional official, Vance Pearson, was arrested and charged with fraud, embezzlement and money laundering connected to separate schemes. The actions follow a joint investigation by the FBI, the IRS and the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.
Union Corruption Update described the case of Michael Grimes a few weeks ago. Grimes, now 65 and living in Fort Myers, Fla., had served as a $150,000-a-year administrative assistant to United … Read More ➡
Considering what he stole, Gregory Normand should be feeling a bit lucky. On December 4, Normand, former secretary-treasurer of Local 324 of the International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART), Transportation Division, was sentenced in U.S. District Court for the Western District of Washington to 18 months in prison for embezzling funds from the Marysville, Wash.-based union. He also was ordered to pay $217,260 in restitution. Normand had been indicted in October 2017 for embezzling $443,000, and had pleaded guilty to one count of embezzlement and two counts of making false statements this past July. The actions follow an investigation by the U.S. Labor Department’s Office of Labor-Management Standards.
According to prosecutors, Gregory Normand, now 58, a resident of Marysville (Snohomish County, near Seattle), used his union position, which he had held for six years, to steal funds in a variety of ways. First, he reimbursed … Read More ➡
An organization hires a certified public accountant as its first line of defense against being sued or ripped off. Salvatore Armao and Karen Auer, respectively, the founder-managing partner and a principal officer of the Garden City (Nassau County), L.I.-based accounting firm Armao LLP, apparently forgot their mission. On June 1, the U.S. Justice Department announced that the pair had been charged in Manhattan federal court with aiding and abetting the embezzlement of over $100,000 from a benefit plan of an unspecified union. Each surrendered to authorities that morning. The actions follow an investigation by the U.S. Labor Department’s Office of Inspector General and Employee Benefits Security Administration, with assistance from the FBI and the Justice Department’s Labor-Management Racketeering Unit.
According to federal prosecutors, Salvatore Armao, 64, a resident of Queens, N.Y., and Karen Auer, 47, a resident of Bethpage, N.Y., had the wrong kind of loyalty to a client. From … Read More ➡