IUOE RICO Local 501 amended #1

Transcription

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Ira Spiro, State Bar No. 67641
[email protected]
H. Scott Leviant, State Bar No. 200834
[email protected]
SPIRO MOORE LLP
11377 W. Olympic Blvd., 5th Floor
Los Angeles, California 90064-1683
Telephone: (310) 235-2468
Facsimile: (310) 235-2456
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Attorneys for Plaintiffs
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UNITED STATES DISTRICT COURT
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CENTRAL DISTRICT OF CALIFORNIA
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FINN PETTE, individually, and on
behalf of all others similarly situated;
JAMES MCLAUGHLIN, individually,
and on behalf of all others similarly
situated;
DANIEL HIMMELBERG,
individually, and on behalf of all
others similarly situated;
GLENN SZALAY, individually, and
on behalf of all others similarly
situated;
JAY BROPHY, individually, and on
ANNE BROPHY, individually, and on
CHERYL CULBREATH,
ROBERT FOX, individually, and on
JOHN CROOKS, individually, and on
NYE NELSON, individually, and on
LINDA PETTE, individually, and on
JUDY MCLAUGHLIN, individually,
and on behalf of all others similarly
situated;
CHRISTINE HIMMELBERG,
Case No.: CV12-09324 DDP (PJWx)
CLASS ACTION
FIRST AMENDED CLASS
ACTION COMPLAINT (FILED AS
A MATTER OF RIGHT) FOR:
1. Violations Of Racketeer Influenced
And Corrupt Organizations Act
[18 U.S.C. § 1962(c)]
[18 U.S.C. § 1962(d)]
[18 U.S.C. § 1962(b)]
[18 U.S.C. § 1962(d)]
5. Violations of Labor Management
Disclosure Act
[29 U.S.C. § 501]
6. Breaches of Fiduciary Duties
[ERISA]
7. Aiding and Abetting
DEMAND FOR JURY TRIAL
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FIRST AMENDED CLASS ACTION COMPLAINT
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ERIK B. SMITH, individually, and on
CHRISTOPHER MENOR,
PATRICK ADAMS, individually, and
on behalf of all others similarly
situated;
Plaintiffs,
vs.
INTERNATIONAL UNION OF
OPERATING ENGINEERS, a trade
union;
JAMES T. CALLAHAN, an
individual;
BRIAN E. HICKEY, an individual;
WILLIAM C. WAGGONER, an
individual;
PATRICK L. SINK, an individual;
JERRY KALMAR, an individual;
RUSSELL E. BURNS, an individual;
RODGER KAMINSKA, an individual;
JAMES M. SWEENEY, an individual;
ROBERT T. HEENAN, an individual;
DANIEL J. MCGRAW, an individual;
DAREN KONOPASKI, an individual;
MICHAEL GALLAGHER, an
individual;
GREG LALEVEE, an individual;
TERRANCE E. MCGOWAN, an
individual;
LOUIS G. RASETTA, an individual;
VINCE GIBLIN, an individual;
JAMES VAN DYKE, an individual;
RICHARD GRIFFIN, an individual;
CHRIS BROWN, an individual;
LEWIS LEVY, an individual;
RANDY HENNINGFIELD, an
individual;
PAUL BENSI, an individual;
SANDRA ACOSTA, an individual:
CORNELL SNEEKES, an individual;
JIM SCRANTON, an individual;
DENNIS LUNDY, an individual;
CYNTHIA ESCANUELAS, an
individual;
ABLE ENGINEERING SERVICES, a
business entity of unknown type;
ABM ENGINEERING SERVICES; a
business entity of unknown type;
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ENRIQUE ALCALA, an individual;
ED CURLY, an individual;
MICHAEL RUSSELL, an individual;
JOHN T. AHERN, an individual;
JOHN M. HOLLIDAY, an individual;
KUBA J. BROWN, an individual;
BRUCE MOFFATT, an individual;
JAMES T. KUNZ, JR. , an individual;
JAMES ZAZZALI, an individual;
MICHAEL R. FANNING, an
individual;
and, DOES 1 through 10, inclusive,
Defendants.
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TABLE OF CONTENTS
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TABLE OF CONTENTS ....................................................................................... i
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I.
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II. JURISDICTION AND VENUE......................................................................1
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III. THE PARTIES TO EACH CAUSE OF ACTION ..........................................2
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A. Plaintiffs ..................................................................................................... 2
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B.
Defendants .................................................................................................. 5
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IV. DEFENDANTS’ MISCONDUCT ................................................................10
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A. About the IUOE........................................................................................ 10
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B.
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INTRODUCTION ..........................................................................................1
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IUOE Forced Plaintiffs Serving As Officers of Local 501 and Others to
Contribute to the President’s Club, a Political Action Fund.................... 11
C. Plaintiffs Discovered Many Examples of Embezzlement and Asset
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Diversion from Local 501 and IUOE Accounts Created for the Benefit
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of Union Members ................................................................................... 11
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1.
but IUOE President Giblin Protected Lundy.................................... 11
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Dennis Lundy Embezzled from the Apprenticeship Trust Account,
2.
Lundy Helped Operate a Sham BOMA and EPA 608 Certification
Testing System ................................................................................. 27
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3.
Lundy Absconded with Re-Election Campaign Funds .................... 29
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4.
Plaintiffs Discovered Evidence That ABM and Able Conspired
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with the IUOE to Divert or Withhold Millions of Dollars from
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Numerous Member Benefits Funds .................................................. 29
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5.
Breasted” and Deprive Local 501 of Members and Revenues ........ 34
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ABM and Able Conspired with IUOE to Operate “Double-
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IUOE Conspired With ABM and Able to Allow Them to
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Circumvent Their Contract With Local 501 and Use Retired
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Employees to Avoid Benefit Fund Obligations ............................... 37
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7.
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Cost Local 501 Roughly 600 Members and Was Used as One
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Pretext for Terminating McLaughlin ............................................... 38
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IUOE and Curly, Acting Under IUOE Orders, Embezzled Monies
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From Local 501 Members Related to the Members’ Efforts to
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Protect Mr. Pette and Mr. Himmelberg ............................................ 39
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9.
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Able and ABM Management Employees Are Improperly
Participating in the General Pension Fund ....................................... 40
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D. IUOE’s Leadership Used Threats of Physical and Economic Violence,
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and Suborned Perjury, to Suppress Investigations and Usurp Control
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Over Local 501 ......................................................................................... 41
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Decertification Election Tampering by Giblin and IUOE at UCLA
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Defendants Diverted Caremark Reimbursements from Local 501’s
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Health & Welfare Fund to IUOE and Imposed Caremark on IUOE
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Despite the Excessive Costs ..................................................................... 49
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F.
Should Have Been Retained by Local 501 for 5 Years ........................... 53
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G. Professionals Under IUOE’s Control Acted at the Direction of IUOE to
Harm Local 501........................................................................................ 54
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H. Consigliore Griffin Created Policies to Protect the Hand-Selected
Leadership Placed in Control of Locals by IUOE ................................... 54
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Defendants and Their Agents Destroyed or Removed Records That
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Giblin and IUOE Selected Zazzali to Fabricate the Appearance of
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Ethical Conduct by IUOE, While Actually Using Zazzali as Another
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Tool for the Oppression of Members Challenging IUOE’s Widespread
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Corruption ................................................................................................ 55
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J.
Able and ABM Are Targeting Local 501 Employees Sympathetic to
the Resistance and This Lawsuit .............................................................. 59
K. Fiduciaries to Local 501 Caused Harm to Local 501 in Order to Further
IUOE’s Plan to Secure Complete Control Over Local 501 ..................... 59
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L.
IUOE and IUOE’s Hand-Picked Operatives Will Not Permit Local 501
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Members to Nominate and Elect Delegates of Their Choosing to
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Attend the IUOE General Convention in April 2013 .............................. 60
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V. CLASS ACTION ALLEGATIONS ..............................................................63
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VI. CLAIMS FOR RELIEF ................................................................................67
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FIRST CLAIM FOR RELIEF ..............................................................................67
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SECOND CLAIM FOR RELIEF .........................................................................73
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THIRD CLAIM FOR RELIEF .............................................................................76
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FOURTH CLAIM FOR RELIEF .........................................................................82
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FIFTH CLAIM FOR RELIEF ..............................................................................84
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SIXTH CLAIM FOR RELIEF .............................................................................86
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SEVENTH CLAIM FOR RELIEF .......................................................................88
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PRAYER FOR RELIEF .......................................................................................89
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1.
INTRODUCTION
This action arises from years of illegal activity by the International
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Union of Operating Engineers and its controlling officers and co-conspirators.
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Local 501, a local trade union, and its members, were victimized by those many
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years of illegal activity. The unlawful abuses suffered by Local 501 and its
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members takes three predominant forms. First, millions upon millions of dollars
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were withheld and/or embezzled from Local 501 and its membership. Second,
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Local 501 was prevented from expanding its membership; the employers violating
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their contracts with Local 501 were protected by Defendants, who were receiving
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kickbacks for their protection. And, third, the membership of Local 501 was
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denied the right to freely select its own officers, through fair and honest elections.
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I.
2.
The conduct of Defendants harkens back to the days of unrepentant
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racketeering by organized crime, which makes some sense here. The International
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Union of Operating Engineers conducts its affairs with the same disregard for
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others’ rights as the mob. Not surprisingly, the International Union of Operating
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Engineers has a long history of ties to organized crime families in New York and
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New Jersey, and they have apparently learned their techniques from the very best of
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those crime syndicates.
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II.
3.
JURISDICTION AND VENUE
The action is brought, among other bases, under the Interstate
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Commerce Clause of the United States Constitution, and the Racketeering, Mail
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Fraud, Wire Fraud and Money Laundering laws of the United States. In addition,
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this action is brought pursuant to Article 1, Section 1 of the Constitution of the
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State of California and other statutes and laws of the State of California.
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4.
Jurisdiction is specifically conferred on this Court by various federal
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statutes including, but not limited to, the following: Section 1964 of the Racketeer
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Influenced and Corrupt Organizations Act of the Organized Crime Control Act of
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1970 as amended, 18 U.S.C. § 1964, based upon a pattern of racketeering activity
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in which Defendants have been engaged in connection with their operation of the
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International Union of Operating Engineers, consisting of violations of (a) 18
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U.S.C. § 1341, relating to mail fraud, (b) 18 U.S.C. § 1343, relating to wire fraud,
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(c) 18 U.S.C. § 1957, relating to monetary transactions of unlawfully obtained
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proceeds from specified crimes, including mail fraud, 18 U.S.C. § 1341, and wire
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fraud, 18 U.S.C. § 1343, (d) 18 U.S.C. § 1951, relating to travel and use of
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interstate commerce in furtherance of certain unlawful activities, including
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unlawful monetary transactions, 18 U.S.C. § 1957.
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5.
Original jurisdiction lies with this Court as to the Federal questions
raised herein, pursuant to 28 U.S.C. § 1331.
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Jurisdiction over any California State causes of action contained in this
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Complaint arises under the doctrine of supplemental jurisdiction, 28 U.S.C. §
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1367(a).
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Venue as to each Defendant is proper in this District pursuant to 18
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U.S.C. § 1965, because each of the Defendants resides, is found, has an agent,
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controls and/or transacts or transacted affairs in this District. In addition, the
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Defendants are engaged in interstate and foreign commerce, and a substantial part
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of the events giving rise to the claims for violations of Federal law occurred in this
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District, all in the course of interstate and foreign commerce.
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III.
THE PARTIES TO EACH CAUSE OF ACTION
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A.
Plaintiffs
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Plaintiff Finn Pette is, and at all relevant time was, a member of Local
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501. Mr. Pette was financial secretary of Local 501. Plaintiff Pette limits his
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claims in this action to those events occurring on or after May 1, 2012.
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9.
Plaintiff James McLaughlin is, and an at all relevant time was, a
member of Local 501. Mr. McLaughlin served as a Business Manager of Local
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501. Mr. McLaughlin was the chairman of Local 501’s Health & Welfare Trust,
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and the Apprenticeship Trusts of Southern California and Southern Nevada. Mr.
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McLaughlin was also the Vice President of the Western Conference of Operating
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Engineers. From April 1998 to June 30, 2009, Mr. McLaughlin served as a Vice-
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President of the IUOE General Executive Board. He was re-elected by the general
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members of the IUOE every 5 ½ years to serve as a Vice-President of the IUOE.
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On June 30, 2009, there were 14 Vice-Presidents that served on the General
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Executive Board. At the time he was forced to resign as Vice-President, he was the
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second most senior Vice-President of the IUOE. Plaintiff McLaughlin limits his
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claims in this action to those events occurring on or after May 1, 2012.
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Plaintiff Daniel Himmelberg is, and at all relevant time was, a member
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of Local 501. Mr. Himmelberg was Chairman of the JAC, a Taft Hartly trust fund
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at local 501, and also served local 501 as its Assistant Business Manager. Plaintiff
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Himmelberg limits his claims in this action to those events occurring on or after
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May 1, 2012.
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11.
Plaintiff Glenn Szalay is, and at all relevant time was, a member of
Local 501.
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Plaintiff Jay Brophy is, and at all relevant time was, a member of
Local 501.
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Plaintiff Anne Brophy is, and at all relevant time was, a member of
Local 501.
14.
Plaintiff Cheryl Culbreath is, and at all relevant time was, a member of
Local 501.
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Plaintiff Robert Fox is, and at all relevant time was, a member of Local
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501. Robert Fox is a former Business Manager of Local 501 and former Vice
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President of the IUOE. Mr. Fox retired as Business Manager of IUOE Local 501
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and IUOE Vice President in 1992.
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Plaintiff John Crooks is, and at all relevant time was, a member of
Local 501 assigned to the Las Vegas division of Local 501.
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Plaintiff Nye Nelson is, and at all relevant time was, a member of
Local 501 and retired from the position of Business Agent in Los Angeles.
18.
Plaintiff Linda Pette is, and at all relevant times, was:
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(a)
the spouse of Local 501 member Finn Pette; and,
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(b)
a beneficiary of member Finn Pette’s pension and healthcare
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benefits, provided by the General Pension and the Health &
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Welfare Fund, respectively.
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19.
Plaintiff Judy McLaughlin is, and at all relevant times, was:
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(a)
the spouse of Local 501 member James McLaughlin; and,
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(b)
a beneficiary of member James McLaughlin’s pension and
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healthcare benefits, provided by the General Pension and the
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Health & Welfare Fund, respectively.
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20.
Plaintiff Christine Himmelberg is, and at all relevant times, was:
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(a)
the spouse of Local 501 member Dan Himmelberg; and,
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(b)
a beneficiary of member Dan Himmelberg’s pension and
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healthcare benefits, provided by the General Pension and the
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Health & Welfare Fund, respectively.
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21.
Plaintiff Erik B. Smith is, and at all relevant time was, a member of
Local 501.
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Plaintiff Christopher Menor is, and at all relevant time was, a member
of Local 501.
23.
Plaintiff Patrick Adams is, and at all relevant time was, a member of
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Local 501. Plaintiff Patrick Adams last served in the position of SuperChief before
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being terminated for cooperating with Local 501 members actively resisting
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IUOE’s efforts to control Local 501 and oppress its members.
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24.
Plaintiffs reserve the right to seek leave to amend this complaint to add
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new plaintiffs, if necessary, in order to establish suitable representative(s) of the
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Class proposed herein and/or any necessary sub-Class.
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B.
Defendants
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Defendant International Union of Operating Engineers is a trade union
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that primarily represents operating engineers, who work as heavy equipment
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operators, mechanics, and surveyors in the construction industry, and stationary
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engineers, who work in operations and maintenance in building and industrial
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complexes, and in the service industries. IUOE also represents nurses and other
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health industry workers, a significant number of public employees engaged in a
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wide variety of occupations, as well as a number of job classifications in the
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petrochemical industry. Local 501 is a stationary local.
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26.
Defendant James T. Callahan is the General President (“GP”) of
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IUOE, allegedly elected in November 2011. Prior to his election by the general
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executive board (little more than an appointment by outgoing GP Giblin as all
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officers of GEB swear allegiance to the GP and to his named successor. There has
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never been a contested “election” in the history of the IUOE for the position of
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General President. Defendant Callahan served as the IUOE General Secretary-
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Treasurer and was elected as IUOE Vice President in 2008. Defendant Callahan is
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also a Trustee of the IUOE General Pension Fund.
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Defendant Brian E. Hickey is General Secretary-Treasurer of IUOE,
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elected in November 2011. Mr. Hickey has served as an IUOE Vice President
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since 2001. Defendant Hickey is also a Trustee of the IUOE Central Pension Fund
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and also Business Manager of Local 399, located in Chicago, Illinois. Local 399 is
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also a stationary local.
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Defendant William C. Waggoner is the First Vice President of IUOE.
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Mr. Waggoner was first elected as an IUOE Vice President in 1980. Mr. Waggoner
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is also the Western States Director and Business Manager of Local 12
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headquartered in Pasadena, California. Local 12 is a hoisting and portables local
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which principally engages in the construction industry.
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Defendant Patrick L. Sink is the Third Vice President of IUOE. Mr.
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Sink was first elected as an IUOE Vice President in 2004. Mr. Sink is Business
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Manager of IUOE Local 18 headquartered in Cleveland, Ohio. Local 18 is a mixed
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local in that it has both a hoisting and portables division and a stationary division
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(18s).
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Defendant Jerry Kalmar is the Fourth Vice President of IUOE. Mr.
Kalmar was first elected as an IUOE Vice President in 2005. Mr. Kalmar is the
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Business Manager of IUOE Local 39. Local 39 is a stationary local headquartered
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in San Francisco, California.
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Defendant Russell E. Burns is the Fifth Vice President of IUOE. Mr.
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Burns was first elected as an IUOE Vice President in October 2006. Mr. Burns is
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the Business Manager for IUOE Local 3 headquartered in Alameda, California.
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Defendant Rodger Kaminska is the Sixth Vice President of IUOE. Mr.
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Kaminska was first elected as an IUOE Vice President in 2008. Mr. Kaminska is
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the Business Manager for IUOE local 101 headquartered in Kansas City, Missouri.
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Defendant James M. Sweeney is the Seventh Vice President of IUOE.
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Mr. Sweeney was first elected as an IUOE Vice President in 2009. Mr. Sweeney is
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Business Manager for IUOE Local 150 headquartered in Countryside, Illinois.
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Defendant Robert T. Heenan is the Eighth Vice President of IUOE.
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Mr. Heenan was first elected as an IUOE Vice President in 2009. Mr. Heenan is the
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Business Manager of IUOE Local 542 headquartered in Fort Washington,
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Pennsylvania.
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35.
Defendant Daniel J. McGraw is the Ninth Vice President of IUOE.
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Mr. McGraw was first elected as an IUOE Vice President in 2011. Mr. McGraw
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also has served as the Northeast Regional Director for the IUOE and is
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headquartered in Albany, New York. He is also the Business Manager for IUOE
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Local 158 headquartered in Albany, New York. IUOE locals in Albany, Rochester,
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Binghamton and Syracuse were merged to form Local 158. The merger was
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completed in January 2012.
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Defendant Daren Konopaski is the Tenth Vice President of IUOE. Mr.
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Konopaski was first elected as an IUOE Vice President in 2011. Mr. Konopaski is
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the Business Manager of IUOE Local 302 headquartered in Bothell, Washington.
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Defendant Michael Gallagher is the Eleventh Vice President of IUOE.
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Mr. Gallagher was first elected as an IUOE Vice President in 2011. Mr. Gallagher
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is the Business Manager of IUOE Local 793 headquartered in Oakville, Ontario,
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Canada.
38.
Defendant Greg Lalevee is the Twelfth Vice President of IUOE. Mr.
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Lalevee was first elected as an IUOE Vice President in 2011. Mr. Lalevee is the
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Business Manager for IUOE Local 825 headquartered in Springfield, New Jersey.
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39.
Defendant Terrance E. McGowan is the Thirteenth Vice President of
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IUOE. Mr. McGowan was first elected as an IUOE Vice President in 2011. Mr.
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McGowan is also a Trustee of the IUOE General Pension Fund. He is the Business
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Manager of IUOE Local 139 headquartered in Pewaukee, Wisconsin.
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40.
Defendant Louis G. Rasetta is the Fourteenth Vice President of IUOE.
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Mr. Rasetta was first elected as an IUOE Vice President in 2012. Mr. Rasetta also
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serves as the Chairman of the Board of the IUOE General Pension Fund. He is
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Business Manager of IUOE Local 4 which is headquartered in Medway,
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Massachusetts.
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41.
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Defendant Vincent (Vince) Giblin was General President of IUOE
from about 2005 until his retirement in November 2011.
42.
Defendant James Van Dyke was the Chief of Staff for IUOE, but he is
now retired.
43.
Defendant Richard Griffin was General Counsel for IUOE and has
since left that position.
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Defendant Chris Brown was the former Business Manager of Local
501. Mr. Brown also served as a Trustee for the Health & Welfare Trust Fund.
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Defendant Louis Levy was an attorney that represented the Board of
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Local 501 and membership of Local 501. Mr. Levy previously worked for IUOE
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three years earlier, performing legal services.
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46.
Defendant Randy Henningfield was a Certified Public Accountant
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hired to audit Trusts for Local 501, including the Apprentice Training Fund.
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Henningfield was married to Cynthia Escanuelas.
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44.
47.
Defendant Paul Bensi is the CEO of Able Engineering Services and a
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Trustee of the Central Pension Fund for the IUOE. Mr. Bensi, at all times relevant,
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served as an employer/management Trustee on the Local 501 JAC board. Mr.
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Bensi served as a Trustee for the Health & Welfare Trust Fund.
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48.
Defendant Sandra Acosta was, at all relevant times, an employee of
IUOE Local 501. Mrs. Acosta served as a business representative.
49.
Defendant Cornell Sneekes was, at relevant times, an employee of
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ABM. Mr. Sneekes served as an employer/management Trustee on the Local 501
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JAC board.
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50.
Defendant Jim Scranton was, at relevant times, the President of ABM
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Engineering Services. Mr. Scranton served as an employer/management Trustee on
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the Local 501 JAC board. Mr. Scranton served as a Trustee for the Health &
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Welfare Trust Fund.
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51.
Defendant Dennis Lundy was, at relevant times, the Director of JAC.
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52.
Defendant Cynthia Escanuelas was, at relevant times, the office
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manager for JAC.
53.
Defendant Able Engineering Services is a business entity wholly
owned by Able Services.
54.
Defendant ABM Engineering Services is a business entity owned by
ABM Industries, Inc.
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Defendant Enrique Alcala is a member of Local 501. He was at one
time an instructor for the JAC.
56.
Defendant Ed Curly is the current Business Manager of Local 501.
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Defendant Ed Curly was appointed by IUOE President Vince Giblin to this
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position. Defendant Ed Curly is currently operating Local 501 under the
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supervision of the current President, James Callahan. Mr. Curly served as a
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Trustee for the Health & Welfare Trust Fund.
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55.
57.
Defendant Mike Russell is a former President of Local 501 and former
Executive Board member.
58.
Defendant John (“Jack”) T. Ahern is the current Business Manager of
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Local 30, located in Richmond Hill, New York. Mr. Ahern served as a General
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Executive Board Member for IUOE and is currently serving on the General
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Executive Board as one of five trustees for IUOE.
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59.
Defendant John M. Holliday is the current Business Manager of Local
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917, located in Chattanooga, Tennessee. Mr. Holliday is currently serving on the
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General Executive Board as one of five trustees for IUOE.
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60.
Defendant Kuba J. Brown is the current Business Manager of Local
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94, located in New York City, New York. Mr. Brown is currently serving on the
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61.
Defendant Bruce Moffatt is the current Business Manager of Local
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955, located in Edmonton, Alberta, Canada. Mr. Moffatt is currently serving on the
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62.
Defendant James T. Kunz, Jr. is the current Business Manager of Local
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66, located in Pittsburgh, Pennsylvania. Mr. Kunz is currently serving on the
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63.
Defendant James Zazzali is a retired New Jersey Supreme Court
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Justice. Mr. Zazzali is currently associated with the law firm Zazzali, Fagella,
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Nowak, Kleinbaum, and Friedman, located in Newark, New Jersey. He was
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appointed by former IOUE General President to the position of Ethics Officer in
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2007. His hiring was ratified at the General Convention in 2008.
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Michael R. Fanning is the Chief Executive Officer for the General and
Central Pension Funds.
65.
Plaintiffs do not know the true names or capacities of the persons or
6
entities sued herein as DOES 1-10, inclusive, and therefore sue said Defendants by
7
such fictitious names. Each of the DOE Defendants was in some manner legally
8
responsible for the violations alleged herein. Plaintiffs will amend this complaint
9
to set forth the true names and capacities of these Defendants when they have been
10
11
Spiro Moore llp
64.
ascertained, together with appropriate charging allegations, as may be necessary.
66.
At all times mentioned herein, the Defendants named as DOES 1-10,
12
inclusive, and each of them, were residents of, doing business in, availed
13
themselves of the jurisdiction of, and/or injured Plaintiffs and aggrieved employees
14
in the State of California, among other locations.
15
67.
At all times mentioned herein, each Defendant was the agent, servant,
16
or employee of the other Defendants and in acting and omitting to act as alleged
17
herein did so within the course and scope of that agency or employment.
18
68.
The term “Defendants” as used herein includes DOES 1-10.
19
20
IV.
DEFENDANTS’ MISCONDUCT
21
A.
About the IUOE
22
69.
The International Union of Operating Engineers (IUOE) is a trade
23
union that primarily represents operating engineers, who work as heavy equipment
24
operators, mechanics, and surveyors in the construction industry, and stationary
25
engineers, who work in operations and maintenance in building and industrial
26
complexes, and in the service industries. IUOE also represents nurses and other
27
health industry workers, a significant number of public employees engaged in a
28
Page 10
1
wide variety of occupations, as well as a number of job classifications in the
2
petrochemical industry.
3
70.
Founded in 1896, IUOE today has approximately 400,000 members in
4
123 local unions throughout the United States and Canada. IUOE is the 10th largest
5
union in the AFL-CIO.
6
7
B.
8
Others to Contribute to the President’s Club, a Political Action
9
Fund
10
Spiro Moore llp
IUOE Forced Plaintiffs Serving As Officers of Local 501 and
71.
Vince Giblin, as General President of IUOE, dramatically increased
11
contributions to IUOE’s Political Action Fund, the President’s Club, previously
12
known as EPEC. However, he did so by engaging in illegal conduct. Giblin
13
required any officer, organizer, instructor, coordinator, business agent or district
14
representative of a local union or its affiliate operation, such as a training trust to
15
contribute to the President’s Club. Officers were told that if they wanted to serve
16
as an officer, organizer, instructor, coordinator, business agent or district
17
representative, they had no choice but to contribute to the President’s Club, in
18
amounts ranging from hundreds to thousands of dollars a year. On information and
19
belief, the obligation to contribute extended beyond the local level to IUOE
20
employees and affiliates of IUOE.
21
22
C.
Plaintiffs Discovered Many Examples of Embezzlement and Asset
23
Diversion from Local 501 and IUOE Accounts Created for the
24
Benefit of Union Members
25
1.
26
Account, but IUOE President Giblin Protected Lundy
27
28
Dennis Lundy Embezzled from the Apprenticeship Trust
72.
In 2007, Dennis Lundy was in charge of the Local 501 Apprenticeship
Trust.
Page 11
1
In his position as Trustee of the Local 501 Apprenticeship Fund,
2
Lundy forged Mr. McLaughlin's signature on checks from that fund. Mr. Lundy
3
also charged many thousands of dollars in lunches to the fund, though the lunches
4
were not for any Fund business purposes. Instead, Mr. Lundy was having an affair
5
with Cynthia Escanuelas, an employee of Local 501. Mr. Lundy also charged
6
substantial amounts of liquor or other alcoholic beverages and even pornographic
7
video to the Fund. The pornographic video was charged to a hotel room charge
8
during Lundy's visit to New York City. The room was rented in the name of John
9
T. Ahern, Business Manager of IUOE, Local 30 and an International Trustee.
10
11
Spiro Moore llp
73.
Local 501 Bylaws prohibit alcohol charges.
74.
Mr. Giblin created Regional Director positions and promoted Mr.
12
Lundy to the position of Western Regional Director. Mr. Lundy is a personal friend
13
of Defendant Giblin from their time together in New Jersey. Following Mr.
14
Giblin's appointment of Dennis Lundy to the position of Western Regional
15
Director, Mr. Lundy hired Cynthia Escanuelas, his mistress as his new assistant.
16
Thus, she became an employee of the International.
17
75.
In fact, Lundy is so fully protected by Giblin, that he, Giblin, and,
18
later, Van Dyke, are the only individuals allowed to work full time for the IUOE
19
and draw their full pensions from the General Pension Fund simultaneously along
20
with their work as union members While this arrangement is a violation of the
21
General Pension Fund rules, as applied by previous General Presidents and General
22
Executive Board members, Giblin exerted such control over IUOE and its Trustees
23
and General Executive Board other officers that it was allowed without challenge.
24
The Fund's rules were never changed to prevent this double-dipping.
25
76.
After Mr. Lundy started his new job, Mr. McLaughlin reviewed the
26
Apprenticeship Trust financial records and found a number of improper, personal
27
charges related to food, beverage, and travel purchases. Mr. McLaughlin
28
immediate1y began an investigation and brought in Finn Pette, a Business
Page 12
1
Representative and elected officer of Local 501, and Daniel Himmelberg, the
2
Assistant Business Manager, to assist in the investigation.
3
Mssrs. Himmelberg and Pette investigated the embezzlement charges.
4
They hired an accounting firm and retained a separate lawyer, who was not
5
affiliated with Local 501. They also notified the Department of Labor and filed
6
revised reports for the trust account. Mssrs. Himmelberg and Pette received a report
7
from the accounting firm and sent Mr. Lundy a demand for repayment of roughly
8
$4,000.00. The auditors could not examine charges prior to December 2006,
9
though they noted that the card existed since July 2003. Amazingly, Business
10
Manager Jim McLaughlin had no idea that Lundy had obtained a Visa for the JAC
11
Trust.
12
Spiro Moore llp
77.
78.
An outside auditor concluded that of $56,670.51 charged to the
13
Apprenticeship Trust Fund by Lundy from January 2007 to July 2007, $13,087.19
14
constituted meals and entertainment, $13,223.70 constituted travel and lodging, and
15
$16,810.45 constituted books and equipment. Many of Lundy's charges were for
16
nothing more than expensive lunches with his mistress, Cynthia Escanuelas. Over
17
20% of the charges to the fund had no supporting receipt. The unsupported charges
18
amounted to $19,401.23. At least $4,970.19 of Lundy's meal charges appeared to
19
have no business purpose.
20
79.
The outside auditor also examined charges to Amex and Visa cards
21
issued for the Trust, for the billing period of January 2006 to December 2006.
22
During that time, of $84,352.58 charged, $20,634.05 constituted meals and
23
entertainment, $24,397.52 constituted travel and lodging, and $30,380.11
24
constituted books and equipment. Over 20% of the charges had no receipts. 62
25
meal transactions, totalling $7,944.78, were undocumented. Total unsupported
26
charges amounted to $28,981.54. It is believed that some of the unsupported
27
charges were false submissions used to embezzle funds for a cosmetic breast
28
Page 13
1
augmentation procedure Lundy obtained for Cynthia Escanuelas. The auditor’s
2
findings are attached hereto as Exhibit 1.
Spiro Moore llp
3
80.
At the last International Convention, several officers of Local 501
4
approached Richard Griffin, who was, at that time, the general counsel for IUOE,
5
and provided him with a package containing audit data that they had collected at
6
that time. Attorney Griffin was advised that Lundy had engaged in crimes
7
involving embezzlement of Trust account funds and Local 501 member monies.
8
The 501 officers asked for help from Attorney Griffin. Attorney Griffin took the
9
package and promised to "get back to them" soon. Instead of providing assistance,
10
Attorney Griffin did nothing other than deliver information to Giblin and IUOE, as
11
evidenced by Giblin's sudden involvement to suppress the investigation. Attorney
12
Griffin failed to report crimes occurring in Local 501 to the appropriate authorities.
13
Attorney Griffin's silence and complicity was so egregious that he failed to even
14
attempt to prevent Vincent Giblin and the International from committing further
15
crimes or fraud against the officers of local 501 and the 501 membership. The
16
result of Attorney Griffin's actions or inaction was reasonably certain to result in
17
substantial injury to the financial interests or property of another individual,
18
members, or to an IUOE affiliate organization.
19
81.
Mr. Lundy's friend, Sandra Acosta, called Mr. McLaughlin and told
20
him Mr. Lundy wasn't going to pay the money back to the trust and that Mr.
21
McLaughlin had "better back off" on insisting Mr. Lundy pay the money back to
22
the trust because Mr. Lundy had "friends." Mrs. Acosta was undoubtedly informed
23
and sincere in her warning, given that she vacationed annually with William
24
Waggoner and his wife, Patty Waggoner. Mr. McLaughlin received an angry call
25
from the then IUOE General President Vince Giblin around the early part of 2008.
26
Mr. Giblin demanded Mr. McLaughlin "drop" the investigation. Mr. Giblin told
27
Mr. McLaughlin that he "owed" Mr. Giblin because Mr. Giblin knew Mr. Lundy
28
Page 14
1
was going to run for Business Manager and told Mr. McLaughlin that he had
2
"[taken] Dennis off [his/McLaughlin's] hands."
Spiro Moore llp
3
82.
Mr. McLaughlin told Mr. Giblin that he couldn't stop the investigation.
4
From early 2008, until June 2009, Mr. Giblin harassed and threatened Mssrs.
5
McLaughlin, Himmelberg, and Pette. Mr. McLaughlin was the 2nd Vice-President
6
of the IUOE Executive Board and was a trustee on the Central Pension Trust. Mr.
7
Giblin displayed contempt for Mr. McLaughlin at Board and Pension Trust
8
meetings, and when Mr. Giblin found out that Mssrs. Himmelberg and Pette had
9
accompanied Mr. McLaughlin to an IUOE meeting in Chicago, Mr. Giblin told Mr.
10
McLaughlin if he saw either Mr. Himmelberg or Mr. Pette he would fire them "on
11
the spot," notwithstanding that, at all times relevant, Himmelberg and Pette were
12
employees and elected officers of Local 501. Mr. Giblin also told Mr. McLaughlin
13
that he was going to "punch their ticket," referring to Mssrs. McLaughlin,
14
Himmelberg, and Pette.
15
83.
In an unprecedented move and based solely upon the receipt of
16
anonymous letters, Mr. Giblin directed the IUOE ethics officer former New Jersey
17
Supreme Court Judge James R. Zazzali to investigate Mr. McLaughlin. It is now
18
known, Michael Russell, a local 501 employee based in Las Vegas, and personal
19
friend of Dennis Lundy wrote the anonymous letters at the request and
20
encouragement of Dennis Lundy. Mr. Russell’s testimony setting forth this
21
admission is attached hereto as Exhibit 2. However, no charges were brought
22
against Mr. McLaughlin because Mr. McLaughlin provided documents and
23
responses that supported Mr. McLaughlin’s position that he had done nothing
24
wrong. To the knowledge of all class representatives in this action, ethics officer
25
Zazzali failed to finalize a report detailing his findings in connection with local
26
501. After ethics officer Zazzali agreed to consider and begin an investigation
27
based upon Mike Russell’s anonymous letters to him regarding local 501, a flood of
28
anonymous letters regarding local 501 began to flow in to the ethics officer. .
Page 15
1
Rather than investigating the merits of these other anonymous letters as he did with
2
respect to Mr. McLaughlin, and realizing he had created a serious problem, ethics
3
officer Zazzali caused an article to be published in the IUOE publication
4
concerning anonymous letters. A copy of that article is attached hereto as Exhibit
5
3.
Spiro Moore llp
6
84.
On or about June 9, 2009 Robert Fox, the previous Business Manager
7
of Local 501 and former International Vice President received a call from
8
Defendant Vincent Giblin, IUOE General President. Mr. Giblin was extremely
9
upset with James McLaughlin, the Business Manager of Local 501 at that time.
10
Mr. Giblin said to Mr. Fox, "I told that fat fuck [James McLaughlin] to make that
11
Lundy thing disappear and he never did. That lazy fat fuck has to go!" Mr. Fox
12
was a trusted confident of Mr. McLaughlin and knew about the Lundy reference,
13
having already heard from Mr. McLaughlin that Mr. Lundy had embezzled funds
14
from the Apprenticeship Trust at Local 501.
15
85.
On or about the morning of June 11, 2009, Mr. Giblin called Mr.
16
McLaughlin and ordered Mr. McLaughlin to resign as Business Manager and Vice-
17
President of the Executive Board. Mr. Giblin also removed Mr. McLaughlin as a
18
Trustee of the IUOE Central Pension Trust. Initially, Mr. McLaughlin refused to
19
submit his resignation, stating that he had done nothing wrong. Mr. Giblin
20
threatened to separate the Las Vegas membership from Local 501 if Mr.
21
McLaughlin didn't resign. Mr. Giblin told Mr. McLaughlin that if he didn't resign,
22
he would be "the Business Manager of nothing!" Mr. Giblin ended the conversation
23
by telling Mr. McLaughlin that he had to direct all communications to the IUOE's
24
general counsel at that time, Richard Griffin. Mr. Giblin then abruptly hung up the
25
phone.
26
86.
Local 501 originated the Central Pension Fund. Local 501 deposits
27
started that fund. Because of this, Local 501 does not have its own local pension
28
like many other Locals do. When Giblin forced out Mr. McLaughlin, a sitting VP
Page 16
1
of the IUOE, the Business Manager of Local 501, and a Trustee of the Central
2
Pension Fund, this left Local 501 with no elected official capable of attempting to
3
protect Local 501 memberships' interest in the Central Pension Fund, which is
4
Local 501's only pension fund.
5
James McLaughlin faced multiple obnoxious and often threatening
6
telephone calls weekly from Vincent Giblin. It was clear to McLaughlin and the
7
other union officers that the tone and posture of Vincent Giblin was increasing in
8
intensity. Although McLaughlin received the calls directly, Giblin’s screaming
9
into the phone at McLaughlin was heard by other officers and employees’ alike
10
working in the Local 501 office. These threatening calls continued from 2007 until
11
the day McLaughlin resigned.
12
Spiro Moore llp
87.
88.
In an effort to quiet Vincent Giblin, James McLaughlin reached out to
13
Attorney Michael R. Fanning, the Chief Executive Officer for the General and
14
Central Pension Funds, over the issue of Jackie Foley, a retired local 501 employee.
15
Prior to reaching out to Attorney Fanning, McLaughlin had received numerous
16
calls from Vincent Giblin accusing him of having allowed Jackie Foley to work in
17
excess of 35 hours in any given month. Although McLaughlin had advised Vincent
18
Giblin that this never happened, as did Jackie Foley, Vincent Giblin was relentless
19
in his pursuit of the false Foley allegations with James McLaughlin as a pretext for
20
finding a reason to force the resignation of McLaughlin. At all times relevant,
21
James McLaughlin, a trustee on the Pension Trust Board, understood and abided by
22
the rules governing the employment of retirees, including Jackie Foley.
23
89.
Contrary to both James McLaughlin’s and Jackie Foley’s statements to
24
Attorney Fanning, Attorney Fanning took the position and advised McLaughlin to
25
“admit” he had permitted Foley to work in excess of 35 hours in a month.
26
McLaughlin protested that this was not true, but Attorney Fanning stated to
27
McLaughlin that Vincent Giblin was not going to drop this issue or leave
28
McLaughlin alone until the Fund could put this issue to rest. Attorney Fanning
Page 17
Spiro Moore llp
1
advised McLaughlin that Giblin would drop the issue and everything could go back
2
to normal if he admitted the false allegation that Foley worked in excess of 35
3
hours. McLaughlin finally agreed to allow Attorney Fanning to take an admission
4
back to Vincent Giblin concerning the false Foley allegation, while continuing to
5
protest that it was untrue. Attorney Fanning, an officer of the Court, not only
6
advised a trustee of the Fund to lie, but indicated that unless McLaughlin did lie as
7
directed, Vincent Giblin would continue to target local 501 and McLaughlin with
8
continuing harassing calls, threatening calls, and action adverse to local 501, its
9
officers, and its membership. Shortly thereafter, while in route to Washington to
10
attend a meeting of the trustees, McLaughlin received a telephone call from
11
Vincent Giblin demanding his immediate resignation from his position as Fund
12
trustee.
13
90.
Mr. McLaughlin called a meeting with Mr. Pette and Mr. Himmelberg
14
in his office. They decided to contact Local 501's attorney to find out what could be
15
done. Mr. McLaughlin called attorney Adam Stern and attorney Stern agreed to
16
come to the Local 501 office later that morning. At about the same time, Mr. Fox
17
came into Mr. McLaughlin's office. Mr. Fox told Mssrs. McLaughlin, Himmelberg,
18
and Pette about the conversation he had with Mr. Giblin the prior evening and Mr.
19
McLaughlin told Mr. Fox about the conversation that he had with Mr. Giblin earlier
20
that morning, including Mr. Giblin's death threats directed at Mssrs. McLaughlin,
21
Himmelberg, and Pette. Mr. Fox agreed to stay and tell attorney Stern about his
22
conversation with Mr. Giblin.
23
91.
Mr. Stern arrived on or about the morning of June 11, 2009 with one of
24
his law partners, attorney Lewis Levy. Mr. Fox told Mssrs. Stern and Levy about
25
his previous phone conversation with Mr. Giblin and Mssrs. McLaughlin,
26
Himmelberg, and Pette reminded attorneys Stern and Levy about the Lundy matter
27
and Mr. Giblin's retaliatory acts. Mr. McLaughlin then asked Mr. Stern to call the
28
IUOE and speak to the general counsel to the IUOE, Attorney Griffin, to "get the
Page 18
1
IUOE off my back." Mr. Stern told everyone present that the IUOE had no basis to
2
place Local 501 into trusteeship and specifically called Mr. Giblin's actions
3
"bullshit." Mr. Levy then told Mr. McLaughlin that Mr. Stern was "too emotional"
4
and that he would speak to Attorney Griffin. But Levy, Stern & Ford did not
5
disclose the substantial and unwaivable conflict of interest they faced when asked
6
by Mr. McLaughlin to call the IUOE and speak to Attorney Griffin to get the IUOE
7
off his back:
8
(a)
almost 15 years. Between 2007 through June 2009, Mr.
9
Spiro Moore llp
The firm of Levy, Stern & Ford has represented Local 501 for
10
McLaughlin and others kept Levy, Stern & Ford and Adam
11
Stern updated on Mr. Giblin’s actions against Mssrs.
12
McLaughlin, Himmelberg, and Pette.
13
(b)
Sandra Acosta, a Business Agent and employee of Local 501,
14
filed a sexual harassment lawsuit ("Acosta Action") against
15
Local 501 and Mssrs. McLaughlin and Pette in early 2009. The
16
Acosta Action was active in June 2009 and Levy, Stern & Ford,
17
specifically, Adam Stern and Lewis Levy, represented Local 501
18
in the Acosta Action and represented Mssrs. McLaughlin and
19
Pette, as individuals, in the lawsuit. (Levy, Stern & Ford did
20
obtain conflict waivers from Mssrs. McLaughlin and Pette in
21
order to represent them in the Acosta Action.)
22
(c)
Levy, Stern & Ford also personally represented Mr. McLaughlin
23
in a separate matter. Mr. Levy individually and Levy, Stern &
24
Ford, represented Mr. McLaughlin in a workers’ compensation
25
matter related to an injury Mr. McLaughlin suffered while
26
working at Local 501.
27
28
(d)
In or around late 2009, plaintiff’s counsel in the Acosta Action
served a deposition subpoena on Mr. Giblin. Mr. Giblin told Mr.
Page 19
Spiro Moore llp
1
Levy that he didn't want his deposition taken and to “make the
2
Acosta thing go away.” Shortly thereafter, Mr. Levy negotiated
3
a settlement with Ms. Acosta and the case was dismissed, with a
4
settlement paid by local 501 believed to be in excess of
5
$239,000. At all times relevant, information on the settlement
6
was withheld from the membership of local 501. Although the
7
local 501 insurance carrier paid this settlement, the settlement
8
resulted in a change of status for purposes of insurance ratings,
9
and costs associated with insurance coverage. The initial
10
ramification of this settlement was an increase in the deductible
11
associated with the coverage. Later, this settlement played a role
12
in local 501 being dropped by the carrier forcing local 501 to
13
seek new, higher cost, insurance due to the loss rating. Levy,
14
Stern & Ford refused to release this information to the local 501
15
membership. Information about the amount of the settlement
16
appears on the 2010 LM-2 filing by Local 501 with the U.S.
17
Department of Labor:
18
SCHEDULE 14 OTHER RECEIPTS 2010 IUOE 501 LM 2
FILE NUMBER: 012 442
19
20
21
Name and Address
(A)
22
ZURICH INSURANCE
66944
23
24
25
26
CHICAGO
IL
60666
Type or Classification
(B)
INSURANCE PROVIDER
Purpose
(C)
Total Itemized Transactions
Date
(D)
Amount
(E)
$230,450
Total Non-Itemized Transactions
$0
Total of All Transactions
$230,450
LAWSUIT SETTLEMENT
02/18/2010
27
28
Page 20
$230,450
(e)
1
2
vested financial interest in the outcome of the Acosta litigation.
3
The membership of local 501 were the only parties of interest
4
and they were deprived of actual knowledge to prevent future
5
losses to local 501 by the International, Vincent Giblin and
6
Levy, Stern & Ford, working in concert each with the other.
(f)
7
Spiro Moore llp
At all times relevant, the International and Vince Giblin had no
By virtue of the representation provided above Levy, Stern &
8
Ford received substantial financial benefits from both Local 501
9
and the International IUOE. Mr. McLaughlin and Local 501
10
paid Levy, Stern & Ford a monthly retainer of$12,500.00 per
11
month to represent Local 501. Additionally, Attorney Griffin of
12
the IUOE and William Waggoner, First Vice-President of the
13
IUOE and Business Manager of IUOE Local 12 in Pasadena,
14
California retained the service of Levy, Stern & Ford. Despite
15
the conflict faced by Levy, Stern & Ford, the firm did not
16
disclose the substantial and unwaivable conflict of interest when
17
Attorney Levy agreed to call the IUOE and speak to Attorney
18
Griffin to “get the IUOE off Mr. McLaughlin’s back.”
19
92.
Mssrs. Levy and Stern left Mr. McLaughlin's office and went to a
20
private room in the offices of Local 501 to call Attorney Griffin. Mssrs. Levy and
21
Stern returned and Mr. Levy stated to everyone that Attorney Griffin said Mr.
22
Giblin was demanding Mr. McLaughlin resign. Attorney Stern insisted that they
23
fight Mr. Giblin and the IUOE. Mssrs. McLaughlin, Himmelberg, Pette, and Fox
24
agreed with Attorney Stern.
25
93.
However, Attorney Levy told Mr. McLaughlin that he must negotiate a
26
resignation with the IUOE because Attorney Griffin told him Mr. Giblin was
27
threatening to either separate Las Vegas from the Local or place Local 501 under
28
Page 21
1
trusteeship. Attorney Levy told Mr. McLaughlin that Mr. Giblin was prepared to
2
take action immediately.
3
Mr. McLaughlin told Attorney Levy he didn't want to resign as
4
Business Manager of Local 501 but he also did not want Local 501 to be broken
5
apart or placed under trusteeship. Attorney Levy told him his only option was to
6
resign. At this point, Mr. Pette left the meeting to attend another meeting where he
7
was leading the negotiations on a new union contract for Local 501 members.
8
9
Spiro Moore llp
94.
95.
After Mr. Pette left, Mr. McLaughlin asked Attorney Stern and
Attorney Levy for their advice. Mr. Levy told Mr. McLaughlin that he had to
10
negotiate with Attorney Griffin that he should propose his own terms. Mr.
11
McLaughlin told Attorney Levy that he would agree to resign; however, he wanted
12
his pensions from his position as Business Manager as well as 2nd Vice-President
13
of the IUOE. Additionally, Mr. McLaughlin wanted his medical benefits. Attorney
14
Levy agreed to pass that on to Attorney Griffin. Mssrs. Levy and Stern left the
15
room to call Attorney Griffin.
16
96.
Mssrs. Levy and Stern returned to Mr. McLaughlin's office about 20
17
minutes later. Attorney Levy stated that as part of the deal to "leave Local 501
18
alone," Mr. McLaughlin not only had to resign, but before he resigned, Mr.
19
McLaughlin also had to fire Finn Pette as Business Representative. Mr. Pette was
20
the originator of various audits into employer contribution shortfalls concerning
21
both the JAC Fund, and the local 501 Health & Welfare Fund. Mr. Pette was also
22
investigating massive double-breasting issues involving defendants Able and ABM.
23
97.
Mr. McLaughlin told Attorney Levy that Mr. Pette was "not part of the
24
deal." Mr. McLaughlin had been grooming Mr. Pette to potentially succeed him as
25
Business Manager when Mr. McLaughlin retired. Mr. McLaughlin was a mentor to
26
Mr. Pette and assigned Mr. Pette to high profile negotiations. Mr. McLaughlin
27
took Mr. Pette to IUOE working meetings throughout the country. Upon being
28
forced to resign, it was Mr. McLaughlin's goal to have Mr. Pette succeed him as
Page 22
1
Business Manager and to keep Mr. Himmelberg as Assistant Business Manager to
2
assist Mr. Pette in performing his job duties.
3
Mr. McLaughlin told Attorney Levy that he would not fire Mr. Pette.
4
Mssrs. Levy and Stern left the room to call Attorney Griffin. In the meantime, Mr.
5
McLaughlin tried to call Mr. Pette but did not reach him.
6
99.
Mssrs. Levy and Stern returned to Mr. McLaughlin's office a few
7
moments later. Attorney Levy told Mr. McLaughlin that if Mr. McLaughlin didn't
8
agree to fire Mr. Pette, or get Mr. Pette to resign, that "Dan is next." Mssrs. Fox,
9
McLaughlin, and Himmelberg understood this to mean that Attorney Griffin and
10
the IUOE would demand that Mr. Himmelberg's employment be terminated if Mr.
11
McLaughlin didn't fire Mr. Pette.
12
Spiro Moore llp
98.
100.
Attorney Levy asked Mr. McLaughlin why Mr. Giblin wanted Mr.
13
Pette removed as Business Representative. Mr. McLaughlin reminded Attorney
14
Levy and Attorney Stern that Mr. Giblin had a vendetta against Mr. Pette and Mr.
15
Himmelberg because they were both involved in the investigation of Dennis Lundy,
16
who was under Giblin's protection, and audits of the various Local 501 Funds. Mr.
17
McLaughlin asked attorneys Stern and Levy if the IUOE's acts were a violation of
18
Taft-Hartly or the LMRDA. Attorney Levy merely responded that Mr. McLaughlin
19
"shouldn't pick a fight with [Mr.] Giblin or the International."
20
101.
Mr. McLaughlin told Mr. Levy that he couldn't risk Mr. Himmelberg's
21
job because Mr. Himmelberg had Parkinson's disease and Mr. Himmelberg
22
wouldn't be able to get a job as an engineer. Mr. McLaughlin told Attorney Levy
23
that Mr. Giblin knew Mr. Himmelberg had Parkinson's disease because Mr.
24
McLaughlin told Attorney Giblin at an IUOE meeting when Attorney Griffin asked
25
why Mr. Himmelberg's hand was shaking. Attorney Levy then suggested Mr.
26
McLaughlin make a counterproposal. Mr. McLaughlin decided to propose that Mr.
27
Pette would resign in late spring of 2010. Mr. McLaughlin proposed this date
28
because this would give Mr. Pette time to finish some major negotiations which
Page 23
1
would be publicized. Mr. Pette could then use this positive publicity to increase his
2
chances of winning the Business Manager position in the elections the following
3
year.
Spiro Moore llp
4
102.
Although Mr. Pette was not present, Mr. McLaughlin told Attorney
5
Levy that he would agree to convince Mr. Pette to resign in the late spring of 2010.
6
Attorney Levy told Mr. McLaughlin that this appeared "fair" and he would speak to
7
Attorney Griffin. Mssrs. Levy and Stern left the room and returned shortly. Upon
8
returning to the room, Attorney Levy told Mr. McLaughlin that Mr. Giblin was
9
demanding that if Mr. Pette was going to resign, he had to resign by October 31,
10
2009. Mr. Levy told Mr. McLaughlin that he had to make a decision at that moment
11
and to not bother with a counter-offer because Attorney Griffin told him that Mr.
12
McLaughlin had to "take it or leave it" and if Mr. McLaughlin didn't "take it,"
13
Attorney Griffin would next demand Mr. Himmelberg's resignation or termination.
14
103.
Mr. Levy told Mr. McLaughlin that this was a "good deal," and that
15
Mr. McLaughlin should accept Attorney Griffin's demand. Mr. McLaughlin relied
16
on the advice and counsel of Mr. Levy and agreed to the term. Mr. Levy then
17
notified Attorney Griffin that the term requiring Mr. Pette's resignation by October
18
31, 2009 was "accepted." Mr. Levy left to call Attorney Griffin and then returned
19
about 30 minutes later. Mr. Levy told Mr. McLaughlin that he had to propose a
20
person to replace him as Business Manager. Mr. Levy told Mr. McLaughlin that
21
Mr. McLaughlin couldn't propose "that guy with the hat [Mr. Pette] or
22
Himmelberg, or that broad [Sandra Acosta]." Mr. McLaughlin told Mr. Levy that
23
he wanted to Mr. Pette to take over as Business Manager. Mr. Levy responded that
24
it was not a good idea to propose Mr. Pette's name. Mr. McLaughlin then proposed
25
Ronald Frease. Mr. Levy left to call Attorney Griffin and returned a few moments
26
later and said that Mr. Frease was "unacceptable" to the IUOE. Mr. McLaughlin
27
then proposed Edward Curly. Attorney Griffin told Mr. Levy that Mr. Curly was
28
Page 24
1
also "unacceptable" to the IUOE. Finally, the IUOE agreed to allow Chris Brown to
2
replace Mr. McLaughlin as Business Manager of Local 501.
3
Mr. Pette returned to the Local 501 office about 3 hours later. Upon
4
Mr. Pette's return, Mr. Levy and Mr. McLaughlin told Mr. Pette that he would have
5
to resign his position as Business Representative and Financial Secretary. Mr.
6
McLaughlin told Mr. Pette that did not want to fire Mr. Pette nor did he want Mr.
7
Pette to resign. Mr. McLaughlin told Mr. Pette that he didn't have a choice because
8
Mr. Levy told him that he didn't have a choice. Mr. Pette asked if he had say in the
9
decision. Mr. Levy then told Mr. Pette "What they said was, we better accept these
10
11
Spiro Moore llp
104.
terms because they could have taken Himmelberg out too."
105.
Mr. Pette asked Mr. Levy "What does that mean?" Mr. Levy replied,
12
"Either you're fired, or everyone is fired. Take it or leave it." Mr. Pette asked Mr.
13
Levy "Do you want me to sign something?" Mr. Levy replied "That won't be
14
necessary." Mr. Pette immediately told Mr. Levy, "Like hell it won't! I want this in
15
writing!" Mr. Levy told Mr. Pette, "Okay, Finn, I'll take care of it."
16
106.
Mr. Pette then asked "so I have to resign when Jim does?" To which
17
Mr. Levy responded "I got you a reprieve until October 31st." The meeting then
18
ended and Mr. Levy prepared a letter with the terms of the June 11, 2009
19
negotiations and distributed it to Mssrs. Griffin, McLaughlin, Himmelberg, and
20
Pette. Attorney Levy’s contemporaneous notes of the meeting are attached hereto
21
as Exhibit 4.
22
107.
Notwithstanding the above "agreement" "negotiated" between IUOE
23
General Counsel Griffin and attorneys Stern and Levy, the IUOE did not live up to
24
its end of the bargain. Local 501's new Business Manager Christopher Brown
25
received instruction from James Van Dyke, Chief of Staff for General President
26
Vincent Giblin, who instructed Mr. Brown to fire Mr. Pette two weeks earlier than
27
October 31, 2009.
28
Page 25
1
Although Levy documented the "agreement" that was "negotiated"
2
with IUOE, Levy later prepared a falsified version of his correspondence in
3
subsequent litigation and provided the falsified version to the Court in an attempt to
4
conceal the conspiracy to oust Mr. Pette and undermine his insurgent candidacy
5
potential. That falsified letter omitted the "cc" notation indicating that it had been
6
sent to Mr. McLaughlin and omitted key provisions of the "agreement," such as it
7
was. A copy of the original confirmatory letter is attached hereto as Exhibit 5. The
8
falsified letter later prepared by Levy to conceal his conspiracy with Attorney
9
Griffin to force out Mr. Pette is attached hereto as Exhibit 6.
10
Spiro Moore llp
108.
109.
On or about October 17, 2009, Mr. Brown fired Mr. Pette as Business
11
Representative as well as from the positions of Trustee on both the Apprenticeship
12
and Health and Welfare funds.
13
110.
Contrary to the IUOE Constitution, Article 24, Subdivision 7, Section
14
E, Mr. Pette was charged by the IUOE with allegations that would have mandated
15
his removal from the office of Financial Secretary. Mr. Pette served his entire term
16
as Financial Secretary of Local 501. If, in fact, General President Giblin believed
17
the charges filed against Mr. Pette had merit, as General President, Mr. Giblin had
18
the authority and fiduciary obligation to remove Mr. Pette from elected office, and
19
thereby protect the membership of local 501.
20
111.
Further, in an additional breach of the "agreement," in and around
21
November 2009, Mr. Van Dyke ordered Mr. Brown to fire Mr. Himmelberg as
22
Assistant Business Manager, even though Mr. Brown told Mr. Van Dyke that he
23
needed Mr. Himmelberg's experience and knowledge and wanted to keep him as
24
Assistant Business Manager. Mr. Van Dyke told Mr. Brown that Mr. Giblin was
25
ordering Mr. Brown to fire Mr. Himmelberg. Reluctantly, Mr. Brown obeyed Mr.
26
Giblin and terminated Mr. Himmelberg's employment.
27
28
Page 26
1
2.
2
3
Certification Testing System
112.
The Building Owner Manager’s Association (“BOMA”) created a
4
certification intended to ensure that stationary engineers certified by BOMA were
5
properly educated about certain safe operating. This certification gave building
6
owners the assurance that their engineers were capable of safely operating in their
7
buildings. In return, certified engineers received $5 per hour more in pay. This
8
increase in pay also created a benefit for the locals, which were compensated by
9
employers based on hourly pay rates in effect for their members.
10
Spiro Moore llp
Lundy Helped Operate a Sham BOMA and EPA 608
113.
Local 501 was designated as the central testing center for BOMA and
11
EPA 608 certification. Locals around the United States were to send their test fee
12
to Local 501, where it would be graded and returned, including Locals 30, 68, 94,
13
and 399. Unfortunately, under Lundy, the system was corrupted.
14
114.
Cynthia Escanuelas would often take tests sheets and grade them
15
herself at the request of Dennis Lundy because the applicant was a friend of his or
16
of some particular Chief Engineer for ABLE or ABM. When tests were walked
17
through in this manner, those certification applicants always passed.
18
115.
The test questions and answers were made available to many members
19
at other local unions. Members at other local unions paid $50 for their test grading,
20
and Local 501 received 100 or more tests from other locals each month, but there is
21
no record of any test payment being deposited in the Apprenticeship Fund at Local
22
501. It appears that Lundy embezzled all of the test payments from other locals,
23
depositing only the payments from Local 501 members.
24
116.
The propagation of sham certifications affects both public and private
25
employers, since governmental entities also hire union stationary engineers to
26
operate and maintain government buildings.
27
28
Page 27
1
When Himmelberg and others audited the JAC for 2007 and 2006,
2
they were unable to locate any checks from any of the Locals paying for test
3
grading and certification issuance.
4
118.
The new JAC Director following Lundy, and other Local 501 members
5
that investigated, were never able to locate a single check deposited in an account
6
or a single certification application following Lundy’s departure.
7
Spiro Moore llp
117.
119.
When Lundy left, the entire program stopped because Locals no longer
8
submitted tests for grading or requested certifications. Lundy may have embezzled
9
$60,000 or more while he operated the BOMA and EPA-608 certification program
10
involving the other IUOE locals scattered across the country. All of those
11
individuals who received certifications through the Lundy certification operation at
12
the JAC today carry certification cards noting they received their certifications
13
from Local 501. They now work as certified engineers, at least in the states of New
14
Jersey, New York, and Illinois.
15
120.
Enrique Acala was an instructor at JAC. Mr. Acala sold the entire
16
BOMA test question set through a website. Mr. Pette filed a grievance about this
17
issue. Ed Curly, the Business Manager at the time, found no merit to the grievance
18
in order to stifle the claim. The refusal to control this practice jeopardizes JAC. It
19
also jeopardizes the public in general in that it means that employees in positions
20
requiring these safety certifications may not be qualified for those positions.
21
121.
From a financial standpoint, each certified engineer receives $5.00
22
additional per hour for each hour worked dating to the date of their certification. If
23
the certification is fraudulent, then each week the fraud is renewed by the $200
24
additional wages the falsely certified worker receives. In essence, there may be
25
thousands of IUOE members with fraudulently obtained certifications working in
26
positions in at least the states of New Jersey, New York and Illinois.
27
28
122.
The potential damages to the Local 501 JAC program by virtue of
Lundy's actions far exceed the $5.00 per hour additional compensation received by
Page 28
1
the certified stationary engineers. IUOE Local 501 Apprenticeship and Training
2
Programs could lose their certification from the DOL, State & Federal, for
3
fraudulent practices. All apprenticeship and training programs that qualify for
4
certification from the DOL are then tax exempt and the contributing employers get
5
the benefit of the tax exemption. This is a very important benefit to all contributing
6
employers.
Spiro Moore llp
7
123.
The 501 apprenticeship program might have to be dismantled and
8
obtaining recertification from the DOL State and Federal would take years, if it
9
were ever possible. The membership of IUOE Local 501 will no longer be
10
recognized by owners and employers as a source of well-trained apprentices and
11
journeymen. The legitimate employers and owners will seek help outside of the
12
Union. Any certified journeyman who passed the BOMA Test will be suspect as to
13
how he/she got qualified and the employers could legitimately demand that the
14
$5.00 per hour increase be returned, retroactively. The misconduct in the testing
15
program harms the reputations of all IUOE members and will expose them to
16
financial risk arising from doubts related to the integrity of the BOMA Test.
17
18
19
3.
124.
Lundy Absconded with Re-Election Campaign Funds
In addition to embezzling from the JAC, Lundy left 501 with more
20
than $10,000 is campaign re-election funds. Those funds were collected from
21
Local 501 members who had voluntarily donated money to the fund for use by the
22
current elected officers when running for re-election.
23
24
4.
Plaintiffs Discovered Evidence That ABM and Able
25
Conspired with the IUOE to Divert or Withhold Millions of
26
Dollars from Numerous Member Benefits Funds
27
28
125.
Able, a signatory to contracts with IUOE local unions, controls
roughly 25% of all stationary engineering positions in the state of California.
Page 29
1
2
Spiro Moore llp
3
126.
ABM, a signatory to contracts with IUOE local unions, control roughly
70% of all stationary engineering positions in the state of California.
127.
When Mr. Pette became the Financial Secretary of Local 501 in June
4
2007, he was asked by Mr. McLaughlin to investigate Lundy’s possible
5
embezzlement of funds from the Apprenticeship Fund. In addition to discovering
6
that Lundy had, in fact, embezzled tens of thousands of dollars by submitting
7
personal expenses, such as lunches with his mistress, for reimbursement, Mr. Pette
8
also observed that contributions to the Apprenticeship Fund seemed insufficient.
9
After an audit, it was determined that, in 2009, ABM had shorted the
10
Apprenticeship Fund approximately $180,000 and Able had shorted the
11
Apprenticeship Fund approximately $280,000. The shortfall should have been easy
12
to detect and correct, were it not for the invidious usurpation of control of Local
13
501 by Defendants.
14
128.
Under the BOMA contracts that were in effect for the 5-year period
15
spanning 2007-2011, the Apprenticeship Fund received $179 per member per year
16
from a signatory employer employing a member. Because membership numbers
17
are relatively stable, the contributions to the Apprenticeship Fund should also be
18
stable. However, an examination of IRS form 990 shows that this was not the case.
19
Year
Employer Contributions
20
2004
$484,739.00
21
2005
$438,760.00
22
2006
$613,517.00
23
2007
$719,827.00
24
2008
$590,124.00
25
2009
$1,079,473.00
26
2010
$1,273,390.00
27
28
The 2009 and 2010 figures represent the payments after Able and ABM were
Page 30
1
2
129.
Paul Bensi of Able, and Jim Scranton and Cornell Sneekes of ABM sat
3
as Employers’ Trustees of the Apprenticeship Fund. In that capacity, they helped
4
conceal for years the underpayments by Able and ABM to the Apprenticeship
5
Fund. They also used their influence to prevent audits of years prior to 2009.
6
Spiro Moore llp
forced to address the shortfalls in their contributions.
130.
Able and ABM were also shorting their contributions to the Health &
7
Welfare Fund at Local 501, established to purchase benefits, like healthcare plans,
8
for members. The shorting scheme was fairly simple. Members were required to
9
work a specific number of hours to be eligible for benefits through the Health &
10
Welfare Fund. Once an employer reported that an employee worked the necessary
11
number of hours, the employer was obligated to contribute money for each hour
12
worked by the employee. After a certain number of hours were worked the
13
employee-member would have fully funded that year’s benefits.
14
131.
For fulltime employees, Able and ABM reported the number of hours
15
needed to entitle the employee-member to full benefits, but then Able and ABM
16
stopped reporting all hours worked to eliminate their obligation to keep
17
contributing to the Health & Welfare Fund beyond the minimum necessary to fund
18
benefits. While this would facially seem to cause no harm to Local 501 members,
19
it was, in fact, highly prejudicial to the interests of members. When a member
20
received additional Health & Welfare Fund contributions beyond the minimum
21
necessary, those additional contributions would have, had they been paid, provided
22
for payment of benefits in future years, including upon retirement. By
23
underfunding the Health & Welfare Fund, Able and ABM deprived Local 501
24
members of this supplemental benefit cushion, causing great financial harm to
25
them. It is believed that Able and ABM may have jointly underfunded the Health
26
& Welfare Fund by millions of dollars over the Class period.
27
28
132.
The underreporting of hours resulted in a staggering cascade of other
harm to Local 501 and its members. First, the underreporting of hours deprived
Page 31
1
Local 501 of much needed administrative operating contributions that would have
2
been much higher had the correct number of hours been reported. This harmed
3
Local 501’s ability to operate. Second, Able and ABM were underfunding their
4
contributions to the General Pension Fund, which contributions also depend on the
5
number of hours worked.
Spiro Moore llp
6
133.
Despite this patent disregard of contractual obligations intended to
7
benefit Local 501 members (and other locals’ members around the country), Able
8
and ABM were richly rewarded by other Defendants, including, but certainly not
9
limited to, Vince Giblin. In return, Able and ABM richly rewarded the other
10
Defendants. For one example, Dennis Giblin, son of Vince Giblin, was employed
11
by International Union of Operating Engineers, Local 68. Dennis Giblin served as
12
the Administrator of the Local 68 Education fund, a fund governed by ERISA. As
13
Administrator to the Education Fund, Dennis Giblin was a fiduciary and required
14
under ERISA to act solely in the interests of the participants of the Education Fund;
15
to avoid acting in his own personal self-interest; and to avoid acting on behalf of
16
any party whose interests were adverse to the interests of the fund. In or about
17
November 2004, Dennis Giblin, on behalf of the Education Fund, hired an audio-
18
visual company to design and install electronic audio and visual systems at
19
Education Fund’s premises. For its services, Giblin caused the Education Fund to
20
pay the audio-visual company in excess of $315,000. Giblin also received free and
21
discounted audio-visual materials and components in August 2005. These items
22
were installed in his Jersey City condominium by the audio-visual company free of
23
charge because of the work the company had received from the Education Fund in
24
the past. In total, Giblin received an improper gratuity in excess of $10,000 in free
25
and discounted items, and free labor. These illegal gratuities resulted in criminal
26
charges being brought against Dennis Giblin in New Jersey (IUOE Local 68).
27
28
134.
On one occasion, believed to be in and around May 2010, while Lundy
was working for IUOE in support of the Senate re-election campaign of Harry
Page 32
1
Reid, he received a call from Vincent Giblin. Lundy used a speakerphone on the
2
call. Vincent Giblin advised Lundy that he had completed a deal with Able to
3
employ Dennis Giblin following Dennis’s criminal charges in Local 68. Vincent
4
Giblin also said that he made all audits in 501 “go away.” The audits referred not
5
only to the audits directed at Lundy, but the audits targeting Able and ABM as
6
well, and likely to uncover the extent of underpayments to JAC, the Health &
7
Welfare Fund, and the Central Pension Fund.
8
Spiro Moore llp
9
135.
Under federal law, it is a crime for an employee of an ERISA-covered
fund to receive or solicit any fee, kickback, commission, gift, loan, money, or thing
10
of value because of any of the individual’s actions, decisions, or other duties
11
relating to such fund. Dennis Giblin was arrested in January 2009. In 2010,
12
Dennis Giblin pleaded guilty in Newark federal court to receiving kickbacks and
13
embezzling in connection with a business transaction during his tenure as head of
14
the West Caldwell, N.J.-based union's job training and education program. The
15
guilty plea was entered relatively quickly by Dennis Giblin to discourage deeper
16
investigation into Local 68, which would have uncovered wider-ranging kickback
17
schemes with Able and ABM.
18
136.
Due to his conviction, Giblin was ineligible to work for IUOE or Local
19
68 under the LMRDA. So Vince Giblin approached Paul Bensi at Able and sought
20
a kickback for Able’s continued ability to operate double-breasted and underfund a
21
number of Trusts created for the benefit of rank and file union members, including
22
members of Local 501. Defendant Bensi created a high-paying position at Able for
23
Dennis Giblin, who was immediately hired by Able as consideration to Vince
24
Giblin. Dennis Giblin was then placed in charge of negotiating government
25
contracts at a salary believed to be commensurate with his former salary from
26
IUOE Local 68.
27
28
Page 33
1
137.
And Lauren Lundy, the daughter of Dennis Lundy, was given a job by
2
Bensi and Able in its Chicago, Illinois division, despite the fact that Dennis Lundy
3
left Local 501 after looting the Apprenticeship Fund.
4
5
5.
6
Spiro Moore llp
7
ABM and Able Conspired with IUOE to Operate “DoubleBreasted” and Deprive Local 501 of Members and Revenues
138.
Union contracts with ABM and Able require, at minimum, that any
8
building that is unionized through Local 501 must remain unionized in subsequent
9
labor contracts and new buildings added must be opened to Local 501 for
10
organization of the labor force in those new buildings. Among other things, ABM
11
and Able are obligated to provide the names and contact information for all
12
employees in non-unionized buildings added subsequent to the entry of the most
13
recent labor contract. ABM and Able, with the cooperation of IUOE following the
14
payment of kickbacks to IUOE leadership, did not comply with their labor
15
contracts.
16
139.
Instead, ABM and Able blatantly operate “double breasted.” In labor
17
parlance, “double breasted” refers to the side-by-side operation of unionized and
18
non-unionized workforces. For example, in a January 28, 2011 email, Maira
19
Rodriquez circulated job opportunities at ABM and requested feedback on any
20
necessary changes. The job opportunities listed both union and non-union
21
stationary engineer positions:
22
23
Date:
24
12/30/2010
Union Journeyman
Engineer
Multiple Locations - Los
16092923RWS
Angeles/ Orange County. M-F
days. Starting ASAP. Pay Rate
Union scale. Deadline until
filled.
1/27/2011
Building Engineers
(Chief, Assistant Chief,
Utility Engineer, and
San Diego, Day shift, starting
ASAP, $18-$35/hr, Operations
and maintenance engineer
25
Position Available
26
27
28
Details
Page 34
Job No.
1677TE
Building Engineer)
must be experienced [sic] in
HVAC boilers, chillers, and
energy management systems,
as well as electrical and
plumbing. Deadline until filled.
1/14/2011
Journeyman Building
Engineer
600 W. 7th Street. Los
16043160RD
Angeles, Swing shift M-F,
starting ASAP, Data Center,
pay rate Union scale, strong
electrical background, deadline
until filled.
3/30/2010
Union Journeyman
Engineer
Century Plaza Towers, Century 16054042RWS
City, Mon-Fri swing shift,
Starting ASAP, Class A High
Rise, Union Scale, Experience
needed, Deadline until filled.
1
2
3
4
5
6
7
8
9
10
11
Spiro Moore llp
12
13
14
15
16
17
18
And, in a December 30, 2010 email, Maira Rodriquez circulated job
opportunities at ABM and requested feedback on any necessary changes. The job
opportunities listed both union and non-union stationary engineer positions,
including the sample listed below:
Date:
21
1652CVB
6/10/2010
Union Cert One Person West LA, M-F Days, Starting
Plant
ASAP, Union Scale, 5-8 years or
higher of OPP experience.
Deadline until filled.
1602CVB
11/23/2010
Central Plant Operator
900 Corporate Pointe, Culver
City, Days M-F, January 1st,
central plant campus, $38-$40/hr.
deadline until filled.
16042877RD
8/3/2010
NU Engineer - Bldg.
Engineer
Beverly Hills, day shift M-F,
starting date to be determined,
Mid- rise, $30-$35, Strong HVAC
and strong electrical, EPA cert in
refrigeration, deadline until filled.
1607KS
24
25
26
27
28
Job No.
Certified/ Non Certified Newport! Irvine, M-F days,
OMP
starting ASAP, Class "A"
Complex, Union BOMA Contract
payscale, 5-8 years OMP
experience, deadline until filled.
22
23
Details
4/15/2010
19
20
Position Available
Page 35
1
8/3/2010
NU Engineer - Bldg.
Engineer
Beverly Hills, day shift M-F,
starting date to be determined,
Mid- rise, $30-$35, Strong HVAC
and strong electrical, EPA cert in
refrigeration, deadline until filled.
1604RD
3/30/2010
Union Journeyman
Engineer
Miracle Mile, Los Angeles, M-F
days (8-4), Starting ASAP, Class
A High Rise, Union Scale,
Experience needed. Deadline
until filled.
16042014RWS
3/30/2010
Union Journeyman
Engineer
16054042RWS
Century Plaza Towers, Century
City, Mon-Fri swing shift, Starting
ASAP, Class A High Rise, Union
Scale, Experience needed,
Deadline until filled
3/24/2010
Non-Union Engineer
(Part-Time)
Los Angeles,Part Time, 2-3 days
per week, Starting ASAP, $35/hr,
Strong HVAC and strong
electrical, EPA Cert in
refrigeration, Deadline until filled.
2
3
4
5
6
7
8
9
10
11
Spiro Moore llp
12
16093080KS
13
14
15
16
17
“N/U” or “NU” are non-union job opportunities.
140.
ABM also failed to disclose to Local 501 its contract to provide
stationary engineers to the entire California Courts system.
141.
Plaintiffs also investigated Able’s activities and discovered evidence
18
of widespread “double-breasted” operations. In one such case, referred to as the
19
“Jamison” contract, Plaintiffs found a thorough listing of properties owned by the
20
most notorious double-breasted building owner in Southern California, Dr. David
21
Lee (through Jamison Services, Inc.). Dr. Lee contracts extensively or exclusively
22
with Able Engineering for staffing engineers in his buildings. By comparing the
23
complete listing of all Able Engineering properties under the Local 501 CBA with
24
that list of David Lee properties obtained from his company's website, Plaintiffs
25
were able to indentify numerous buildings not disclosed to Local 501 for
26
organization. Well over 100 properties are missing from the Local 501 contract.
27
28
Page 36
1
IUOE Conspired With ABM and Able to Allow Them to
2
Circumvent Their Contract With Local 501 and Use Retired
3
Employees to Avoid Benefit Fund Obligations
4
Spiro Moore llp
6.
142.
Stationary Engineers are sometimes difficult to temporarily replace
5
when they are unavailable for work for any reason. A policy was put in place to
6
allow retired employees to work up to 40 hours a month in temporary coverage
7
positions while still retaining their Central Pension Fund benefits. The purpose was
8
to allow retired employees to cover spot vacancies for permanent employee
9
members, when, for example, the permanent employee took a two week vacation or
10
needed to take sick leave. Able and ABM misused the provision, bringing in
11
retired employees for longer periods. Able and ABM then paid them by 1099 to
12
hide them from detection during simple audits. Normally, Able and ABM would
13
have been required to pay a portion of Health & Welfare benefits for those retired
14
employees and pay into the Central Pension Fund for these retired employees
15
working in excess of 40 hours a month in any given month. Able and ABM never
16
paid their share of the Health & Welfare benefits and never paid into the Central
17
Pension Fund for the time worked by those retired members.
18
143.
The use of 1099 payments hid this practice from Local 501. Mr. Pette,
19
Mr. Himmelberg and Mr. McLaughlin were removed by Mr. Giblin to prevent them
20
from detecting the full scope of this activity. This practice harmed Local 501
21
membership but benefitted Bensi, who received enhanced bonuses based on
22
lowered labor costs, and benefitted Able and ABM, which avoided payments they
23
should have made if they reported honestly.
24
144.
Because they were also Health & Welfare Fund Trustees, Mr. Bensi,
25
for Able, and Mr. Scranton, for ABM, knew that Mr. Pette and Mr. Himmelberg
26
were initiating audits into Able’s and ABM’s practices causing underpayments to
27
JAC, Health & Welfare and the Central Pension Fund. Vincent Giblin, whose son
28
was employed by Able following his criminal ventures at Local 68, could not allow
Page 37
1
anything to upset his relationship with Able. Vincent Giblin immediately began his
2
campaign to remove Mr. Pette, Mr. Himmelberg and Mr. McLaughlin from any
3
position of authority in Local 501.
4
145.
The actions of Able and ABM were harmful to Local 501. An active
5
members, next on deck, who should have been employed, was denied work due to
6
the use of retired workers in the 1099 scheme. This harmed Local 501 and the
7
active member denied employment, as well as the various funds that did not receive
8
contributions for hours worked.
9
Spiro Moore llp
10
7.
Decertification Election Tampering by Giblin and IUOE at
11
UCLA Cost Local 501 Roughly 600 Members and Was Used
12
as One Pretext for Terminating McLaughlin
13
146.
Roughly 600 active members of Local 501 were employed at UCLA.
14
A decertification vote was scheduled to be held at UCLA. IUOE, through Giblin,
15
ordered Lundy to stuff ballots at a decertification vote at UCLA. As a result of
16
overzealous ballot stuffing, duplicate ballots were discovered by state officials
17
overseeing the election. Local 501 was given the option of facing charges or
18
walking away and allowing decertification. Giblin ordered Local 501 to walk away
19
to avoid any investigation into his orders. Giblin told Chris Brown, "Dennis and I
20
stuffed the ballots and you can't even hold onto something when I hand it to you."
21
As a result of the decertification, Local 501 lost roughly 600 active members. The
22
decertification was later used as one pretext for demanding the resignation of
23
McLaughlin at Local 501 and terminating him from positions at IUOE.
24
147.
In a lawsuit later brought against Levy, Attorney Griffin provided a
25
false declaration. In it, Attorney Griffin claimed that Levy would not have
26
succeeded if IUOE’s “monitorship” declaration was challenged. A true and correct
27
copy of Attorney Griffin’s Declaration is attached hereto as Exhibit 7. Attorney
28
Griffin swore under oath that the decertification was a reason for removing
Page 38
1
McLaughlin, but that was false. Attorney Griffin knew that Giblin had directed the
2
ballot stuffing effort in the UCLA decertification vote. And Attorney Griffin also
3
knew that the other pretextual reasons – the false Foley employment allegations –
4
offered for McLaughlin’s removal were unlikely to support the imposition of a
5
Trusteeship in Local 501.
6
7
IUOE and Curly, Acting Under IUOE Orders, Embezzled
8
Monies From Local 501 Members Related to the Members’
9
Efforts to Protect Mr. Pette and Mr. Himmelberg
10
Spiro Moore llp
8.
148.
When false charges for allegedly improper expense account use were
11
levied at Mr. Pette and Mr. Himmelberg to scuttle their efforts to lead an insurgent
12
slate of candidates into office at Local 501, members supporting their efforts to root
13
out corruption collected monies and paid IUOE all of the money that Mr. Pette and
14
Mr. Himmelberg were falsely accused of taking. Giblin took the members’ money
15
and then declared that it would not resolve the issue because Mr. Pette and Mr.
16
Himmelberg didn’t pay it themselves.
17
149.
After Mr. Pette and Mr. Himmelberg were cleared of the bogus
18
charges, the members expected that their payments would be returned to them.
19
Jack Pena, Erik Smith, Christopher Menor and Jay Brophy, among others,
20
contributed to the fund created to reimburse all monies used as the pretext for
21
creating fabricated charges against Mr. Pette and Mr. Himmelberg.
22
150.
On November 20, 2012, Ed Curly, the Business Manager installed at
23
Local 501 after Chris Brown was removed by IUOE, refused to reimburse members
24
for the monies they contributed in their effort to respond to the fabricated charges
25
against Mr. Pette and Mr. Himmelberg. At that time, Mr. Curly admitted that he
26
was operating under the direction of IUOE and would not reimburse their
27
payments. However, Mr. Pette’s payment that he made for the bogus fines were
28
refunded to him:
Page 39
1
2
3
4
5
6
7
8
Spiro Moore llp
9
151.
In addition to withholding thousands of dollars paid by Local 501
10
members on behalf of Mr. Pette and Mr. Himmelberg, IUOE has yet to issue the
11
promised letter to the members of Local 501, indicating that all charges against Mr.
12
Pette, Mr. Himmelberg and Mr. McLaughlin were either withdrawn or invalid.
13
14
9.
15
16
Able and ABM Management Employees Are Improperly
Participating in the General Pension Fund
152.
At least 27 management employees of Able and ABM have been
17
identified as improperly participating in the General Pension Fund. Bob Fox called
18
the General Pension Fund and spoke with Mike Fanning in an attempt to identify
19
the individuals improperly participating in that Fund. Mike Fanning said that the
20
information would not be provided to him, could only be provided at the request of
21
the local business manager, who has thus far, refused to make such a request.
22
153.
Eric Sorenson, a Vice President with ABM, is a member of the
23
General Pension Fund, though he should not be a participant in that Fund. Mr.
24
Sorenson attended the December 2012 semi-annual meeting of Local 501. At that
25
meeting, he took pictures of all individuals wearing the “Man in Black” shirt that is
26
a sign of support for the resistance to IUOE’s ongoing, unlawful dominion over
27
Local 501.
28
Page 40
1
IUOE’s Leadership Used Threats of Physical and Economic
2
Violence, and Suborned Perjury, to Suppress Investigations and
3
Usurp Control Over Local 501
4
Spiro Moore llp
D.
154.
On or about March 10, 2010, Robert Fox received a call from Vince
5
Giblin, then General President of IUOE. Mr. Fox had been a friend to the family of
6
General President Giblin for more than 30 years dating back to Vincent Giblin’s
7
father. The tone of this conversation was threatening to Mr. Fox. Mr. Giblin did not
8
communicate in the respectful manner typical of their prior conversations. When
9
Mr. Fox advised Mr. Giblin that he did not want Giblin to take action against Jim
10
McLaughlin, Dan Himmelberg and Finn Pette, the conversation became even more
11
confrontational and Mr. Giblin stated that he would kill or have these three union
12
officers killed.
13
155.
Mr. Fox believed the threats from Mr. Giblin to be genuine. Mr. Fox
14
believed that Vince Giblin had the ability to order the deaths of Mr. Mclaughlin,
15
Mr. Himmelberg, and Mr. Pette because of Mr. Giblin’s connection to organized
16
crime in New Jersey, Vince Giblin’s home territory.
17
156.
In direct response to the death threat made by Giblin against three of
18
the Union Officers of Local 501, Mr. Fox contacted these three individuals and
19
strongly suggested they purchase guns to protect themselves. Mr. Fox refused to
20
discuss anything over the phone because he knew Giblin had a penchant for
21
wiretapping and eavesdropping on calls and Mr. Fox feared his own phone was
22
tapped by Giblin. Moreover, he refused to meet the subjects of the death threats at
23
his home for his safety, his wife's and the safety of the Union Officers.
24
157.
In fact, for the past several years, IUOE has exercised total control
25
over Local 501, all for the purpose of preventing any discovery or disruption of the
26
many kickback schemes in place that divert tens of millions of dollars from Local
27
501 and its members to leaders of IUOE, including past IUOE General President
28
Vince Giblin, the current General President, Callahan, high ranking IUOE
Page 41
1
employees of headquarters and the past and current Vice Presidents that do the
2
bidding of the IUOE General President. For example, after Giblin used threats of
3
violence and termination to obtain Mclaughlin’s resignation as Business Manager
4
and the appointment of Chris Brown as the replacement Business Manager, Mr.
5
Brown has stated publicly in many District 1 union meetings that he had no choice
6
in Local 501 matters and that Mr. Giblin was directing his actions.
Spiro Moore llp
7
158.
On November 19, 2009, Giblin wrote to Bob Fox, telling him that
8
Local 501 would soon be placed under “monitorship.” As part of his warning to
9
Mr. Fox, Giblin said:
10
As part of the monitorship, I am instructing the local to conduct
11
its Executive Board meetings in executive session. The board will call
12
into its meetings any member, agent, employee, consultant or
13
professional that adds to its deliberations. Meeting in executive session
14
will allow the board to maximize its attention and energy on the road
15
ahead and not the road already traveled. All deliberations of the
16
executive board will be reported at the next regular membership
17
meetings.
18
This executive session requirement by definition excludes from
19
participation all non-board members, including retired officers, agents
20
and others who have previously served the local union. Thank you for
21
your attention in this matter.
22
This new requirement, imposed by IUOE and Giblin, eliminated the risk that any
23
members not under the control of IUOE could easily learn about and object to the
24
decisions imposed on Local 501’s members by Giblin and IUOE prior to their
25
implementation. A copy of Giblin’s letter is attached as Exhibit 8.
26
159.
Immediately before seizing control of Local 501, Giblin reached into
27
501 through Ron Frease, then the duly-elected President of Local 501. Giblin
28
ordered Mr. Frease to cancel a scheduled executive board meeting, before Local
Page 42
1
501 was placed under “monitorship.” The purpose of the order was to prevent
2
Local 501 from leading itself. No protections exist for the “monitorship” condition
3
under the IUOE constitution which, in fact, does not even expressly authorize
4
“monitorship” of a Local by the International.
Spiro Moore llp
5
160.
When officer elections were scheduled to occur at Local 501 in 2010,
6
some Local 501 members attempted to assemble a slate of candidates to restore
7
control of Local 501 to Local 501 members. Once IUOE learned of this it became
8
clear that IUOE’s General President and Vice-Presidents management, along with
9
and through the direction of Mr. Brown, were going to prevent the resistance slate
10
from running in the election. In particular, the Election Committee was rigged.
11
Executive board members were supposed to offer up names of members and a vote
12
should have taken place until all the positions were filled. Mr. Brown instead had a
13
pre-selected list of members for the Election Committee, and he forced it through
14
the vote of the Executive Board. Mr. Murphy was “elected” to head up the Election
15
Committee and it became rather apparent that he would do whatever he could to
16
prevent the election of any resistance slate members.
17
161.
In order to bolster its sham case and seize control of Local 501 from its
18
duly elected leadership, IUOE hired an “Ethics Officer,” James Zazzali, to
19
investigate “anonymous” reports of violations. This “Ethics Officer” position does
20
not exist in the IUOE Constitution. Nevertheless, Zazzali was paid $30,000 per
21
month to investigate anonymous ethics complaints, as set forth in LM-2 available
22
from the Department of Labor. Not coincidentally, as soon as Mr. McLaughlin was
23
forced to resign from Local 501 following extortionate threats, Giblin announced
24
that the IUOE would no longer investigate “anonymous” ethics complaint letters.
25
Giblin’s announcement that “anonymous” ethics complaint letters would no longer
26
be investigated coincided with the submission of “anonymous” ethics complaint
27
letters to the IUOE that discussed Lundy’s unethical behavior while still employed
28
by Local 501. The IUOE shut down the ethics investigations to protect Lundy, but
Page 43
1
only after they had seized control of Local 501 and forced out members interested
2
in auditing activities at Local 501.
Spiro Moore llp
3
162.
At this juncture, on or about December 2009, the IUOE brought
4
trumped up charges against Mr. Pette and Mr. Himmelberg for the purpose of
5
preventing them from running for office. In furtherance of the scheme, the Election
6
Committee disallowed both Mssrs. Pette and Himmelberg from running for office
7
based on the false charges discussed above, though they were later found to be
8
innocent of the trumped up charges. Furthermore, the resistance slate was denied a
9
slate position on the ballot. The remainders of the resistance members running for
10
office were then listed on the ballot as individuals. The Election Committee then
11
imposed arbitrary rules regarding the collection of signatures in violation of the
12
LMRDA, with the Election Committee changing the arbitrary rules several times in
13
an effort to prevent resistance members from qualifying for the ballot. Although
14
Local 501 members requested that the Election Committee members appear at
15
monthly district meetings, they refused to appear and be held answerable for
16
blatantly changing the rules with no explanations offered.
17
163.
It was evident to union members who attended the District meetings
18
that the entire operation of Local 501 was being run by IUOE and that Mr. Brown
19
was simply a mouthpiece for IUOE. Mr. Brown frequently admitted he effectively
20
had no autonomy in that when he would be questioned by members he replied that
21
he would "have to check with the International". The cellular telephone billings for
22
the phone assigned to Mr. Brown conclusively establish the domination and control
23
the international had over all union activity at IUOE Local 501. As the cellphone
24
bills establish, often multiple calls on a daily basis were made to the International
25
IUOE to Defendants Giblin, Griffin, Van Dyke and to other employees holding
26
positions at the IUOE International Headquarters. Following the retirement of Mr.
27
Giblin and the appointment of Defendant Callahan, cellular phone calls were
28
logged with calls to Defendant Callahan.
Page 44
1
While Plaintiffs Pette and Himmelberg were running for elected office,
2
an anonymous email chain was circulating amongst union members from “The Man
3
In Black,” informing them about IUOE’s efforts to control Local 501 and prevent
4
Pette and Himmelberg from running for office. It was discovered around that time
5
that ABM representatives were advising Local 501 members working there that Mr.
6
Pette had no chance of winning the election. Moreover, those Local 501 members
7
with email addresses from Able were suddenly unable to receive the “Man In
8
Black” email newsletters through their Able email addresses. In other words, ABM
9
and Able were working in concert with the IUOE to impede fair elections in Local
10
501, Able by blocking insurgency email communications and ABM by spreading
11
anti-insurgency predictions.
12
Spiro Moore llp
164.
165.
After Dan Himmelberg was terminated without cause, Mr.
13
Himmelberg sued for wrongful termination. On February 24, 2012, during that
14
litigation, Chris Brown, the Local 501 Business Manager that delivered the
15
termination message to Mr. Himmelberg, was deposed by attorney Lee Feldman.
16
During the deposition, Mr. Feldman asked Mr. Brown why Daniel Himmelberg
17
was terminated as the Assistant Business Manager of Local 501 in November 2010.
18
Mr. Brown asked to take a break and one was provided. Mr. Brown left the room
19
where the deposition was being conducted.
20
166.
Mr. Brown returned a few moments later and asked if he could speak
21
off the record before going back on the record. Mr. Feldman agreed. Mr. Brown
22
told Mr. Feldman that James Callahan, the General President of IUOE, told him to
23
“get amnesia” about the true facts related to Mr. Himmelberg’s termination and to
24
say he made the decision himself. Mr. Brown also told Mr. Feldman that General
25
President Callahan instructed Mr. Brown to testify that Mr. Brown alone made the
26
decision to terminate Mr. Himmelberg’s employment as Assistant Business
27
Manager of Local 501. The Declaration of Attorney Lee Feldman, confirming the
28
admission of Chris Brown, is attached hereto as Exhibit 9.
Page 45
1
During a deposition in another lawsuit against the IUOE and Mr.
2
Brown brought by Blair Brim, Mr. Brown testified to the IUOE’s instructions
3
regarding the removal of McLaughlin and Pette:
4
Q. Finn Pette, did you make the decision to fire him?
5
A. No, I didn't.
6
Q. Okay. The international [IUOE] directed you to do it?
7
A. Yes, that was part of the deal for McLaughlin to have to leave, that
Pette had to go, as well.
8
9
10
11
12
Spiro Moore llp
167.
Q. But it wasn't your decision?
A. No.
(March 7, 2011 Deposition of Brown, at 149:14-23.)
168.
After IUOE had successfully seized control of Local 501 and
13
prevented the “resistance” candidates from mounting a successful challenge, Vince
14
Giblin instructed Defendant Bensi not to employ Mr. Pette. Defendant Bensi
15
instructed all of the Chief Engineers employed by Able that they were not to
16
employ Finn Pette. Finn Pette was blackballed coast-to-coast.
17
169.
Bob Fox was also threatened by Callahan. In January 2012, Callahan
18
flew across the United States and went out of his way to mention individuals
19
known by Bob Fox to be connected with East Coast mafia. At the January 17, 2012
20
District 1 meeting for Local 501, James Callahan rose to speak:
21
22
Thank you Chris.
Aah, I would just like to say hello. I’ll be brief here. I want to
23
introduce myself. I’m a 33 year member of the operating engineers
24
hoisting and portable out of New York City. I was asked to take this
25
job on as General President and aah I’ll try to do my best. Umm it’s an
26
honor to come out here, umm under the turmoil that aah you guys have
27
gone through and there is one announcement that we that we discussed
28
today and what I’m going to do aah aah and one of my first duties is to
Page 46
Spiro Moore llp
1
assign the General Secretary Treasurer aah Brian Hickey to assemble a
2
small committee to release you from monitorship. I expect that report
3
to be done and in front of the General Executive Board by April and
4
umm I don’t fore see any issues.
5
Aaah aah you’ve you’ve gone through turmoil, aah for anyone
6
that doesn’t know my histories I took over my aah in some aah some
7
uncertain times and aah the best thing I aah advice I could give you is
8
solidarity because there are a lot of wolves at the door that are looking
9
at to take us apart. And no matter what are differences are they should
10
stay in this room. Because they are just waiting to take us apart and
11
they love to see us all at each other’s throats and whatever our
12
differences are should be settled here. They should be settled
13
democratically, so everyone gets their fair share.
So with that like I said you you aah my first duties as General
14
15
President will be to release you from monitorship. And I wish you all
16
luck if there is anything I can ever do to you, Mr. Fox it is an honor to
17
see you again, thank you aah, I don’t know if you remember me from a
18
long time ago with Tom Maguire aah junior and Senior.
19
Bob Fox responded, “Sure do”. Callahan continued:
And aah a friend of yours from New York, a fellow by the name
20
21
of Dan Murphy, knew I was coming out here and he said if I saw you
22
to send you his regards aah you know good health.
23
24
Bob Fox responded, “Thank you”.
170.
For more than 25 years Tommy Maguire served as the Business
25
Manager of IUOE Local 15, New York City. However, in 2005, shortly before his
26
69th birthday, Maguire, alongside three other union officers, admitted to taking
27
bribes from contractors in a scheme that had helped to vastly inflate the cost of
28
construction. Going back to 1989, he acknowledged in court, he had accepted
Page 47
1
payoffs, sometimes in the form of Christmas gifts, from at least two contractors.
2
Until his resignation, he was the leader of the 6,000 engineers who run New York
3
city's cranes, backhoes, bulldozers, and hoists. He headed Local 15’s powerful
4
statewide organization, and ran its wealthy political action fund, which gave
5
hundreds of thousands of dollars annually to favored politicians. Most of the bribe-
6
passing was done through two former business agents, including Maguire's son-in-
7
law, Thomas McNamara, and Daniel Murphy, both of whom pled guilty alongside
8
Maguire. Attached hereto as Exhibit 10 is the indictment filed against McGuire,
9
McNamara, Murphy and Anthony Quaranta.
Spiro Moore llp
10
171.
Callahan, the current Business Manager of Local 15 and General
11
President of IUOE (a violation of the IOUE Constitution in that the President
12
position is a full time position), knew that Bob Fox would be aware of the names of
13
these convicted racketeers who had just finished serving their federal prison terms.
14
Bob Fox knew that Callahan’s references to Tom Maguire and Dan Murphy were a
15
warning and thinly veiled threat directed at him. Moreover, the threat was
16
delivered in a way that would not have been obvious to many of the Local 501
17
members without Bob Fox’s history with the IUOE, and unfamiliar with East Cost
18
organized crime-related IUOE activity.
19
172.
At that same January 17, 2012 meeting, Callahan pulled Mr. Pette to
20
the back of the room to have a conversation. He asked, "What do you want?" Mr.
21
Pette had made a motion that the Local Union begin accepting Dan Himmelberg’s
22
dues because they refused to accept them while he hadn't paid his sham “fine.” Mr.
23
Pette began to explain the situation regarding Mr. Himmelberg’s dues assuming
24
that was what Callahan was referring to with his question. He immediately stopped
25
Mr. Pette, and said, "I don't give a shit about Dan’s dues! What do YOU want?"
26
Startled, Mr. Pette asked, "What do you mean?" Callanhan said, "What do you
27
think I mean? What do you want to make all of this go away?" Mr. Pette asked,
28
"Are you talking about the lawsuits?" Mr. Callahan asked, "What do you think I'm
Page 48
1
talking about?" Mr. Pette asked him to give him a little time, but Callahan said he
2
wanted to handle it immediately. Mr. Pette told Callahan that he wasn't prepared for
3
Callahan’s question and said, "It's a little hard to swallow. I've been at war with the
4
International for three years and you walk up and say what do I want? I mean, its
5
hard when the most powerful guy in the International talks to you when nobody
6
would return a phone call for three years you know?" He responded, "Let's get
7
something straight, YOU are the most powerful man in the IUOE, JOHNNY! And I
8
don't need anything we talk about showing up on the fucking internet tomorrow,
9
got it?" Mr. Pette knew that Callahan was referring to the "Man In Black" e-mails
10
that had become so prevalent in the past several years as a source of information to
11
members of the Operating Engineers union.
Spiro Moore llp
12
173.
Mr. Pette asked to confer with Dan Himmelberg and agreed to meet
13
the following morning at the Bonaventure Hotel in downtown Los Angeles with a
14
list of what they wanted. The following morning, they presented a settlement
15
demand on behalf of themselves and Mr. McLaughlin that included a demand for
16
an admission by IUOE that they were falsely accused. Callahan said they would
17
never receive a penny from IUOE because they weren't responsible. Mr. Pette and
18
Mr. Himmelberg discussed the actions of Vincent Giblin, Dennis Lundy, Jim Van
19
Dyke and Callahan said, "Look, I can't undo what happened before me. I can't spit
20
on Vincent, he gave me the job." They repeated their settlement proposal and told
21
Callahan that the proposal was what they wanted. Callahan promised to take their
22
requests to the General Executive Board.
23
24
E.
Defendants Diverted Caremark Reimbursements from Local 501’s
25
Health & Welfare Fund to IUOE and Imposed Caremark on
26
IUOE Despite the Excessive Costs
27
28
174.
Vince Giblin was Chairman of the Board for Horizon Blue Cross at the
same time he became General President of the IUOE. Because of his dual roles,
Page 49
1
Giblin was able to require use of Blue Cross as the healthcare benefits provider to
2
local unions, including Local 501. Blue Cross utilizes Caremark as its Prescription
3
Benefits Manage (“PBM”). Because of the number of members utilizing the Blue
4
Cross/Caremark benefit, members are entitled to receive a rebate from Caremark,
5
reflecting the members’ substantial buying power. The Caremark rebates should
6
have been paid out to each local union. Instead, they were paid to IUOE. IUOE, in
7
turn, failed to account to Local 501 (and other local unions) for the rebates they
8
should have received.
Spiro Moore llp
9
175.
The contract with Caremark is held by IUOE, not Local 501. Terms
10
are negotiated by Trivantage, an entity retained by IUOE, not the Health & Welfare
11
Trust Fund at Local 501. Fees are charged to Local 501’s Health & Welfare Trust
12
Fund to pay Trivantage, even though Trivantage is not under contract with Local
13
501.
14
176.
Efforts to obtain less expensive PMB services were and are futile so
15
long as IUOE imposes its dominion and control over Local 501’s affairs. In
16
October 2009, John St. John, an attorney at St. John, Wallace, Brennan & Folan
17
LLP, warned the Trustees of the Health & Welfare Trust Fund that efforts to
18
replace Caremark as the PBM had political overtones. For example, in an October
19
20, 2009 e-mail, Mr. St. John wrote:
20
I think some complaint should be made to the IUOE about
21
Trivantage’s non response. However, this might have political
22
overtones, so I'll leave it up to you to decide whether such a complaint
23
should be made, and if so whether it should come from you (or
24
someone else at Local 501) or from me. Let me know.
25
As explained above, Trivantage was employed by IUOE to negotiate the terms of
26
PBM services with Caremark and disregarded the representatives of the Local 501
27
Health & Welfare Trust Fund.
28
Page 50
Spiro Moore llp
1
177.
In 2009, Caremark reached a settlement in New England Carpenters as
2
a result of allegations of overcharging third party payors, such as Local 501’s
3
Health & Welfare Fund. In response to being forced by this settlement to
4
reimburse third party payors for overcharges, Caremark asserted a right to
5
unilaterally increase rates charged to Local 501’s Health & Welfare Fund for PBM
6
services. On this behavior, counsel to Local 501’s Health & Welfare Fund said:
7
I have said before that, as fiduciaries, you should not consent to
8
the modification unless the Fund receives something in exchange. If in
9
fact (i) Caremark would not offer the new contract (or any new
10
contract) to the Fund unless you consented to the modification, and (ii)
11
the Fund could not obtain a contract from another PBM that was at
12
least as good as Caremark's proposal, then it would be legally
13
appropriate to give your consent to the modification.
14
Of course, "consent" appears to be moot here, since Caremark
15
has already unilaterally implemented the pricing change. I doubt that
16
my recent letter to Caremark's counsel will prompt Caremark to unring
17
the bell and reinstate the pre-September pricing method. This means
18
that recovery of the excess charges under the modification would
19
require some action by you, meaning litigation. So "consent" would
20
mean a decision not to take any action against Caremark.
21
A couple of points here. First, as fiduciaries you are not
22
compelled to take legal action on behalf of the Fund if the anticipated
23
costs and risks of litigation outweigh the anticipated benefits. As I said
24
earlier, it looks to me that the pricing modification implemented by
25
Caremark will cost the Fund about $30,000 (although this is a very
26
rough estimate). There is no provision for attorneys' fees in the
27
contract, so even if you won in any suit the Fund would have to bear
28
its own legal fees.
Page 51
1
So, in simpler terms, Caremark got away with one because (a) the cost of litigation
2
was an impediment to making them do the right thing, and (b) IUOE was making
3
sure that no such litigation occurred to protect the sweetheart deal arranged by
4
Giblin.
5
McLaughlin, after threats from Giblin, advised other Local 501 Health
6
& Welfare Fund Trustees that Local 501 had to accept Caremark and Giblin had
7
threatened retaliation if they refused. The Trustees stopped soliciting bids from
8
other PMB providers, regardless of the price bids, even though they already had
9
lower-priced bids in hand. The Trustees of Local 501’s Health & Welfare Trust
10
Fund acquiesced, under duress, to this extortionate pricing by Caremark, the PBM
11
imposed on them by Giblin and IUOE.
12
Spiro Moore llp
178.
179.
Caremark’s rates for PBM services are significantly higher than the
13
rates charged by comparable competitors. For example, Local 3, another IUOE
14
Local in California, put out the PBM package for competitive bid. Caremark’s bid
15
was fourth by price. Caremark’s bid was roughly $4 million higher than the winner
16
of the bidding process. Giblin was told that Medco had won the bid process, so
17
Giblin was aware that Caremark’s rates were significantly higher than other
18
options, and continued insistence on the use of Caremark was detrimental to
19
members and contrary to fiduciary obligations of Fund trustees and Union
20
leadership to their members.
21
180.
The Business Manager of Local 49, Glen D. Johnson, was dissatisfied
22
with Caremark’s service and lack of transparency. The Trustees of their Health &
23
Welfare Trust Fund put out the PBM contract for competitive bid to replace
24
Caremark. Vince Giblin told Johnson to put Caremark back in. Johnson declined,
25
saying that Local 49 was ready with a new PBM provider and Mr. Johnson had no
26
vote on the Board of Trustees of their Health & Welfare Trust Fund. Mike
27
Treanor, Interim Director of Research & Education, was dispatched by IUOE and
28
Giblin to Minnesota to demand a second round of bids for PBM services and
Page 52
1
attempt to stack the deck for Caremark. Even with that interference, Caremark’s
2
bid was not the low bid. Counsel advised the Trustees that they would be violating
3
fiduciary duties if they didn’t move forward with new contract. Glen Johnson, a
4
Member of the IUOE General Executive Board, was told by Giblin to resign from
5
the Executive Board as a Trustee. Mr. Johnson was next told by John Hamilton,
6
Second Vice President of IUOE at the time, to resign as Vice President of the North
7
Central States Conference. Hamilton was the President of the North Central States
8
Conference at that time. The effect of these actions is to leave Johnson isolated at
9
Local 49.
10
11
F.
Spiro Moore llp
12
13
Defendants and Their Agents Destroyed or Removed Records That
Should Have Been Retained by Local 501 for 5 Years
181.
While Chris Brown worked as the Business Manager of Local 501, he
14
was observed downloading approximately ten flash drives full of emails and other
15
electronic records. In addition, the contents of an entire room filled with file boxes
16
belonging to Local 501 were shredded at the behest of IUOE to limit the ability of
17
auditors to investigate underpayments and other wrongdoing by Able and ABM.
18
182.
Sandra Acosta, who operated the Bakersfield office for Local 501,
19
removed or destroyed files maintained in that office and relating to employees
20
working in positions in and around Bakersfield.
21
183.
Sandra Acosta also operated her own business out of the Bakersfield
22
office of Local 501. Her business, “On The Greene LLC,” was formed July 8,
23
2003 according to records on file with the California Secretary of State. On The
24
Greene LLC sells custom golf markers and other promotional gift items. On The
25
Greene LLC sold golfing promotional items across country to various local union
26
chapters. In particular, On The Greene LLC sold its merchandise to IUOE Locals
27
138, 30, 68 and 12. Jim McLaughlin learned of the business when Bill Duffy
28
called 501 about an order.
Page 53
1
184.
Thus, it is also possible that documents Acosta destroyed in
2
Bakersfield were records related to other businesses that Acosta owned or invested
3
in, including On The Greene LLC and Foothill Resources, Inc.
4
185.
Van Dyke has removed current records of Local 501 and delivered
5
them to IUOE. The removal of those records from California is a violation of the
6
LMRDA 5-year record retention requirement.
7
8
G.
9
Spiro Moore llp
10
Professionals Under IUOE’s Control Acted at the Direction of
IUOE to Harm Local 501
186.
To further its scheme to seize control of Local 501 and protect its long-
11
standing kickback arrangements with Able and ABM, the IUOE utilized a number
12
of professionals to operate as its agents supporting its unlawful agenda.
13
187.
For example, as described above, Defendant Levy conspired with
14
IUOE to convince Mr. McLaughlin to resign, thereby allowing IUOE to seize
15
control of Local 501 and remove other Plaintiffs from positions where they might
16
continue challenging Defendants’ conduct, conduct audits, and expose the many
17
kickback operations in place.
18
188.
Defendant Randy Henningfield, charged with auditing Local 501
19
funds, including the Apprenticeship Fund, instead conspired to conceal evidence of
20
malfeasance by Lundy and his Henningfield’s wife, Escanuelas, to the detriment of
21
Local 501. For his misconduct, Randy Henningfield was rewarded with additional
22
assignments by Local 501 and IUOE.
23
24
H.
25
26
Consigliore Griffin Created Policies to Protect the Hand-Selected
Leadership Placed in Control of Locals by IUOE
189.
In 2007, Mike Quigley, a member of IUOE Local 150, which covers
27
much of Indiana, Illinois, and Iowa, took action to try and stop the corruption that
28
pervaded his local. Mr. Quigley teamed up with an insurgent candidate to unseat
Page 54
1
Bill Dugan, Local 150’s longtime president and Business Manager. Mr. Quigley
2
created a rudimentary website to document the malfeasance of the local’s
3
leadership under Dugan.
Spiro Moore llp
4
190.
But IUOE headquarters stepped in, passing a rule that forced all
5
candidates to password-protect their campaign websites, allowing access only to
6
union members and barring the general public. The rule made it difficult for
7
insurgent candidates to spread the word to other members, thereby protecting the
8
incumbent. Pushing the rule that contributed to the failure of Mr. Quigley’s
9
challenge was Attorney Griffin, then the IUOE’s general counsel, who was later
10
appointed by President Obama to the National Labor Relations Board (NLRB).
11
Three years later, Dugan was indicted for violations of federal labor law and
12
sentenced to three years of probation. Attorney Griffin routinely acted on behalf of
13
IUOE to prevent reforms of IUOE Locals, reforms that would have reduced
14
IUOE’s control over the supposedly autonomous Locals, such as Local 501.
15
16
I.
Giblin and IUOE Selected Zazzali to Fabricate the Appearance of
17
Ethical Conduct by IUOE, While Actually Using Zazzali as
18
Another Tool for the Oppression of Members Challenging IUOE’s
19
Widespread Corruption
20
191.
While Ethics Officer Zazzali was ostensibly appointed to ensure
21
ethical behavior throughout the IUOE by investigating ethical violations and
22
reporting to the IUOE Board, the truth of Zazzali’s purpose was far different. The
23
ethics rules were not applied to the IUOE leadership or their made men. For
24
example, Vince Giblin received as much as $199,625 from the Blue Cross Board
25
while simultaneously serving as GP of IUOE. Despite this conflict of interest
26
demonstrated in the most severe manner when Giblin forced Locals to use over-
27
priced Caremark PBM services in direct violation of fiduciary duties to Health &
28
Welfare Fund participants and beneficiaries at Locals, including Local 501, Giblin
Page 55
Spiro Moore llp
1
suffered absolutely no adverse action through Ethics Officer Zazzali for this
2
unethical conduct. Attached hereto as Exhibit 11 are copies of Vince Giblin’s LM-
3
30 filings, confirming the conflicting employment. Shockingly, Attorney Griffin
4
caused several of those LM-30 filings to be hand delivered to the U.S. Department
5
of Labor, but, in true consigliore fashion, he evidently never counseled boss Giblin
6
against pursuing this very real conflict that manifested itself in Giblin’s Caremark
7
scam. The IUOE Constitution, attached hereto as Exhibit 22, explicitly prohibits
8
self-dealing in connection with any member welfare plans. Constitution, Article
9
XVI, Section 7.
10
192.
Callahan has also escaped the scrutiny of Ethics Officer Zazzali.
11
Callahan serves both as General President of IUOE, acting as the Chairman of the
12
Executive Board, and as Business Manager to Local 15. A Press Release by IUOE
13
identifies Callahan’s dual roles and is attached as Exhibit 21. This dual service is
14
prohibited by the IUOE Constitution, which states that the General President “shall
15
devote his full time to the duties of his office.” Constitution, Article VI, Section 5.
16
The IUOE Constitution is attached hereto as Exhibit 22.
17
193.
Similar to Giblin, John M. Hamilton, the Business Manager at Local
18
324 and former Second Vice President of IUOE also served on the Board of Blue
19
Cross Blue Shield of Michigan. Blue Cross Blue Shield of Michigan provides
20
Health Benefit Claims Administration for the Trust at Local 324. But Zazzali has
21
yet to report that Hamilton is operating in a position of perilous ethical impairment.
22
Certain of Mr. Hamilton’s LM-30 filings from 2004 to 2011 are attached as Exhibit
23
19.
24
194.
In addition to the conflict posed by Mr. Hamilton’s work for the Board
25
of Blue Cross Blue Shield of Michigan, he engaged in very public dealings with a
26
convicted investment fund embezzler. As a quid pro quo for promising to invest
27
over $60 million of union pension funds with John Orecchio of AA Capital
28
Partners, Mr. Orecchio is alleged to have arranged for the purchase of Mr.
Page 56
1
Hamilton’s home at a significantly inflated price. Mr. Hamilton exercised his Fifth
2
Amendment privilege when asked to testify by the SEC. Ethics Officer Zazzali
3
apparently found nothing irregular with this conduct either. Orrechio’s indictment
4
is attached as Exhibit 12. A Detroit news article provides additional background
5
and is attached as Exhibit 20.
Spiro Moore llp
6
195.
Terrence “Terry” McGowan was accused in a NLRB complaint of a
7
series of threats of violence and economic retribution directed against any member
8
of Local 139 that filed any charges against the union with the NLRB. McGowan
9
settled the complaint and, at about that same time, was appointed to the General
10
Executive Board as a Vice President, suggesting that conduct such as McGowan’s
11
was rewarded by IUEO, not punished. As with misconduct by other IUOE
12
leadership, Ethics Officer Zazzali saw nothing here worth investigating. The
13
settlement agreement is attached as Exhibit 13.
14
196.
IUOE Board Trustee John “Jack” Ahern has also escaped scrutiny by
15
ethics officer Zazzali (though he would likely demur that he has no obligation to
16
investigate anyone where no complaint is filed and anonymous ethics complaints
17
are no longer accepted now that Zazzali’s business with Jim McLaughlin and Local
18
501 is concluded – of course, no member interested in their own safety and
19
livelihood would file a complaint against any IUOE Board Member if they had to
20
subscribe their name to it). In June 2007, Dennis Lundy stayed at the Millenium
21
Hilton, in Richmond Hill, New York. But Mr. Lundy didn’t pay for that room; it
22
was provided to him by John Ahern (though Mr. Lundy did charge his incidental
23
alcohol and pornography to the American Express card he routinely abused while
24
working for the Training Trust at Local 501). John Ahern didn’t pay for that room
25
either. It was “comped” to him by Millenium Hilton. Millenium Hilton is a
26
signatory to a collective bargaining agreement with IUOE. As an employer of
27
union members, Millenium Hilton is prohibited from giving, and all IUOE
28
members and employees are prohibited from receiving, any gifts from Millenium
Page 57
1
Hilton. The room received by Ahern and given to Lundy constitutes an employer
2
kickback to IUOE members. Mr. Lundy’s American Express bill page reflecting
3
his incidental charges is attached as Exhibit 14. The room bill in Mr. Ahern’s name
4
is attached as Exhibit 15. The departure payment receipt by Mr. Lundy is attached
5
as Exhibit 16. Once again, Ethics Officer Zazzali is nowhere to be seen, which is
6
consistent with his purpose: create the illusion of a Code of Ethics and then enforce
7
it without due process against any members that would dare to challenge the IUOE
8
aristocracy.
Spiro Moore llp
9
197.
Regarding Dennis Giblin, the son of Vince Giblin, Zazzali was
10
required to respond to a complaint contenting that Dennis Giblin, who plead guilty
11
to embezzlement charges filed by the government, should be expelled from IUOE.
12
Zazzali concluded that because Dennis Giblin, currently on withdrawal from IUOE
13
Local 68, he need not be expelled. This ruling by Zazzali paves the way for Dennis
14
Giblin’s eventual return to IUOE after he hides for enough years at Able, collecting
15
the large management-level salary that he qualifies for as a convicted felon.
16
Zazzali’s Report on Dennis Giblin is attached hereto as Exhibit 17.
17
18
19
20
198.
In Section III, entitled “Financial Practices,” the IUOE Code of Ethics
says:
C. The Union shall not permit any of its funds to be invested in a
manner that results in the personal profit or advantage of any Union
officer, employee or representative.
21
Mr. Giblin was permitted to obtain personal advantage as a result of this
22
relationship with Blue Cross, in violation of the IUOE Code of Ethics. Ethics
23
Officer Zazzali, who acts to serve the interests of the IUOE leadership that selected
24
him, had done nothing. By contrast, Ethics Officer Zazzali seemed very concerned
25
of the potential conflict of interest that could occur if a Chief Engineer at Local 501
26
served as a District Representative because of the tension between serving the
27
interests of members and the interests of the employer. A true and correct copy of
28
March 19, 2009 correspondence from Ethics Officer Zazzali is attached hereto as
Page 58
1
2
Exhibit 18.
199.
Mr. Pette wrote letters to Ethics Officer Zazzali, outlining the
3
embezzlement of apprenticeship funds by Dennis Lundy and stating that it was his
4
belief that Ethics Officer Zazzali was being used as a weapon against Jim
5
McLaughlin in retaliation for that investigation. Ethics Officer Zazzali never
6
responded to Mr. Pette’s letters about Lundy and McLaughlin.
7
200.
Although Article 8 of the IUOE Constitution requires written
8
determinations by Ethics Officer Zazzali, in all cases involving Local 501, as far as
9
any member of Local 501 knows, Ethics Officer Zazzali failed to prepare any
10
written Reports for submission to the General Executive Board of IUOE.
11
Spiro Moore llp
12
J.
13
14
Able and ABM Are Targeting Local 501 Employees Sympathetic
to the Resistance and This Lawsuit
201.
Individuals known or believed to be sympathetic to or cooperative with
15
the resistance in Local 501 are now being targeted in retaliation by Able and ABM.
16
Pat Adams, a “Super Chief” and Erik Smith were terminated because it was
17
believed that they were sympathetic or cooperative with the resistance in 501. Able
18
personnel were at union meetings and observed Mr. Smith and others wearing
19
clothing or pins indicating their support for the “resistance” at Local 501. Able
20
personnel observed “resist” buttons on Mr. Smith and others at their job site.
21
22
K.
23
24
Fiduciaries to Local 501 Caused Harm to Local 501 in Order to
Further IUOE’s Plan to Secure Complete Control Over Local 501
202.
At the behest of Callahan and IUOE, Local 501 was precluded from
25
fully defending itself against the wrongful termination suit filed by Blair Brim and
26
described above. As a result, Mr. Brim obtained a judgment of roughly $6 million
27
against Local 501. Mr. Callahan threatened Lee Feldman, counsel for Mr. Brim,
28
telling him that he would, acting through the “monitorship” the International had
Page 59
1
imposed upon Local 501, force Local 501 into bankruptcy if Feldman didn’t accept
2
the offered settlement for the Blair Brim judgment. Mr. Feldman refused to
3
succumb to the threats of Mr. Callahan, and Mr. Callahan caused Local 501 to file
4
for bankruptcy protection.
5
Similarly, the suit filed by Ms. Acosta was settled at a higher than
6
necessary amount because Mr. Giblin refused to testify at a deposition, knowing
7
that Ms. Acosta could have exposed substantial unlawful conduct by Mr. Giblin.
8
9
Spiro Moore llp
203.
204.
After the filing of this action, IUOE, through Callahan, advised Local
501 that by virtue of the bankruptcy that he and IUOE forced on Local 501, Local
10
501 could not nominate or seat delegates to the IUOE national convention being
11
held later this year. This prevents Local 501 from voting on changes to the IUOE
12
constitution and voting on officers. It was also done to prevent Local 501
13
representatives from co-mingling with members of other Locals that might be
14
motivated to challenge IOUE’s illegal conduct through their Locals. The
15
convention is held once every five years. This interference with the rights of Local
16
501’s members is profoundly injurious.
17
18
L.
IUOE and IUOE’s Hand-Picked Operatives Will Not Permit Local
19
501 Members to Nominate and Elect Delegates of Their Choosing
20
to Attend the IUOE General Convention in April 2013
21
205.
Once every five years, every member of IUOE is entitled to participate
22
in the IUOE General Convention through democratically nominated and elected
23
delegates. In the case of Local 501, the membership of Local 501 has paid many
24
millions of dollars in per capita contributions to IUOE (approximately $100,000 per
25
month) which conferred the right to participate in the General Convention on Local
26
501’s members.
27
206.
28
On Tuesday, January 15, 2013, IUOE Local 501 held the District 1
meeting at 2405 W. 3rd Street, Los Angeles CA 90057. Over 20 members were in
Page 60
1
attendance. At the beginning of the meeting President Ken Capehart advised the
2
members that there would be “No Special Order of Business.” At that time,
3
Member Patrick Adams raised his hand and asked if the nominations for the
4
General Convention Election were supposed to take place that evening, following a
5
motion made at the December 2012 Semi-Annual General Membership Meeting of
6
Local 501. President Capehart informed the membership that the motion was ruled
7
“out of order” by the Executive Board, and further stated that the Executive Board
8
had voted to cancel the election due to budgetary concerns.
Spiro Moore llp
9
207.
At that time, Plaintiff Finn Pette, also in attendance, raised his hand
10
and informed President Capehart that he could not cancel the election, stating that it
11
was a protected act under the National Labor Relations Act. President Capehart
12
disagreed, claiming that he could cancel the election and asserting that the decision
13
was authorized in the By-Laws and Constitution. Mr. Pette had with him the
14
Department of Labor’s “Election of Officers of Labor Organizations” booklet,
15
discussing 29 CFR Chapter IV, Subchapter A, Part 452. Mr. Pette proceeded to
16
read Section 452.22, entitled “Delegates To A Convention”:
17
Under certain circumstances, delegates to a convention of a national
18
or international labor organization, or an intermediate body, must be
19
elected by secret ballot among the members in good standing of the
20
labor organization they represent even though the delegates are not
21
“officers” of the organization. Such election is required by the Act.
22
23
Again, President Capehart said, “I disagree.”
208.
A heated discussion then occurred. Mr. Pette again read from the
24
Department of Labor’s booklet, at Subpart G, entitled “Campaign Safeguards.”
25
Mr. Pette read aloud from Section 452.66, entitled “Statutory provisions”:
26
The opportunity for members to have a free, fair, and informed
27
expression of their choices among candidates seeking union office is a
28
prime objective of title IV of the Act. Voters can best be assured
Page 61
1
opportunity for an informed choice if certain campaign rights are
2
guaranteed to candidates and their supporters. To this end, the statute
3
provides that adequate safeguards to insure a fair election shall be
4
provided, and states certain specific safeguards. These safeguards
5
apply not only to candidates for officer positions as defined in the Act
6
but also to candidates for delegate posts, if the delegates are to
7
nominate or elect officers.
8
209.
Spiro Moore llp
9
Mr. Pette followed this section with a reading from Section 452.99,
entitled “Notice of Election”:
10
Elections required by title IV to be held by secret ballot must be
11
preceded by a notice of election mailed to each member at his last
12
known home address not less than fifteen days prior to the election.
13
The members then challenged President Capehart with the question of sending out
14
notification, to which he responded, “The By-Laws give the Executive Board the
15
power to overturn the election. We decided it would cost too much.” Again, a
16
heated debate followed. Mr. Pette asked Mr. Capehart to provide a copy of the By-
17
Laws and Constitution and he refused. Member Patrick Adams had a Constitution
18
and copy of the Local By-Laws with him and Mr. Pette asked to see them.
19
210.
Upon finding the relevant passages, Mr. Pette again addressed
20
President Capehart. Mr. Pette asked if he would acknowledge that the Constitution
21
Mr. Pette held was the governing document of rules for the Union. Mr. Capehart
22
stated that it was the correct Constitution. Mr. Pette proceeded to read sections of
23
Article III section 3, entitled “Composition of Convention,” at paragraph 2:
24
The election of delegates shall be conducted by secret ballot. In order
25
to be eligible to be a candidate for delegate, a member must, at the
26
time of nomination, be in good standing with respect to payment of
27
dues and meet the requirements contained in the second paragraph of
28
Article XXIV, Subdivision 1, section (b). In addition, Local Unions
Page 62
1
may impose in their bylaws a requirement that candidates for delegate
2
must file nominating petitions in support of their candidacies signed by
3
not more than two-hundred (200) members or two percent (2%) of the
4
entire membership, whichever is less. Adequate safeguards to insure a
5
fair election shall be provided by the Local Union in accordance with
6
International Constitution, applicable law, and such rules and
7
regulations as may be promulgated by the General executive Board.
8
After reading this passage from the IUOE Constitution out loud to President
9
Capehart, Mr. Petter again asked, “Where does that say you have the right to stop
10
Spiro Moore llp
11
the election?” Mr. Capehart again said,” I disagree”.
211.
At that time a very heated discussion took place. The membership was
12
extremely angry and were told that if they didn’t like it to “file a complaint.” Mr.
13
Pette pointed out that the complaint process of the IUOE Constitution would take
14
so long that the election would be a moot point. President Capehart simply smiled
15
at Mr. Pette in response.
16
17
18
V.
212.
CLASS ACTION ALLEGATIONS
Plaintiffs bring this action individually, as well as on behalf of each
19
and all other persons similarly situated in a concerted effort to improve wages and
20
working conditions for other, similarly situated employees, and thus, seek class
21
certification under Fed. R. Civ. Proc. 23.
The proposed Class consists of and is defined as:
22
213.
23
26
All individuals that are or have been members of the International
Union of Operating Engineers Local 501 at any time within the four
years prior to the filing of this action. Excluded from the Class are all
Defendants in this action; Class Counsel and their employees and
members; all persons within the third degree of relationship to any of
the excluded individuals and any judge who hears or decides any
matter in this litigation.
27
214.
24
25
28
Plaintiffs reserve the right to establish sub-classes, or modify any Class
or sub-Class definition, as appropriate.
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1
215.
At all material times, Plaintiffs were or are members of the Class.
2
216.
There is a well-defined community of interest in the litigation and the
3
class is readily ascertainable:
4
(a)
5
any) are so numerous that joinder of all members would be
6
unfeasible and impractical. The membership of the entire class
7
is unknown to Plaintiffs at this time, however, the class is
8
estimated to be greater than 5,000 individuals and the identity of
9
such membership is readily ascertainable by inspection of
Defendants’ records.
10
11
Spiro Moore llp
Numerosity: The members of the class (and each subclass, if
(b)
Typicality: Plaintiffs are qualified to, and will, fairly and
12
adequately protect the interests of each class member with
13
whom there is a shared, well-defined community of interest.
14
Plaintiffs’ claims are typical of all class members’ claims. For
15
example, Plaintiffs were members of Local 501 within the class
16
period, like all other Class members, and Plaintiffs were injured
17
by manipulation of Local 501 through racketeering activity as all
18
other Class members were.
19
(c)
Adequacy: Plaintiffs are qualified to, and will, fairly and
20
adequately protect the interests of each class member with
21
whom there is a shared, well-defined community of interest and
22
typicality of claims, as demonstrated herein. Plaintiffs
23
acknowledge that Plaintiffs have an obligation to make known to
24
the Court any relationship, conflicts or differences with any
25
class member. Plaintiffs’ attorneys, the proposed class counsel,
26
are versed in the rules governing class action discovery,
27
certification, and settlement.
28
(d)
Superiority: A Class Action is superior to other available
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1
methods for the fair and efficient adjudication of the
2
controversy, including consideration of:
3
1)
controlling the prosecution or defense of separate actions;
4
2)
5
The extent and nature of any litigation concerning the
6
controversy already commenced by or against members of
7
the class;
3)
8
The desirability or undesirability of concentrating the
litigation of the claims in the particular forum; and
9
4)
10
The difficulties likely to be encountered in the
management of a class action.
11
(e)
12
Spiro Moore llp
The interests of the members of the class in individually
Public Policy Considerations: Labor organizations are intended
13
to protect employees from the potential for employer abuse of
14
power, but when the parent union conspires with employers, a
15
local union is powerless to protect itself from abuses originating
16
from multiple directions. Current union members are often
17
afraid to assert their rights out of fear of direct or indirect
18
retaliation. Former union members know the reputation of large
19
labor organizations as violent and dangerous when challenged.
20
Class actions provide the class members who are not named in
21
the complaint with a type of anonymity that allows for the
22
vindication of their rights at the same time as their privacy and
23
safety is protected.
24
217.
There are common questions of law and fact as to the class (and each
25
subclass, if any) that predominate over questions affecting only individual
26
members, including but not limited to:
27
(a)
Whether Defendants engaged in racketeering;
28
(b)
Whether Defendants violated the LMRDA;
Page 65
(c)
1
racketeering;
2
(d)
3
(e)
5
9
218.
This Court should permit this action to be maintained as a class action
pursuant to Fed. R. Civ. P. 23 because:
(a)
Spiro Moore llp
The questions of law and fact common to the class predominate
over any question affecting only individual members;
10
11
The appropriate amount of damages, restitution, or monetary
penalties resulting from Defendants’ violations of law.
6
8
Whether Defendants breached fiduciary obligations to the Class;
and,
4
7
Whether Defendants unlawfully conspired to engage in
(b)
A class action is superior to any other available method for the
12
fair and efficient adjudication of the claims of the members of
13
the class;
14
(c)
to bring all members of the class before the Court;
15
16
The members of the class are so numerous that it is impractical
(d)
Plaintiff, and the other members of the class, will not be able to
17
obtain effective and economic legal redress unless the action is
18
maintained as a class action;
19
(e)
There is a community of interest in obtaining appropriate legal
20
and equitable relief for the statutory violations, and in obtaining
21
adequate compensation for the damages and injuries for which
22
Defendants are responsible in an amount sufficient to adequately
23
compensate the members of the class for the injuries sustained;
24
(f)
Without class certification, the prosecution of separate actions
25
by individual members of the class would create a risk of:
26
1)
Inconsistent or varying adjudications with respect to
27
individual members of the class which would establish
28
incompatible standards of conduct for Defendants; and/or
Page 66
2)
1
2
which would, as a practical matter, be dispositive of the
3
interests of other members not parties to the adjudications,
4
or would substantially impair or impede their ability to
5
protect their interests, including but not limited to the
6
potential for exhausting the funds available from those
7
parties who are, or may be, responsible Defendants; and,
(g)
8
appropriate with respect to the class as a whole.
10
11
Defendants have acted or refused to act on grounds generally
applicable to the class, thereby making final injunctive relief
9
Spiro Moore llp
Adjudications with respect to the individual members
219.
Plaintiffs contemplate the eventual issuance of notice to the proposed
12
members of the class that would set forth the subject and nature of the instant
13
action. The Defendants’ own business records may be utilized for assistance in the
14
preparation and issuance of the contemplated notices. To the extent that any
15
further notices may be required, Plaintiff would contemplate the use of additional
16
mailings.
17
18
VI.
CLAIMS FOR RELIEF
19
20
FIRST CLAIM FOR RELIEF
21
(Violation of 18 U.S.C. § 1962(c) of the Racketeer Influenced and Corrupt
22
Organizations Act [18 U.S.C. §§ 1961-68])
23
By Plaintiffs against All Defendants
Plaintiffs re-allege, and incorporate by reference, each and every
24
220.
25
paragraph herein.
26
221.
27
section 1961(3).
Defendants are each a “person” as that term is defined by 18 U.S.C.
28
Page 67
1
2
3
4
5
6
Spiro Moore llp
7
222.
Local 501 constitutes an enterprise as that term is defined by 18 U.S.C.
§ 1961(4) (hereinafter known as the “Local 501 ENTERPRISE”).
223.
The LOCAL 501 ENTERPRISE is engaged in, and its activities affect,
interstate and foreign commerce.
224.
The DEFENDANTS are, and at all relevant times were, associated
with the LOCAL 501 ENTERPRISE.
225.
As described herein, the DEFENDANTS, beginning at least as early as
8
2005, and continuing to the present, knowingly and willfully set into motion an
9
over-arching scheme to defraud the LOCAL 501 ENTERPRISE out of revenues,
10
cost savings, and membership. The primary goal in all instances was the unlawful
11
enrichment of the DEFENDANTS through activities of the LOCAL 501
12
ENTERPRISE. Numerous kickback schemes enabled employers to avoid
13
contractual obligations while providing bribes to Defendants. To accomplish the
14
over-arching goal of fraudulent and unlawful enrichment, the DEFENDANTS
15
engaged in and/or authorized a variety of unlawful activities, including the use of
16
threats of economic harm and violence to seize control of Local 501 and prevent
17
discovery of the many asset diversion and kickback schemes enriching the
18
leadership of the IUOE.
19
226.
Rights guaranteed under the LMRDA are protectable property interests
20
held by Plaintiffs and other Class members. Plaintiffs’ and Class members’ rights
21
under the LMRDA are extortable in violation of the Hobbs Act.
22
227.
Assets intended to benefit Plaintiffs and Class members when
23
deposited into trust account, including the Health & Welfare Fund and others,
24
represent tangible assets subject to conversion in violation of the Hobbs Act.
25
228.
Plaintiff and Class members were and are aware of ties between the
26
leadership of IUOE and organized crime syndicates in New York and New Jersey.
27
As a result of that awareness, threats of economic and physical harm directed at the
28
Page 68
1
Plaintiffs and other Class members were viewed as highly credible and elicited
2
substantial fear and concern amongst Plaintiffs and other Class members.
Spiro Moore llp
3
229.
Beginning at least as early as 2005 and continuing to the present, the
4
DEFENDANTS, in furtherance of and for the purpose of executing the schemes
5
and artifices to defraud and divert Local 501 resources described herein, on
6
numerous occasions engaged in the extortion of rights guaranteed to Plaintiffs and
7
other Class members under the LMRDA and other laws. Each such extortionate
8
activity in connection with the described schemes and artifices to defraud and
9
divert Local 501 resources constitutes a distinct violation of the Hobbs Act, 18
10
U.S.C. § 1951, and further constitutes racketeering activity as that term is defined
11
in 18 U.S.C. § 1961(1)(b). The unlawful extortion of property and rights secured
12
under the LMRDA and other laws include, but is not limited to, the following acts
13
whereby the DEFENDANTS:
(a)
14
Obtained the voting rights of Plaintiffs and other Class members
15
by utilizing threats of economic and physical harm to control the
16
winners of elections at Local 501;
(b)
17
Obtained assets belonging rightfully to Plaintiffs and other Class
18
members by utilizing threats of economic and physical harm to
19
control Local 501’s ability to investigate asset diversions.
20
230.
21
22
and artifices to defraud described herein, on numerous occasions used and caused
23
to be used the United States Mails and other commercial interstate carriers by both
24
placing and causing to be placed letters and other mailable matter in the authorized
25
depositories of such carriers and receiving and causing to be received letters and
26
other matter from such carriers. Each such use of the United States mails and other
27
carriers in connection with the described schemes and artifices to defraud
28
constitutes a separate and distinct violation of 18 U.S.C. § 1341, relating to mail
Page 69
1
fraud, and further constitutes racketeering activity as that term is defined in 18
2
U.S.C. § 1961(1)(b). The unlawful use of the mails includes, but is not limited to,
3
the following:
(a)
4
5
been placed under “monitorship,” by the International when no
6
such status existed under the IUOE Constitution;
(b)
7
Fraudulent charges of malfeasance targeted at Finn Pette and
8
Dan Himmelberg for the purpose of interfering with their ability
9
to run for officer positions at Local 501.
10
11
12
Spiro Moore llp
Fraudulent mailing from IUOE indicating that Local 501 had
231.
By issuing threats of murder, as described above, Defendants engaged
in racketeering activity as defined by 18 U.S.C. § 1961(1)(A).
232.
13
14
and artifices to defraud described herein, on numerous occasions used and caused
15
to be used wire communications in interstate and foreign commerce by both
16
making and causing to be made wire communications. Each such use of a wire
17
communication in connection with the described schemes and artifices to defraud
18
constitutes a separate and distinct violation of 18 U.S.C. § 1343, relating to wire
19
fraud, and further constitutes racketeering activity as that term is defined in 18
20
U.S.C. § 1961(1)(B). The unlawful use of wire communications includes, but is
21
not limited to, the following:
22
(a)
Calls from Giblin to Bob Fox, threatening the life of
23
McLaughlin, Pette and Himmelberg, in violation of 18 U.S.C. §
24
1961(1)(A), if they did not stop investigating Lundy;
25
(b)
Calls from Giblin to McLaughlin, demanding his resignation;
26
(c)
Threats, communicated from Giblin through IUOE counsel to
27
McLaughlin and Local 501 counsel, stating the Himmelberg,
28
Page 70
1
who had Parkinson’s disease, would be fired if Pette was not
2
terminated;
(d)
3
4
herein, and at times known exclusively by Defendants, of
5
fraudulently obtained kickback payments from ABM and Abel.
6
Spiro Moore llp
Acceptance via wire, on occasions too numerous to identify
233.
7
8
and artifices to defraud described herein, on numerous occasions knowingly
9
engaged in and caused to occur monetary transactions in criminally derived
10
property with value in excess of $10,000. The transactions were accomplished by
11
depositing, withdrawing or transferring funds by, through, or to a financial
12
institution, as such an institution is defined by 18 U.S.C. § 1956. Funds used in
13
such transactions were derived from offenses listed in 18 U.S.C. § 1961(1),
14
including, but not limited to, funds derived from mail fraud, in violation 18 U.S.C.
15
§ 1341, and wire fraud, in violation of 18 U.S.C. § 1343. Each such monetary
16
transaction in connection with the described schemes and artifices to defraud
17
constitutes a separate and distinct violation of 18 U.S.C. § 1957, relating to
18
unlawful monetary transactions and money laundering, and further constitutes
19
racketeering activity as that term is defined in 18 U.S.C. § 1961(1)(b). The
20
unlawful monetary transactions include, but are not limited to, the following:
21
(a)
IUOE from ABM, at times known exclusively to Defendants;
22
23
(b)
Acceptance of payments by Giblin and his co-conspirators at
IUOE from Able, at times known exclusively to Defendants;
24
25
(c)
Deposits by Lundy, at times known exclusively to him, of
26
monies embezzled from the JAC fund, including monies
27
obtained via the issuance of sham BOMA credentials to
28
members at other local unions.
Page 71
Spiro Moore llp
1
234.
Beginning as least as early as 2005, and continuing to the present, the
2
3
and artifices to defraud described herein, on numerous occasions knowingly
4
traveled in interstate commerce and used facilities of interstate commerce
5
(including, but not limited to, the mails) with the intent to promote, manage,
6
establish, carry on, or facilitate the promotion, management, establishment or
7
carrying on of unlawful activities (including violations of 18 U.S.C. § 1957), and
8
thereafter performed or attempted to perform such violations. Each such
9
interaction with facilities of interstate commerce in connection with the described
10
schemes and artifices to defraud constitutes a separate and distinct violation of 18
11
U.S.C. section 1952 (the “Travel Act”), relating to travel in interstate commerce
12
with intent to facilitate certain unlawful activities, and further constitutes
13
racketeering activity as that term is defined in 18 U.S.C. § 1961(1)(B). These
14
violations included habitual interstate travel by the DEFENDANTS to and from
15
Local 501 for the purpose of delivering threats to ensure that schemes for
16
fraudulent profiteering could continue unabated.
17
235.
The DEFENDANTS’ repeated violations of 18 U.S.C. §§ 1341, 1343,
18
1951, 1952 and 1957 extended over a period of years and involved distinct and
19
independent criminal acts. Those criminal acts were neither isolated or sporadic
20
events, but involved the regular and repeated violation as a way of doing business
21
and to accomplish the DEFENDANTS’ desired ends in the course of the continuing
22
business of the LOCAL 501 ENTERPRISE. These predicate acts were related to
23
each other by virtue of (a) common participants, (b) similarly situated victims, (c)
24
common methods of commission through the habitual dissemination of fraudulent
25
and misleading information, and (d) the common purpose and common result
26
defrauding and looting the LOCAL 501 ENTERPRISE, all while enriching the
27
DEFENDANTS. As such, this conduct constitutes a pattern of racketeering
28
activity within the meaning of 18 U.S.C. § 1961(5).
Page 72
1
The fraudulent, unlawful and improper activities of the
2
DEFENDANTS threatens to continue. Based upon the past pattern of activity,
3
other Local Unions either have or will likely be defrauded by the DEFENDANTS.
4
Based upon the past pattern of activity, the DEFENDANTS will likely continue to
5
defraud Local Unions like Local 501. Furthermore, the DEFENDANTS are able,
6
based upon their managerial and controlling positions, to replace management in
7
Local Unions, which could thereafter be defrauded and looted without consequence
8
in a manner similar to the schemes and artifices outlined herein.
9
237.
The DEFENDANTS all violated or aided violation of 18 U.S.C. §
10
1962(c) by directly or indirectly conducting or participating in the conduct of the
11
affairs of the LOCAL 501 ENTERPRISE through a pattern of racketeering activity.
12
Spiro Moore llp
236.
238.
The DEFENDANTS’ violation of 18 U.S.C. § 1962(c) caused the
13
Plaintiffs and the Class to suffer direct injury in amounts as may be shown
14
according to proof at time of trial.
15
16
SECOND CLAIM FOR RELIEF
17
(Violation of 18 U.S.C. § 1962(d) of the Racketeer Influenced and Corrupt
18
19
20
239.
21
paragraph herein.
22
240.
23
section 1961(3).
24
241.
25
26
27
Defendants are each a “person” as that term is defined by 18 U.S.C.
242.
The LOCAL 501 ENTERPRISE is engaged in, and its activities affect,
28
Page 73
Spiro Moore llp
1
243.
From at least 1994 and continuing through to the present, Defendants,
2
being persons employed by or associated with the LOCAL 501 ENTERPRISE at
3
all relevant times herein, unlawfully and willfully combined, conspired,
4
confederated and agreed each with the other to violate 18 U.S.C. § 1962(c), that is,
5
to conduct and participate, directly and indirectly, in the conduct of the affairs of
6
the LOCAL 501 ENTERPRISE through a pattern of racketeering activity, all in
7
violation of 18 U.S.C. § 1962(d). The times and locations and forms of such
8
agreements constitute information uniquely within the control of the
9
DEFENDANTS.
10
244.
As part of this conspiracy, the DEFENDANTS each personally plotted,
11
conspired and agreed to commit two or more fraudulent and illegal racketeering
12
acts and thereby conducted and agreed to conduct the affairs of the LOCAL 501
13
ENTERPRISE through the pattern of racketeering activity in violation of 18 U.S.C.
14
§ 1962(c) described generally herein and specifically in the First Claim for Relief.
15
245.
In furtherance of the conspiracy and to effect the objects thereof, the
16
DEFENDANTS committed and caused to be committed a series of overt acts,
17
including, but not limited to, the following:
18
(a)
Habitual interstate travels by the Defendants to and from Local
19
501, for the purpose of delivering threats to Plaintiffs and
20
ensuring that Defendants asset diversion and kickback schemes
21
continued unabated and unchallenged;
22
(b)
23
24
25
(c)
26
27
control Local 501’s ability to investigate asset diversions;
28
Page 74
1
Fraudulent mailing from the IUOE indicating that Local 501 had
2
been placed under “monitorship,” when no such status existed
3
under the IUOE Constitution;
4
(e)
5
6
7
(f)
Calls from Giblin to Bob Fox, threatening the lives of Mssrs.
8
McLaughlin, Pette and Himmelberg if they did not stop
9
investigating Lundy;
10
Spiro Moore llp
(d)
(g)
Calls from Giblin to McLaughlin, threatening economic harm if
11
investigation into Lundy did not cease and failing this, calling
12
and demanding his resignation;
13
(h)
Threats, communicated from Giblin through IUOE general
14
counsel Griffin to McLaughlin and Local 501 counsel, stating
15
the Himmelberg, who had Parkinson’s disease, would be fired if
16
Pette was not terminated;
17
(i)
18
19
20
(j)
Numerous other fraudulent monetary transactions on amounts
21
exceeding $10,000 to accounts and at times known exclusively
22
to Defendants, but believed by Plaintiffs to consist of a
23
widespread and regular pattern of unlawful financial transactions
24
conducted, in part, to weaken Local 501 so as to facilitate
25
Defendants’ takeover scheme;
26
(k)
Calls to McLaughlin demanding Pette cease all efforts to
27
investigate double breasting issues involving Able and ABM
28
and failing this, eventually demanding termination of Pette; and,
Page 75
(l)
1
Upon information and belief, similar violations constituting
2
predicate acts were perpetrated upon other local union chapters
3
around the country.
4
246.
The Defendants’ violation of 18 U.S.C. § 1962(d) caused the Plaintiffs
5
and the Class to suffer direct injury in amounts as may be shown according to proof
6
at time of trial.
Spiro Moore llp
7
8
THIRD CLAIM FOR RELIEF
9
(Violations of 18 U.S.C. § 1962(b) of the Racketeer Influenced and Corrupt
10
11
12
247.
13
paragraph herein.
14
248.
15
16
17
18
19
20
Each and every Defendant named herein is a “person” as that term is
defined by 18 U.S.C. section 1961(3).
249.
250.
The Local 501 ENTERPRISE is engaged in, and its activities affect,
251.
Rights guaranteed under the LMRDA are protectable property interests
21
held by Plaintiffs and other Class members. Plaintiffs’ and Class members’ rights
22
under the LMRDA are extortable in violation of the Hobbs Act.
23
252.
Assets intended to benefit Plaintiffs and Class members when
24
deposited into trust account, including the Health & Welfare Fund and others,
25
represent tangible assets subject to conversion in violation of the Hobbs Act.
26
253.
Plaintiff and Class members were and are aware of ties between
27
leadership of IUOE and organized crime syndicates in New York and New Jersey.
28
As a result of that awareness, threats of economic and physical harm directed at
Page 76
1
Plaintiffs and other Class members were viewed as highly credible and elicited
2
substantial fear and concern amongst Plaintiffs and other Class members.
Spiro Moore llp
3
254.
4
5
and artifices to defraud and divert Local 501 resources described herein, on
6
numerous occasions engaged in the extortion of rights guaranteed to Plaintiffs and
7
other Class members under the LMRDA and other laws. Each such extortionate
8
activity in connection with the described schemes and artifices to defraud and
9
divert Local 501 resources constitutes a distinct violation of the Hobbs Act, 18
10
U.S.C. § 1951, and further constitutes racketeering activity as that term is defined
11
in 18 U.S.C. § 1961(1)(b). The unlawful extortion of property and rights secured
12
under the LMRDA and other laws include, but is not limited to, the following acts
13
by the DEFENDANTS:
(a)
14
15
16
(b)
17
18
19
(c)
20
Obstructed internal investigations into the local 501 various
21
funds including the joint apprenticeship training program to the
22
financial detriment of local 501 and to the financial benefit of
23
Able and ABM.
24
255.
Beginning at least as early as 2007, and continuing to the present, the
25
Defendants, in furtherance of and for the purpose of executing the schemes and
26
artifices to defraud and seize control of Local Unions, including the Local 501
27
ENTERPRISE, on numerous occasions used and caused to be used mail
28
depositories of the United States Mails and other commercial interstate carriers by
Page 77
1
both placing and causing to be placed letters and other mailable matter in the
2
authorized depositories of such carriers and receiving and causing to be received
3
letters and other matter from such carriers. Each such use of the United States
4
Mails and other carriers in connection with the described schemes and artifices to
5
defraud constitutes a separate and distinct violation of 18 U.S.C. § 1341, relating to
6
mail fraud, and further constitutes racketeering activity as that term is defined in 18
7
U.S.C. § 1961(1)(b). The unlawful use of the mails includes, but is not limited to,
8
the following:
(a)
9
10
11
(b)
12
Spiro Moore llp
13
14
15
256.
Beginning at least as early as 2007, and continuing to the present, the
16
17
18
ENTERPRISE, on numerous occasions used and caused to be used wire
19
communications in interstate and foreign commerce by both making and causing to
20
be made wire communications. Each such use of a wire communication in
21
connection with the described schemes and artifices to defraud constitutes a
22
separate and distinct violation of 18 U.S.C. § 1343, relating to wire fraud, and
23
further constitutes racketeering activity as that term is defined in 18 U.S.C. §
24
1961(1)(b). The unlawful use of wire communications includes, but is not limited
25
to, the following:
26
(a)
27
McLaughlin, Pette and Himmelberg, in violation of 18 U.S.C. §
28
1961(1)(A), if they did not stop investigating Lundy;
Page 78
1
(b)
2
(c)
3
4
5
terminated;
(d)
6
7
8
9
Spiro Moore llp
257.
10
11
12
ENTERPRISE, on numerous occasions knowingly engaged in and caused to occur
13
monetary transactions in criminally derived property with value in excess of
14
$10,000. The transactions were accomplished by depositing, withdrawing or
15
transferring funds by, through, or to a financial institution, as such an institution is
16
defined by 18 U.S.C. § 1956. Funds used in such transactions were derived from
17
offenses listed in 18 U.S.C. § 1961(1), including, but not limited to, funds derived
18
from mail fraud, in violation 18 U.S.C. § 1341, and wire fraud, in violation of 18
19
U.S.C. § 1343. Each such monetary transaction in connection with the described
20
schemes and artifices to defraud constitutes a separate and distinct violation of 18
21
U.S.C. § 1957, relating to unlawful monetary transactions and money laundering,
22
and further constitutes racketeering activity as that term is defined in 18 U.S.C. §
23
1961(1)(b). The unlawful monetary transactions include, but are not limited to, the
24
following:
25
(a)
IUOE from ABM, at times known exclusively to Defendants;
26
27
28
(b)
IUOE from Able, at times known exclusively to Defendants;
Page 79
(c)
1
2
monies embezzled from the JAC fund, including monies
3
obtained via the issuance of sham BOMA credentials to
4
members at other local unions.
5
Spiro Moore llp
Deposits by Lundy, at times known exclusively to him, of
258.
Beginning as least as early as 1997, and continuing to the present, the
6
7
8
ENTERPRISE, on numerous occasions knowingly traveled in interstate commerce
9
and used facilities of interstate commerce (including, but not limited to, the mails)
10
with the intent to promote, manage, establish, carry on, or facilitate the promotion,
11
management, establishment or carrying on of unlawful activities (including
12
violations of 18 U.S.C. § 1957), and thereafter performed or attempted to perform
13
such violations. Each such interaction with facilities of interstate commerce in
14
connection with the described schemes and artifices to defraud constitutes a
15
separate and distinct violation of 18 U.S.C. § 1952 (the “Travel Act”), relating to
16
travel in interstate commerce with intent to facilitate certain unlawful activities, and
17
further constitutes racketeering activity as that term is defined in 18 U.S.C. §
18
1961(1)(b). These violations included habitual interstate travels by the Defendants
19
to and from Local 501, for the purpose of delivering threats to Plaintiffs and
20
ensuring that Defendants asset diversion and kickback schemes continued unabated
21
and unchallenged
22
259.
The DEFENDANTS’ repeated violations of 18 U.S.C. §§ 1341, 1343,
23
1951, 1952 and 1957 extended over a period of at least one year and involved
24
distinct and independent criminal acts. Those criminal acts were neither isolated or
25
sporadic events, but involved the regular and repeated violation as a way of doing
26
business and to accomplish the Defendants’ desired ends in the course of pursuing
27
their unlawful scheme to seize control of Local Unions, including the Local 501
28
ENTERPRISE. These predicate acts were related to each other by virtue of (a)
Page 80
1
common participants, (b) similarly situated victims, (c) common methods of
2
commission through the habitual dissemination of fraudulent and misleading
3
information and the dissemination of threats of physical and economic harm to
4
Plaintiffs and other Class members, and (d) the common purpose and common
5
result of unlawfully maintaining control over Local 501, all while enriching the
6
Defendants at the expense of Local 501 members. As such, this conduct constitutes
7
a pattern of racketeering activity within the meaning of 18 U.S.C. § 1961(5).
8
Spiro Moore llp
9
260.
The fraudulent, unlawful and improper activities of the Defendants
threaten to continue. Based upon the past pattern of activity, other existing Local
10
Unions either have or will likely be seized on false pretexts by the Defendants.
11
Based upon the past pattern of activity, the Defendants will likely continue to
12
defraud and deprive members of their membership rights and assets. Furthermore,
13
the Defendants are able to implement the same unlawful schemes in other local
14
unions if not stopped here and now.
15
261.
The Defendants all violated or aided in violation of 18 U.S.C. §
16
1962(b) by acquiring, directly or indirectly, control of the Local 501 ENTERPRISE
17
through a pattern of racketeering activity.
18
262.
Furthermore, Plaintiffs have learned of DEFENDANTS’ plans to
19
merge Local 501 into another California Local Union (IUOE Local 39) as a
20
culmination of a long series of predicate acts all constituting RICO violations on
21
the part of Defendants. The Defendants hope that through this transaction, they
22
will cement their control over Local 501 and, through obfuscation and changed
23
leadership, shield themselves from liability for the wide ranging fraudulent and
24
illegal activities undertaken by Defendants, as set forth herein.
25
263.
The Defendants’ violation of 18 U.S.C. § 1962(b) caused the Plaintiffs
26
27
at time of trial.
28
Page 81
1
FOURTH CLAIM FOR RELIEF
2
(Violations of 18 U.S.C. § 1962(d) of the Racketeer Influenced and Corrupt
3
4
264.
6
paragraph herein.
7
265.
8
9
10
11
12
Spiro Moore llp
5
13
Each and every Defendant named herein is a “person” as that term is
defined by 18 U.S.C. § 1961(3).
266.
267.
The Local 501 ENTERPRISE is engaged in, and its activities affect,
268.
From at least 1994 and continuing through to the present, Defendants
14
unlawfully and willfully combined, conspired, confederated and agreed each with
15
the other to violate 18 U.S.C. § 1962(b), that is, to acquire, directly or indirectly,
16
control of the Local 501 ENTERPRISE through a pattern of racketeering activity,
17
all in violation of 18 U.S.C. § 1962(d). The times and locations and forms of such
18
agreements constitute information uniquely within the control of the Defendants.
19
269.
As part of this conspiracy, the Defendants each personally plotted,
20
conspired and agreed to commit two or more fraudulent and illegal racketeering
21
acts and thereby acquired and agreed to acquire, directly or indirectly, control of
22
the Local 501 ENTERPRISE through a pattern of racketeering activity in violation
23
of 18 U.S.C. § 1962(b) described generally herein and specifically in the Third
24
Claim for Relief.
25
270.
In furtherance of the conspiracy and to effect the objects thereof, the
26
Defendants committed and caused to be committed a series of overt acts, including,
27
but not limited to, the following:
28
Page 82
1
(a)
2
501, for the purpose of delivering threats to Plaintiffs and
3
ensuring that Defendants asset diversion and kickback schemes
4
continued unabated and unchallenged;
5
(b)
6
7
8
(c)
10
11
9
Spiro Moore llp
Habitual interstate travels by the Defendants to and from Local
(d)
12
13
14
(e)
15
16
17
(f)
18
McLaughlin, Pette and Himmelberg if they did not stop
19
investigating Lundy;
20
(g)
21
(h)
22
23
24
terminated;
25
(i)
26
27
28
Page 83
(j)
1
2
exceeding $10,000 to accounts and at times known exclusively
3
to Defendants, but believed by Plaintiffs to consist of a
4
widespread and regular pattern of unlawful financial transactions
5
conducted, in part, to weaken Local 501 so as to facilitate
6
Defendants’ takeover scheme; and,
(k)
7
Upon information and belief, similar violations constituting
8
predicate acts were perpetrated upon other local union chapters
9
around the country.
10
Spiro Moore llp
Numerous other fraudulent monetary transactions on amounts
271.
The Defendants’ violation of 18 U.S.C. § 1962(d) caused the Plaintiffs
11
12
at time of trial.
13
14
FIFTH CLAIM FOR RELIEF
15
(Violation of Bill of Rights Secured by Labor Management Disclosure Act, 29
16
U.S.C. § 501)
17
18
272.
19
paragraph herein.
20
273.
Jurisdiction is conferred on this Court pursuant to 29 U.S.C. § 412.
21
274.
Violations of the Labor Management Disclosure Act, Title I (Bill of
22
Rights), occurred within the Central District of California where Local 501 is
23
headquartered. As such, venue is proper in this District pursuant to 29 U.S.C. §
24
412.
25
275.
Violations of the Labor Management Disclosure Act, Title IV
26
(Elections), occurred within the Central District of California where Local 501 is
27
headquartered. As such, venue is proper in this District pursuant to 29 U.S.C. §
28
412.
Page 84
1
2
3
4
5
6
Plaintiffs are members of the International Union of Operating
Engineers, in the Local 501 Chapter of that labor union.
277.
Defendant IUOE is a labor organization as defined in 29 U.S.C. §
402(i).
278.
Defendants, described above, are officials of IUOE or agents of IUOE
or both.
Section 411 of the LMRDA, 29 U.S.C. § 411, provides in part:
7
279.
8
(a)(1) Equal rights
9
Every member of a labor organization shall have equal rights and
privileges within such organization to nominate candidates, to vote in
elections or referendums of the labor organization, to attend
membership meetings, and to participate in the deliberations and
voting upon the business of such meetings, subject to reasonable rules
and regulations in such organization's constitution and bylaws.
10
11
12
Spiro Moore llp
276.
13
(2) Freedom of speech and assembly
19
Every member of any labor organization shall have the right to meet
and assemble freely with other members; and to express any views,
arguments, or opinions; and to express at meetings of the labor
organization his views, upon candidates in an election of the labor
organization or upon any business properly before the meeting, subject
to the organization's established and reasonable rules pertaining to the
conduct of meetings: Provided, That nothing herein shall be construed
to impair the right of a labor organization to adopt and enforce
reasonable rules as to the responsibility of every member toward the
organization as an institution and to his refraining from conduct that
would interfere with its performance of its legal or contractual
obligations.
20
29 U.S.C. § 411(a)(1) and (2). Defendants, through their schemes to usurp control
21
of Local 501 described above, deprived Plaintiffs of their right to honest, open, fair
22
and free elections to determine the leadership of Local 501.
14
15
16
17
18
23
280.
Defendants denied union members in good standing, including
24
Plaintiffs and the Class, the right to be candidates for and to hold union office, by
25
imposing unreasonable meeting attendance qualifications, in violation of section
26
401(e) of the Act, 29 U.S.C.A. § 481(e).
27
28
281.
Defendants denied union members in good standing, including
Plaintiffs and the Class, a reasonable opportunity to nominate candidates by
Page 85
1
imposing unreasonable qualifications on candidacy, in violation of section 401(e)
2
of the Act, 29 U.S.C.A. § 481(e).
3
As a result of threats of physical and economic violence, demonstrated
4
as credible through the forced terminations of Local 501 employee-members and
5
the forced resignations of duly-elected Local 501 officers (described more fully
6
above), Plaintiffs reasonably concluded that internal procedures were futile and that
7
IUOE and its leadership would not permit a democratic process to proceed in order
8
to protect their vested interests in receiving tens of millions of dollars in unlawful
9
kickback payments and other personal favors from ABM and Able.
10
11
12
Spiro Moore llp
282.
13
14
283.
The Department of Labor has determined that Local 501’s last election
process violated members’ rights under the LMRDA.
284.
The violations of the LMRDA by the identified Defendants is current
and ongoing in nature.
285.
Plaintiffs seek equitable orders restraining: (1) IUOE and its leadership
15
from interfering in the operation of Local 501; (2) precluding IUOE from merging
16
Local 501 into any other local union chapter to eliminate members’ recourse
17
against IUOE and Local 501, and; (3) requiring the immediate institution of a valid
18
leadership election. Plaintiffs also seek a judgment directing the conduct of a new
19
election under the supervision of the Secretary of Labor. Plaintiffs also request
20
punitive damages for Defendants’ malicious violations of their LMRDA rights.
21
22
SIXTH CLAIM FOR RELIEF
23
BREACHES OF FIDUCIARY DUTIES ARISING UNDER ERISA OR
24
COMMON LAW
25
By Plaintiffs Against Specific Defendants
26
286.
27
paragraph herein.
28
Page 86
1
ERISA § 502(a)(2), 29 U.S.C.A. § 1132(a)(2), authorizes a plan
2
participant or beneficiary to bring a civil action for appropriate relief under ERISA
3
§ 409, 29 U.S.C.A. § 1109. Section 409 requires “any person who is a fiduciary …
4
who breaches any of the … duties imposed upon fiduciaries … to make good to
5
such plan any losses to the plan …” Section 409 also authorizes “such other
6
equitable or remedial relief as the court may deem appropriate …”
7
288.
Plaintiffs and Class Members are or were at relevant times participants
8
and/or beneficiaries in the ERISA-governed plans alleged herein and associated
9
with Local 12, including, but not limited to, the General Pension Fund, the Health
10
11
Spiro Moore llp
287.
& Welfare Fund, and the Operating Engineers Training Trusts, among others.
289.
Defendants identified herein as Administrators and/or Trustees and/or
12
IUOE Executives and/or Local Executives have assumed fiduciary obligations to
13
Plaintiffs and Class Members.
14
290.
According to the terms of the plans identified, participants such as the
15
Plaintiffs have a right to periodically direct the plans, by and through the plans’
16
delegated administrators and trustees, as to how the participants want his or her
17
monies directed.
18
291.
19
20
Plaintiffs are not requires to exhaust administrative remedies
pertaining to breaches of fiduciary duty claims arising under ERISA.
292.
As a direct result of the activities alleged herein, the plans have lost
21
monies, or engaged in activities that a prudent investor would not engage in and
22
suffered losses as a result, in amounts not presently known with precision but
23
exceeding $25 million.
24
293.
Plaintiffs request equitable and declaratory relief, including order
25
requiring Defendants or their bonding agents or insurers to “make whole” the
26
ERISA-governed plans misused by Defendants.
27
28
Page 87
1
SEVENTH CLAIM FOR RELIEF
2
AIDING AND ABETTING
3
By Plaintiffs Against All Defendants
294.
5
paragraph herein.
6
295.
As described above, Defendants engaged in a pattern of oppression
7
intended to restrict Local 501’s ability to discover or contest numerous asset
8
diversion schemes put in place by Defendants to enrich themselves at the expense
9
of Local 501 and its members, including Plaintiffs.
10
Spiro Moore llp
4
296.
As described above, Defendants knew that other Defendants were
11
engaged in unlawful conduct intended to restrict Local 501’s ability to discover or
12
contest numerous asset diversion schemes put in place by various Defendants for
13
self-enrichment at the expense of Local 501 and its members, including Plaintiffs.
14
15
16
17
18
297.
As described above, Defendants knew that threats of violence were
issued against Plaintiffs and others.
298.
As described above, Defendants knew that assets were diverted from
or denied to Local 501.
214. As described above, Defendants knew that threats of physical and
19
economic harm directed at Plaintiffs and others were likely to deprive Local 501 of
20
democratically elected leadership. Despite this knowledge, Defendants persisted in
21
their conduct, resulting in the removal of democratically elected officers of Local
22
501 and the imposition of officers completely controlled by IUOE.
23
215. As described above, all Defendants cooperated with the unlawful
24
activities described herein or failed to warn appropriate persons and governmental
25
officials of the unlawful conduct used to divert assets and obtain total control of
26
Local 501.
27
28
217. As a direct and proximate result of Defendants’ aiding and abetting
one another, the Plaintiffs and the Class members have been damaged in an amount
Page 88
1
to be proven at trial. Plaintiffs and the Class Members are also entitled to recover
2
punitive damages in an amount sufficient to punish Defendants and to deter future
3
conduct of this type.
4
5
6
7
PRAYER FOR RELIEF
Plaintiffs, individually, and on behalf of all others similarly situated, pray for
relief and judgment against Defendants, jointly and severally, as follows:
8
Class Certification
Spiro Moore llp
9
10
1.
That this action be certified as a class action;
11
2.
That Plaintiffs be appointed as the representative of the Class; and
12
3.
That counsel for Plaintiffs be appointed as Class Counsel.
13
As to the First Claim for Relief
14
15
4.
For compensatory and general damages, as shown according to proof;
16
5.
For treble damages;
17
6.
For the appointment of a Receiver to operate Defendant IUOE in a
18
lawful manner, to assure the cessation of its illegal acts and to assure the proper
19
handling of income and payments;
20
7.
For an accounting;
21
8.
For temporary and permanent injunctive relief;
22
9.
For disgorgement of monies improperly obtained;
23
10.
For prejudgment interest according to law;
24
11.
For attorney's fees;
25
12.
For costs of suit; and,
26
13.
For such other and further relief as this Court may deem proper.
27
28
Page 89
As to the Second Claim for Relief
Spiro Moore llp
1
2
14.
3
15.
For treble damages;
4
16.
5
6
7
17.
For an accounting;
8
18.
9
19.
10
20.
11
21.
12
22.
13
23.
14
As to the Third Claim for Relief
15
16
24.
17
25.
For treble damages;
18
26.
19
20
21
27.
For an accounting;
22
28.
23
29.
24
30.
25
31.
26
32.
27
33.
28
Page 90
As to the Fourth Claim for Relief
Spiro Moore llp
1
2
34.
3
35.
For treble damages;
4
36.
5
6
7
37.
For an accounting;
8
38.
9
39.
10
40.
11
41.
12
42.
13
43.
14
As to the Fifth Claim for Relief
15
16
44.
17
45.
18
19
20
46.
21
47.
22
As to the Sixth Claim for Relief
23
24
48.
25
49.
For declaratory relief;
26
50.
For appropriate “make whole” equitable relief authorized pursuant to
27
28
ERISA;
51.
For attorney’s fees and costs pursuant to ERISA;
Page 91
1
52.
2
As to the Seventh Claim for Relief
Spiro Moore llp
3
4
53.
5
54.
For exemplary damages;
6
55.
7
8
9
56.
For an accounting;
10
57.
11
58.
12
59.
13
60.
14
61.
15
62.
16
Dated: January 23, 2013
Respectfully submitted,
SPIRO MOORE LLP
17
18
19
20
21
By:
H. Scott Leviant
22
23
24
25
26
27
28
Page 92
1
2
3
DEMAND FOR JURY TRIAL
Plaintiffs demand a trial by jury.
Dated: January 23, 2013
Respectfully submitted,
SPIRO MOORE LLP
4
5
6
7
8
By:
H. Scott Leviant
9
10
11
Spiro Moore llp
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Page 93
EXHIBIT “1”
EXHIBIT “2”
EXHIBIT “3”
Ethics Officer deals with ‘anonymous’ complaints
(When IUOE Ethics Officer James R.
Zazzali appeared before the General Executive Board Feb. 10, 2009, the Board
authorized him to formulate procedures
to deal with the submission of anonymous
submissions re ethics matters. Following is
the complete text of Zazzali’s June 9, 2009
letter to the GEB outlining the problem
and the course of action he is adopting to
deal with the matter.)
RE: Code of Ethics –
Anonymous Complaints
Gentlemen:
In my capacity as the Ethics Officer for
the IUOE, I write to you to set forth the
problems that we have encountered with
anonymous complaints filed by some members with the Ethics Officer pursuant to the
Code of Ethics.
By way of background, the General President and the General Executive Board indicated, when it adopted the Code of Ethics
last year, that it wished to assure members
that they can file complaints and ask questions under the Code with confidence in the
integrity, independence, and confidentiality
of the ethics process. Accordingly, although
we prefer signed complaints, we also have accepted anonymous complaints because there
may be valid reasons why a member seeks to
keep his name confidential.
However, in this first year of experience,
we have discovered that problems occur when
a member files a complaint anonymously.
First, when a member makes allegations
without signing the complaint, there is a significant risk of encouraging baseless claims,
precisely because the person believes that he
or she cannot be identified. Indeed, some international unions will not accept anonymous
complaints. Second, and more important, anonymity impedes both the investigation and
the ultimate recommendation by the Ethics
Officer because he is unable to speak with the
complainant in order to obtain facts, reasons,
proofs, and answers to questions. Anonymity thus works against the complainant’s objectives because we are unable to gather the
background and other data which might sup4
INTERNATIONAL OPERATING ENGINEER
port that claim. We cannot turn to the original source - - the member - - to obtain more
information. This is particularly troublesome
when there is a credibility dispute - - when
the invisible complainant makes a claim and
the union officer denies that claim. The union
officer is then forced to prove a negative. It
is difficult to credit or discredit either party
if we cannot speak with the complainant. In
fact, and this is the irony, at the conclusion
of the inquiry the Ethics Officer cannot even
inform the complainant about the results of
the investigation.
Another complication is that in some
cases it is necessary to hire an investigator
to assist in our review, particularly when the
matter is complex. Because neither the investigator nor the Ethics Officer is able to
communicate with an anonymous complainant to obtain further facts and details, the
investigator must perform additional work.
Often the investigator and I will be performing functions that the complainant should
have performed. Although the expense may
not be that significant in a particular case, in
more complex investigations the costs could
be quite substantial. That is unfair to other
dues-paying members, not to mention the
union officer.
We have to make a choice. We can decide that we will not accept anonymous complaints. Even though that is the practice with
some unions, as noted, I would recommend
against that approach. Rather, we should
continue to accept anonymous complaints
under certain circumstances and subject to
the following conditions.
1. Effective immediately, as a general
rule, the member should sign the
complaint and provide contact information.
2. If the member does not wish to sign
the complaint, the member should
say so, giving the reasons why he or
she will not sign.
3. However, when the member does not
sign, the complainant should identify
some means or method whereby the
Ethics Officer can communicate with
the complainant. If the member de-
clines to state his name and address,
he at least must identify a post office
box, other address, telephone number, and/or some third party such as
an attorney or relative, with whom
the Ethics Officer can communicate.
4. In any event, the Ethics Officer retains the discretion to decide what
to do with anonymous complaints
on a case-by-case basis. The Ethics
Officer has the right to accept or reject the complaint. If he accepts the
anonymous complaint, he may give it
limited weight.
I reiterate that we discourage anonymous
complaints for the reasons discussed above,
particularly the fact that anonymous complaints undercut the member’s claim because
they limit our ability to conduct a proper inquiry. However, subject to the above requirements, we will accept anonymous complaints
in particular circumstances.
Very truly yours,
James R. Zazzali
Ethics Ofﬁcer
Contact info
Those wishing to contact IUOE Ethics Officer
James R. Zazzali can do
so at the following address and/or toll-free
phone number:
James R. Zazzali
IUOE Ethics Officer
One Riverfront Plaza
Box No. 782
Newark, NJ 07102
866-380-3495
EXHIBIT “4”
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II
EXHIBIT “5”
EXHIBIT “6”
EXHIBIT “7”
EXHIBIT “8”
7148711166
p.1
November 19, 2009
J. GIBLIN
VINCENT
GENERAi. f'JIESTDENT
CHRISTO[>HER HANLEY
Mr. Robert H. Fox
506 S. Roosevelt Ave.
Fullerton, CA 92832
Dear Sir and Brother:
In the very near future, I will be announcing to the members of Local 501 a
GENERAL VICI:: /•f/F.SJDJ:'Nn
WILLIAM:
BRIAN
c. WAGGO:-IER
E.
HtCKEY
GARY KROEKER
JOHN
M.
HAMILTON
PATRICK
L.
SINK
JERRY KALMAR
RUSSELL
E.
BURNS
T. CALLAHAN
}AMES
RODGER KAMINSKA
MARK HOLLIDAY
]AMES
M.
Fl<ilSTf:.r::S
M.
As part of the moni1orship, I am instructing the local to conduct its
Executive Board meetings in executive session. The board will call into its
meetings any member, agent, employee, consultant or professional that
adds to its deliberations. Meeting in executive session will allow the board
to maximize its attention and energy on the road ahead and not the road
already traveled. All deliberations of the executive board wm be reported
at the next regular membership meetings.
SWEE:-IEY
ROBERT T. HEENAN
JOHN
number of recommendations that the local will have to undertake in how it
conducts business. The local also is being placed under monitorship by
the International for a minimum of six months to ensure the
recommendations are implemented. These moves are a result of the
audit and investigation of the local that was undertaken following receipt of
numerous complaints from Local 501 members.
HOLLIDAY
This executive session requirement by definition excludes from
participation all non-board members, including retired officers, agents and
others Who have previously served the local union. Thank you for your
attention in this matter.
III
}OHNTAHERN
Fraternally,
MICHAEL
KUBAJ.
BROWN
GLEN D. }OH:SSON
/Gener
Giblin
resident
er; U.7\'SEJ.
R.iCH/>.RD GRIFFIN
VJG/nwp
C: Christopher Brown, Business Manager, IUOE Local 501
1125 SEVrnHENTH STREET, NW• WASHINGTON, DC 20036·4707 • 202•429·9100 • WWW.IUOE.ORG
EXHIBIT “9”
EXHIBIT “10”
DRA:BMR:JL
F#2002R00891
DEROSS.SUP3.IND
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - X
S U P E R S E D I N G
I N D I C T M E N T
UNITED STATES OF AMERICA
- against THOMAS P. MCGUIRE,
also known as “Thomas Maguire,”
THOMAS G. MCNAMARA,
also known as “Tommy Mac,”
DANIEL J. MURPHY and
ANTHONY QUARANTA,
Defendants.
Cr. No. 03-191 (S-6) (SJ)
(T. 18, U.S.C., §§ 371, 1341,
1962(c), 1962(d), 1963, 2,
981(a)(1)(C) and 3551 et
seq.; T. 21, U.S.C., § 853;
T. 26, U.S.C., § 7206(1);
T. 28, U.S.C., § 2461(c);
T. 29, U.S.C., §§ 186(a)(1),
186(b)(1) and 186(d)(2))
- - - - - - - - - - - - - - - - X
THE GRAND JURY CHARGES:
At all times relevant to this superseding indictment,
unless otherwise indicated:
The International Union of Operating Engineers
1.
The International Union of Operating Engineers
(the “Union”), with headquarters in Washington, D.C., had
approximately 400,000 members in 170 local unions throughout the
United States and Canada.
The Union, which was affiliated with
the AFL-CIO, represented, among others, operating engineers who
worked as heavy equipment operators, mechanics and surveyors in
the construction industry.
2.
Local Union 14-14B of the Union (“Local 14") and
Locals 15, 15A, 15B, 15C, 15D of the Union (“Local 15") were
constituent locals of the Union.
Local 14 and Local 15
2
represented operating engineers in Manhattan, Bronx, Brooklyn,
Queens and Staten Island, New York, who performed work at various
construction sites in the New York City area (“Job Sites”).
3.
its members.
Locals 14 and 15 each had benefit trust funds for
The Local 14 funds included the Operating Engineers
Local 14 and 14B Annuity Fund, the Operating Engineers Local 14
and 14B Pension Fund and the Operating Engineers Local 14 and 14B
Welfare Fund (the “Local 14 Plans”).
The Local 15 funds included
the Annuity Fund of the International Union of Operating
Engineers, Local Unions 15, 15A, 15B, 15C, 15D, AFL-CIO; the
Pension Fund of the International Union of Operating Engineers,
Local Unions 15, 15A, 15B, 15C, 15D, AFL-CIO; the Welfare Fund of
the International Union of Operating Engineers, Local Unions 15,
15A, 15B, 15C, 15D, AFL-CIO; and the Vacation Fund of the
International Union of Operating Engineers, Local Unions 15, 15A,
15B, 15C, 15D, AFL-CIO (the “Vacation Fund of Local 15")
(collectively, the “Local 15 Plans”).
Local 15
4.
Local 15 members elected certain officers,
including a Business Manager.
Local 15 members were also
represented by Business Agents, who were appointed by the
Business Manager.
Each Business Agent had responsibility for
overseeing Local 15's business in separate geographic areas of
greater New York City.
Among other duties, the Business Agents
ensured contractors’ compliance with collective bargaining
3
agreements.
Local 15 employed and paid a salary to each person
employed as a Business Manager or Business Agent.
5.
Local 15 designated “Maintenance Foremen” to
oversee certain Job Sites as they affected Local 15 members.
In
that capacity, Maintenance Foremen acted as representatives of
Local 15's members.
The Local 15 Enterprise
6.
Local 15 constituted an “enterprise” as defined by
Title 18, United States Code, Section 1961(4) (the “Local 15
Enterprise”).
The Local 15 Enterprise operated in the Eastern
District of New York and elsewhere.
The Defendants
7.
At various times relevant to this superseding
indictment, the defendant THOMAS P. MCGUIRE, also known as
“Thomas Maguire,” was the Business Manager of Local 15.
In that
capacity, he acted as a representative of Local 15's members.
8.
indictment, the defendants THOMAS G. MCNAMARA, also known as
“Tommy Mac,” and DANIEL J. MURPHY were Business Agents, or
“delegates,” of Local 15.
In that capacity, MCNAMARA and MURPHY
acted as representatives of Local 15's members.
9.
indictment, the defendant ANTHONY QUARANTA was a member of Local
15.
At certain Job Sites, QUARANTA was a Maintenance Foreman.
In that capacity, he acted as a representative of Local 15's
4
members.
10.
The defendants participated in the operation and
management of the Local 15 Enterprise in order to, among other
things, make money illicitly through the commission of crimes,
including unlawful labor payments and mail fraud.
COUNT ONE
(Racketeering)
11.
The allegations in paragraphs 1 through 10 are
realleged and incorporated as if fully set forth in this
paragraph.
12.
In or about and between December 1989 and November
2002, both dates being approximate and inclusive, within the
Eastern District of New York and elsewhere, the defendants THOMAS
P. MCGUIRE, also known as “Thomas Maguire,” THOMAS G. MCNAMARA,
also known as “Tommy Mac,” and DANIEL J. MURPHY, together with
others, being persons employed by and associated with the Local
15 Enterprise, an enterprise that engaged in, and the activities
of which affected, interstate commerce, knowingly and
intentionally conducted and participated, directly and
indirectly, in the conduct of the affairs of that enterprise
through a pattern of racketeering activity, as defined in Title
18, United States Code, Sections 1961(1) and 1961(5), consisting
of the racketeering acts set forth below.
5
RACKETEERING ACT ONE
(Mail Fraud – Local 15 Jobs)
13.
The defendant named below committed the following
acts, any one of which alone constitutes racketeering act one.
14.
In or about and between November 1998 and November
Eastern District of New York and elsewhere, the defendant DANIEL
J. MURPHY, together with others, knowingly and intentionally
devised a scheme and artifice to defraud contractors, real estate
holders and developers, and to obtain money and property, to wit:
money paid as wages and contributions to benefit plans, from them
by means of materially false and fraudulent pretenses,
representations and promises.
15.
It was part of the scheme and artifice that the
defendant DANIEL J. MURPHY, together with others, would and did
submit and cause to be submitted false information regarding
hours worked to contractors, claiming that certain hours had been
worked by a member of Local 15 who had, in fact, not worked those
hours, in order fraudulently to obtain wages and contributions to
the Local 15 Plans in the name of that member.
16.
For the purpose of executing the scheme and
artifice, the defendant DANIEL J. MURPHY, together with others,
did place and caused to be placed in authorized depositories for
mail matter to be delivered by the United States Postal Service
the following items of mail matter, among others, in violation of
6
Title 18, United States Code, Sections 1341 and 2:
Racketeering
Act
Approximate Date
of Mailing
Description
Sender
1A
May 13, 1999
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
1B
August 5, 1999
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
1C
December 30, 1999
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
1D
April 28, 2000
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
1E
September 14, 2000
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
1F
January 11, 2001
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
1G
July 6, 2001
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
1H
December 21, 2001
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
1I
April 25, 2002
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
1J
August 7, 2002
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
RACKETEERING ACT TWO
(Oceana Condos Job Site)
17.
acts, either one of which alone constitutes racketeering act two.
A.
Unlawful Labor Payments
18.
In or about and between April 2000 and November
Eastern District of New York, the defendant THOMAS G. MCNAMARA,
together with others, knowingly and willfully requested,
demanded, received and accepted and agreed to receive and accept
7
payments and deliveries of money and other things of value in an
amount in excess of $1,000 to representatives of employees who
were members of Local 14 and Local 15 and were then employed in
an industry affecting commerce, from employers at the Oceana
Condos Job Site and from persons who acted in the interest of
said employers of the employees, in violation of Title 29, United
States Code, Sections 186(a)(1), 186(b)(1) and 186(d)(2) and
Title 18, United States Code, Section 2.
B.
Mail Fraud
19.
Eastern District of New York and elsewhere, the defendant THOMAS
G. MCNAMARA, together with others, knowingly and intentionally
20.
defendant THOMAS G. MCNAMARA, together with others, would and did
hours worked to a contractor, to wit:
Muss Development, Inc., in
connection with the Oceana Condos Job Site, claiming that certain
hours had been worked by certain Local 14 and Local 15 members
who had, in fact, not worked those hours, in order fraudulently
8
to obtain wages and contributions to the Local 14 Plans and the
Local 15 Plans in the names of those members.
21.
artifice, the defendant THOMAS G. MCNAMARA, together with others,
an item of mail matter, to wit:
a vacation check for a
coconspirator from the Vacation Fund of Local 15, mailed on or
about November 21, 2001, in violation of Title 18, United States
Code, Sections 1341 and 2.
RACKETEERING ACT THREE
(Brooklyn General Post Office Job Site)
22.
acts, either one of which alone constitutes racketeering act
three.
A.
23.
In or about and between July 2000 and August 2002,
both dates being approximate and inclusive, within the Eastern
District of New York, the defendant THOMAS G. MCNAMARA, together
with others, knowingly and willfully requested, demanded,
received and accepted and agreed to receive and accept payments
and deliveries of money and other things of value in an amount in
excess of $1,000 to representatives of employees who were members
of Local 14 and Local 15 and were then employed in an industry
affecting commerce, from employers at the Brooklyn General Post
9
Office Job Site and from persons who acted in the interest of
said employers of the employees, in violation of Title 29, United
B.
Mail Fraud
24.
District of New York, the defendant THOMAS G. MCNAMARA, together
with others, knowingly and intentionally devised a scheme and
artifice to defraud contractors, real estate holders and
developers, and to obtain money and property, to wit:
money paid
as wages and contributions to benefit plans, from them by means
of materially false and fraudulent pretenses, representations and
promises.
25.
J.A. Jones GMO LLC, in
connection with the Brooklyn General Post Office Job Site,
claiming that certain hours had been worked by certain Local 14
and Local 15 members who had, in fact, not worked those hours, in
order fraudulently to obtain wages and contributions to the Local
14 Plans and the Local 15 Plans in the names of those members.
26.
10
Racketeering
Act
Approximate Date of
Mailing
Description
Sender
3B-1
December 12, 2001
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
3B-2
April 3, 2002
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
RACKETEERING ACT FOUR
(Staten Island Yankee Stadium Job Site)
27.
four.
A.
28.
In or about and between March 2000 and December
G. MCNAMARA, together with others, knowingly and willfully
requested, demanded, received and accepted and agreed to receive
and accept payments and deliveries of money and other things of
value in an amount in excess of $1,000 to representatives of
employees who were members of Local 14 and Local 15 and were then
employed in an industry affecting commerce, from employers at the
Staten Island Yankee Stadium Job Site and from persons who acted
in the interest of said employers of the employees, in violation
11
of Title 29, United States Code, Sections 186(a)(1), 186(b)(1)
and 186(d)(2) and Title 18, United States Code, Section 2.
B.
Mail Fraud
29.
30.
hours worked to contractors, to wit:
Interstate Industrial and
D. Gangi Contracting Corporation, in connection with the Staten
Island Yankee Stadium Job Site, claiming that certain hours had
been worked by certain Local 14 and Local 15 members who had, in
fact, not worked those hours, in order fraudulently to obtain
wages and contributions to the Local 14 Plans and the Local 15
Plans in the names of those members.
31.
12
Racketeering
Act
Approximate Date
of Mailing
Description
Sender
4B-1
December 27, 2000
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
4B-2
January 10, 2001
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
4B-3
April 10, 2001
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
4B-4
August 7, 2001
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
RACKETEERING ACT FIVE
(P.S. 58 Staten Island Job Site)
32.
five.
A.
33.
On or about and between December 4, 2000 and April
3, 2002, both dates being approximate and inclusive, within the
an industry affecting commerce, from employers at the P.S. 58
13
Staten Island Job Site and from persons who acted in the interest
of said employers of the employees, in violation of Title 29,
United States Code, Sections 186(a)(1), 186(b)(1) and 186(d)(2)
and Title 18, United States Code, Section 2.
B.
Mail Fraud
34.
35.
hours worked to contractors, to wit:
New York Concrete Corp. and
DeMatteis Construction Corp., in connection with the P.S. 58
Staten Island Job Site, claiming that certain hours had been
worked by certain Local 14 and Local 15 members who had, in fact,
not worked those hours, in order fraudulently to obtain wages and
contributions to the Local 14 Plans and Local 15 Plans in the
names of those members.
36.
14
Approx. Date
of Mailing
Racketeering
Act
Description
Sender
5B-1
January 31, 2001
Daily Sign Out Log
Mail Certification
DeMatteis Constr.
Corp.
5B-2
March 1, 2001
Daily Sign Out Log
Mail Certification
DeMatteis Constr.
Corp.
5B-3
April 10, 2001
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
5B-4
April 19, 2001
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
5B-5
May 29, 2001
Daily Sign Out Log
Mail Certification
DeMatteis Constr.
Corp.
5B-6
July 11, 2001
Daily Sign Out Log
Mail Certification
DeMatteis Constr.
Corp.
5B-7
July 16, 2001
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
5B-8
December 12, 2001
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
5B-9
April 3, 2002
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
RACKETEERING ACT SIX
(Unlawful Labor Payments: Company 1)
37.
acts, either one of which alone constitutes racketeering act six.
15
A.
38.
In or about and between Spring 2001 and November
Eastern District of New York, the defendant DANIEL J. MURPHY,
being a representative of employees, who were members of Local 15
and were then employed in an industry affecting commerce,
knowingly and willfully requested, demanded, received and
accepted and agreed to receive and accept payments and deliveries
of money and other things of value in excess of $1,000 from an
employer, to wit:
Company 1, the identity of which is known to
the grand jury, and from a person who acted in the interest of
said employer of the employees, in violation of Title 29, United
B.
Receipt of Labor Bribes
39.
being a labor official, knowingly and intentionally accepted
benefits from another person upon an agreement and understanding
that such benefits would influence him in respect to his acts,
decisions and duties as a labor official, in violation of New
York Penal Law Section 180.25.
16
RACKETEERING ACT SEVEN
(Unlawful Labor Payments: E.G. Clemente Contracting Corp.)
40.
The defendants named below committed the following
seven.
A.
41.
In or about and between December 1989 and December
Eastern District of New York, the defendants THOMAS P. MCGUIRE,
THOMAS G. MCNAMARA and DANIEL J. MURPHY, being representatives of
employees, who were members of Local 15 and were then employed in
an industry affecting commerce, knowingly and willfully
value in excess of $1,000 from an employer, to wit:
E.G.
Clemente Contracting Corp., and from a person who acted in the
interest of said employer of the employees, in violation of Title
29, United States Code, Sections 186(a)(1), 186(b)(1) and
186(d)(2) and Title 18, United States Code, Section 2.
B.
42.
THOMAS G. MCNAMARA and DANIEL J. MURPHY, being labor officials,
knowingly and intentionally accepted benefits from another person
17
upon an agreement and understanding that such benefits would
influence them in respect to their acts, decisions and duties as
labor officials, in violation of New York Penal Law Section
180.25.
RACKETEERING ACT EIGHT
43.
The defendants named below committed the following
eight.
A.
44.
In or about and between June 1993 and December
THOMAS G. MCNAMARA and DANIEL J. MURPHY, being representatives of
Company 2,
the identity of which is known to the grand jury, and from a
person who acted in the interest of said employer of the
employees, in violation of Title 29, United States Code, Sections
186(a)(1), 186(b)(1) and 186(d)(2) and Title 18, United States
Code, Section 2.
18
B.
45.
THOMAS G. MCNAMARA and DANIEL J. MURPHY, being labor officials,
knowingly and intentionally accepted benefits from another person
upon an agreement and understanding that such benefits would
influence them in respect to their acts, decisions and duties as
labor officials, in violation of New York Penal Law Section
180.25.
RACKETEERING ACT NINE
46.
nine.
A.
47.
employer, to wit:
Company 3, the identity of which is known to
19
the grand jury, and from a person who acted in the interest of
said employer of the employees, in violation of Title 29, United
B.
48.
being a labor official, knowingly and intentionally accepted
benefits from another person upon an agreement and understanding
that such benefits would influence him in respect to his acts,
decisions and duties as a labor official, in violation of New
York Penal Law Section 180.25.
(Title 18, United States Code, Sections 1962(c), 1963
and 3551 et seq.)
COUNT TWO
(Racketeering Conspiracy)
49.
paragraph.
50.
In or about and between December 1989 and November
Eastern District of New York and elsewhere, the defendants THOMAS
P. MCGUIRE, also known as “Thomas Maguire,” THOMAS G. MCNAMARA
and DANIEL J. MURPHY, together with others, being persons
20
employed by and associated with the Local 15 Enterprise, an
enterprise that engaged in, and the activities of which affected,
interstate commerce, knowingly and intentionally conspired to
violate Title 18, United States Code, Section 1962(c), that is,
to conduct and participate, directly and indirectly, in the
conduct of the affairs of that enterprise through a pattern of
racketeering activity, as defined in Title 18, United States
Code, Sections 1961(1) and 1961(5).
51.
The pattern of racketeering activity through which
the above-named defendants agreed to conduct the affairs of the
enterprise consisted of acts set forth in paragraphs 13 through
48 of Count One, as Racketeering Acts 1 through 9, which are
paragraph.
Each defendant agreed that a conspirator would commit
at least two of these racketeering acts in the conduct of the
affairs of the enterprise.
(Title 18, United States Code, Sections 1962(d), 1963
and 3551 et seq.)
COUNT THREE
(Mail Fraud Conspiracy – Local 15 Jobs)
52.
paragraph.
53.
21
conspired to devise a scheme and artifice to defraud contractors,
real estate holders and developers, and to obtain money and
property, to wit:
money paid as wages and contributions to
benefit plans, from them by means of materially false and
fraudulent pretenses, representations and promises, and, for the
purpose of executing such scheme and artifice, to cause mail
matter to be delivered by the United States Postal Service, in
violation of Title 18, United States Code, Section 1341.
54.
It was part of the conspiracy that the defendant
DANIEL J. MURPHY, together with others, would and did submit and
cause to be submitted false information regarding hours worked to
contractors, claiming that certain hours had been worked by a
member of Local 15 who had, in fact, not worked those hours, in
15 Plans in the name of that member.
55.
In furtherance of the conspiracy and to effect the
objectives thereof, within the Eastern District of New York and
elsewhere, the defendant DANIEL J. MURPHY, together with others,
committed and caused to be committed, among others, the
following:
OVERT ACTS
a.
On or about May 13, 1999, the Vacation Fund of
Local 15 in New York, New York mailed a vacation check to a Local
22
15 member.
b.
On or about August 5, 1999, the Vacation Fund
of Local 15 in New York, New York mailed a vacation check to a
Local 15 member.
c.
On or about December 30, 1999, the Vacation
Fund of Local 15 in New York, New York mailed a vacation check to
a Local 15 member.
d.
On or about April 28, 2000, the Vacation Fund
Local 15 member.
e.
On or about September 14, 2000, the Vacation
a Local 15 member.
f.
On or about January 11, 2001, the Vacation
a Local 15 member.
g.
On or about July 6, 2001, the Vacation Fund of
Local 15 in New York, New York mailed a vacation check to a Local
15 member.
h.
On or about July 12, 2001, the defendant DANIEL
J. MURPHY caused a facsimile containing information about a Local
15 member to be sent from the Union office in Flushing, New York.
i.
On or about December 21, 2001, the Vacation
a Local 15 member.
23
j.
On or about April 25, 2002, the Vacation Fund
Local 15 member.
k.
On or about August 7, 2002, the Vacation Fund
Local 15 member.
(Title 18, United States Code, Sections 371 and 3551 et
seq.)
COUNTS FOUR THROUGH THIRTEEN
(Mail Fraud: Local 15 Member)
56.
paragraph.
57.
58.
defendant DANIEL J. MURPHY, together with others, would and did
24
hours worked to contractors, claiming that certain hours had been
worked by a member of Local 15 who had, in fact, not worked those
hours, in order fraudulently to obtain wages and contributions to
the Local 15 Plans in the name of that member.
59.
artifice, the defendant DANIEL J. MURPHY, together with others,
the following items of mail matter:
Count
Approximate Date
of Mailing
Description
Sender
4
May 13, 1999
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
5
August 5, 1999
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
6
December 30, 1999
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
7
April 28, 2000
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
8
September 14, 2000
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
9
January 11, 2001
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
10
July 6, 2001
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
11
December 21, 2001
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
12
April 25, 2002
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
13
August 7, 2002
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
(Title 18, United States Code, Sections 1341, 2 and
3551 et seq.)
25
COUNT FOURTEEN
(Unlawful Labor Payments: Oceana Condos Job Site)
60.
paragraph.
61.
also known as “Tommy Mac,” together with others, knowingly and
willfully requested, demanded, received and accepted and agreed
to receive and accept payments and deliveries of money and other
things of value in an amount in excess of $1,000 to
representatives of employees who were members of Local 14 and
Local 15 and were then employed in an industry affecting
commerce, from employers at the Oceana Condos Job Site and from
persons who acted in the interest of said employers of the
employees.
(Title 29, United States Code, Sections 186(a)(1),
186(b)(1) and 186(d)(2); Title 18, United States Code, Sections 2
and 3551 et seq.)
(Mail Fraud:
62.
COUNT FIFTEEN
Oceana Condos Job Site)
paragraph.
26
63.
G. MCNAMARA, also known as “Tommy Mac,” together with others,
knowingly and intentionally devised a scheme and artifice to
defraud contractors, real estate holders and developers, and to
obtain money and property, to wit:
money paid as wages and
contributions to benefit plans, from them by means of materially
false and fraudulent pretenses, representations and promises.
64.
defendant THOMAS G. MCNAMARA, also known as “Tommy Mac,” together
with others, would and did submit and cause to be submitted false
information regarding hours worked to contractors, to wit:
Muss
Development, Inc., in connection with the Oceana Condos Job Site,
65.
artifice, the defendant THOMAS G. MCNAMARA, also known as “Tommy
Mac,” together with others, did place and caused to be placed in
authorized depositories for mail matter to be delivered by the
United States Postal Service an item of mail matter, to wit:
coconspirator’s vacation check from the Vacation Fund of Local
a
15, on or about November 21, 2001.
27
3551 et seq.)
(Unlawful Labor Payments:
66.
COUNT SIXTEEN
Brooklyn General Post Office Job Site)
paragraph.
67.
District of New York, the defendant THOMAS G. MCNAMARA, also
known as “Tommy Mac,” together with others, knowingly and
commerce, from employers at the Brooklyn General Post Office Job
Site and from persons who acted in the interest of said employers
of the employees.
and 3551 et seq.)
COUNTS SEVENTEEN AND EIGHTEEN
(Mail Fraud: Brooklyn General Post Office Job Site)
68.
28
paragraph.
69.
District of New York, the defendant THOMAS G. MCNAMARA, also
known as “Tommy Mac,” together with others, knowingly and
intentionally devised a scheme and artifice to defraud
contractors, real estate holders and developers, and to obtain
money and property, to wit:
70.
information regarding hours worked to a contractor, to wit:
J.A.
Jones GMO LLC, in connection with the Brooklyn General Post
Office Job Site, claiming that certain hours had been worked by
certain Local 14 and Local 15 members who had, in fact, not
worked those hours, in order fraudulently to obtain wages and
contributions to the Local 14 Plans and the Local 15 Plans in the
names of those members.
71.
United States Postal Service the following items of mail matter,
29
among others, in violation of Title 18, United States Code,
Sections 1341 and 2:
Count
Approximate Date of
Mailing
Description
Sender
17
December 12, 2001
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
18
April 3, 2002
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
3551 et seq.)
(Unlawful Labor Payments:
72.
COUNT NINETEEN
Staten Island Yankee Stadium Job Site)
paragraph.
73.
of money and other things of value in an amount in excess of
$1,000 to representatives of employees who were members of Local
14 and Local 15 and were then employed in an industry affecting
commerce, from employers at the Staten Island Yankee Stadium Job
Site and from persons who acted in the interest of said employers
of the employees.
30
and 3551 et seq.)
COUNTS TWENTY THROUGH TWENTY-THREE
(Mail Fraud: Staten Island Yankee Stadium Job Site)
74.
paragraph.
75.
76.
Interstate Industrial and D. Gangi Contracting Corporation, in
connection with the Staten Island Yankee Stadium Job Site,
31
77.
United States Postal Service the following items of mail matter,
among others:
Count
Approximate Date
of Mailing
Description
Sender
20
December 27, 2000
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
21
January 10, 2001
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
22
April 10, 2001
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
23
August 7, 2001
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
3551 et seq.)
COUNT TWENTY-FOUR
(Unlawful Labor Payments: Coney Island Mets Stadium Job Site)
78.
paragraph.
79.
On or about and between August 1, 2000 and March
Eastern District of New York, the defendant ANTHONY QUARANTA,
32
an industry affecting commerce, from employers at the Coney
Island Mets Stadium Job Site and from persons who acted in the
interest of said employers of the employees.
and 3551 et seq.)
(Mail Fraud:
80.
COUNT TWENTY-FIVE
Coney Island Mets Stadium Job Site)
paragraph.
81.
On or about and between August 1, 2000 and March
Eastern District of New York, the defendant ANTHONY QUARANTA,
together with others, knowingly and intentionally devised a
scheme and artifice to defraud contractors, real estate holders
and developers, and to obtain money and property, to wit:
money
paid as wages and contributions to benefit plans, from them by
means of materially false and fraudulent pretenses,
33
82.
defendant ANTHONY QUARANTA, together with others, would and did
Turner Construction Co.,
in connection with the Coney Island Mets Stadium Job Site,
14 Plans and Local 15 Plans in the names of those members.
83.
artifice, the defendant ANTHONY QUARANTA, together with others,
items of mail matter, to wit:
receipts for a coconspirator from
the Local 14 Fund Office, mailed on or about March 9, 2001.
3551 et seq.)
COUNT TWENTY-SIX
(Unlawful Labor Payments: P.S. 58 Staten Island Job Site)
84.
paragraph.
85.
34
commerce, from employers at the P.S. 58 Staten Island Job Site
and from persons who acted in the interest of said employers of
the employees.
and 3551 et seq.)
COUNTS TWENTY-SEVEN THROUGH THIRTY-FIVE
(Mail Fraud: P.S. 58 Staten Island Job Site)
86.
paragraph.
87.
35
88.
New
York Concrete Corp. and DeMatteis Construction Corp., in
connection with the P.S. 58 Staten Island Job Site, claiming that
certain hours had been worked by certain Local 14 and 15 members
who had, in fact, not worked those hours, in order fraudulently
to obtain wages and contributions to the Local 14 Plans and Local
15 Plans in the names of those members.
89.
the following items of mail matter, among others:
Count
Approx. Date
of Mailing
Description
Sender
27
January 31, 2001
Daily Sign Out Log
Mail Certification
DeMatteis Constr.
Corp.
28
March 1, 2001
Daily Sign Out Log
Mail Certification
DeMatteis Constr.
Corp.
29
April 10, 2001
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
30
April 19, 2001
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
31
May 29, 2001
Daily Sign Out Log
Mail Certification
DeMatteis Constr.
Corp.
32
July 11, 2001
Daily Sign Out Log
Mail Certification
DeMatteis Constr.
Corp.
36
Count
Approx. Date
of Mailing
Description
Sender
33
July 16, 2001
Coconspirator’s
Vacation Check
Vacation Fund of
Local 15
34
December 12, 2001
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
35
April 3, 2002
Coconspirator’s
Vacation Check
Vacation Fund
of Local 15
3551 et seq.)
COUNT THIRTY-SIX
90.
paragraph.
91.
employer, to wit:
Company 1, and from a person who acted in the
interest of said employer of the employees.
and 3551 et seq.)
37
COUNT THIRTY-SEVEN
(Unlawful Labor Payments: E.G. Clemente Contracting Corp.)
92.
paragraph.
93.
also known as “Thomas Maguire,” THOMAS G. MCNAMARA, also known as
“Tommy Mac,” and DANIEL J. MURPHY, being representatives of
E.G.
Clemente Contracting Corp., and from a person who acted in the
interest of said employer of the employees.
and 3551 et seq.)
COUNT THIRTY-EIGHT
94.
paragraph.
38
95.
also known as “Thomas Maguire,” THOMAS G. MCNAMARA, also known as
“Tommy Mac,” and DANIEL J. MURPHY, being representatives of
Company 2,
and from a person who acted in the interest of said employer of
the employees.
and 3551 et seq.)
COUNT THIRTY-NINE
96.
paragraph.
97.
also known as “Tommy Mac,” being a representative of employees,
who were members of Local 15 and were then employed in an
39
industry affecting commerce, knowingly and willfully requested,
payments and deliveries of money and other things of value in
excess of $1,000 from an employer, to wit:
Company 3, the
identity of which is known to the grand jury, and from a person
who acted in the interest of said employer of the employees.
and 3551 et seq.)
COUNT FORTY
(Conspiracy to Defraud the United States)
98.
In or about and between January 2000 and April 15,
knowingly and intentionally conspired to defraud the United
States by impeding, impairing, obstructing and defeating the
lawful functions of the Internal Revenue Service of the Treasury
Department, an agency and department of the United States, in the
ascertainment, computation, assessment and collection of revenue,
to wit:
income taxes, from the defendant MCNAMARA.
99.
It was a part of the conspiracy that the defendant
THOMAS G. MCNAMARA, also known as “Tommy Mac,” together with
others, would and did submit and cause to be submitted false
information regarding hours worked to contractors at various Job
40
Sites, claiming that certain hours had been worked by Union
members who had, in fact, not worked those hours, in order
fraudulently to obtain wages and contributions to benefit plans.
100.
It was a further part of the conspiracy that
Union members received wages which they had not earned and shared
those wages with the defendant MCNAMARA.
101.
It was a further part of the conspiracy that the
defendant MCNAMARA did not declare on his United States personal
income tax returns his share of wages received from Union
members.
102.
In furtherance of the conspiracy and to effect
the objectives thereof, within the Eastern District of New York
and elsewhere, the defendant MCNAMARA, together with others,
committed and caused to be committed, among others, the
following:
OVERT ACTS
a.
On or about January 23, 2001, coconspirators
had a conversation.
b.
On or about January 31, 2001, the defendant
THOMAS G. MCNAMARA and a coconspirator had a conversation.
c.
On or about March 15, 2001, the defendant
THOMAS G. MCNAMARA filed a United States personal income tax
return for the year 2000.
d.
conversation.
On or about June 4, 2001, coconspirators had a
41
e.
On or about March 31, 2002, the defendant
THOMAS G. MCNAMARA filed a United States personal income tax
return for the year 2001.
(Title 18, United States Code, Sections 371 and 3551 et
seq.)
COUNT FORTY-ONE
(Making a False Return: THOMAS G. MCNAMARA 2000)
103.
On or about March 15, 2001, within the Eastern
District of New York and elsewhere, the defendant THOMAS G.
MCNAMARA, also known as “Tommy Mac,” knowingly and willfully made
and subscribed a United States income tax return, Form 1040, for
the year 2000, which was verified by a written declaration that
it was made under penalties of perjury and was filed with the
Internal Revenue Service, which said income tax return he did not
believe to be true and correct as to every material matter in
that he reported that his total income was $173,061, whereas, as
he well knew and believed, his total income was substantially
greater than $173,061.
(Title 26, United States Code, Section 7206(1); Title
18, United States Code, Sections 3551 et seq.)
COUNT FORTY-TWO
(Making a False Return: THOMAS G. MCNAMARA 2001)
104.
On or about March 31, 2002, within the Eastern
District of New York and elsewhere, the defendant THOMAS G.
MCNAMARA, also known as “Tommy Mac,” knowingly and willfully made
and subscribed a United States income tax return, Form 1040, for
42
the year 2001, which was verified by a written declaration that
it was made under penalties of perjury and was filed with the
Internal Revenue Service, which said income tax return he did not
believe to be true and correct as to every material matter in
that he reported that his total income was $179,204, whereas, as
he well knew and believed, his total income was substantially
greater than $179,204.
(Title 26, United States Code, Section 7206(1); Title
18, United States Code, Sections 3551 et seq.)
ADDITIONAL ALLEGATIONS AS TO COUNT ONE, RACKETEERING ACT 1, COUNT
TWO AND COUNTS THREE THROUGH THIRTEEN
(Mail Fraud Conspiracy and Mail Fraud: Local 15 Jobs)
105.
The allegations contained in Count One,
Racketeering Act 1, Count Two and Counts Three through Thirteen
are hereby realleged and incorporated as if fully set forth in
this paragraph, and the additional allegations below are
incorporated by reference into Count One, Racketeering Act 1,
Count Two and Counts Three through Thirteen.
106.
Based on (a) acts and omissions committed,
aided, abetted, counseled, commanded, induced, procured, and
willfully caused by the defendant DANIEL J. MURPHY, and (b) all
reasonably foreseeable acts and omissions of others in
furtherance of a criminal plan, scheme, endeavor, and enterprise
undertaken by the defendant in concert with others; all of which
occurred during the commission of the offense of conviction, in
preparation for that offense, and in the course of attempting to
43
avoid detection and responsibility for that offense, the
following conduct occurred (U.S.S.G. § 1B1.3(a)(1)):
a.
The loss was more than $400,000 (U.S.S.G. §
2B1.1(b)(1)(H)).
b.
The offense involved 10 or more victims
(U.S.S.G. § 2B1.1(b)(2)(A)(i)).
107.
The defendant DANIEL J. MURPHY abused his
position of private trust as a business agent of Local 15 in a
manner that significantly facilitated the commission of the
offense (U.S.S.G. § 3B1.3).
ADDITIONAL ALLEGATIONS AS TO COUNT ONE, RACKETEERING ACTS 2A, 3A,
4A and 5A, AND COUNTS TWO, FOURTEEN,
SIXTEEN, NINETEEN AND TWENTY-SIX
(Unlawful Labor Payments: Oceana Condos, Brooklyn General Post
Office, Staten Island Yankee Stadium and
P.S. 58 Staten Island Job Sites)
108.
Racketeering Acts 2A, 3A, 4A and 5A, and Counts Two, Fourteen,
Sixteen, Nineteen and Twenty-six are hereby realleged and
incorporated as if fully set forth in this paragraph, and the
additional allegations below are incorporated by reference into
Count One, Racketeering Acts 2A, 3A, 4A and 5A, and Counts Two,
Fourteen, Sixteen, Nineteen and Twenty-six.
109.
willfully caused by the defendant THOMAS G. MCNAMARA, and (b) all
44
a.
The defendant THOMAS G. MCNAMARA was a
fiduciary of a labor organization (U.S.S.G. § 2E5.1(b)(1)).
b.
The value of the prohibited payments with
respect to the defendant THOMAS G. MCNAMARA was more than
$1,000,000 (U.S.S.G. §§ 2E5.1(b)(2), 2B1.1(b)(1)(I)).
ADDITIONAL ALLEGATIONS AS TO COUNT TWENTY-FOUR
(Unlawful Labor Payments: Coney Island Mets Stadium Job Site)
110.
The allegations contained in Count Twenty-four
incorporated by reference into Count Twenty-four.
111.
willfully caused by the defendant ANTHONY QUARANTA, and (b) all
45
a.
The defendant ANTHONY QUARANTA was a fiduciary
of a labor organization (U.S.S.G. § 2E5.1(b)(1)).
b.
The value of the prohibited payments was more
than $120,000 (U.S.S.G. §§ 2E5.1(b)(2), 2B1.1(b)(1)(F)).
ADDITIONAL ALLEGATIONS AS TO COUNT ONE, RACKETEERING ACTS 2B, 3B,
4B and 5B, AND COUNTS TWO, FIFTEEN, SEVENTEEN, EIGHTEEN, TWENTY
THROUGH TWENTY-THREE AND TWENTY-SEVEN THROUGH THIRTY-FIVE
(Mail Fraud: Oceana Condos, Brooklyn General Post Office, Staten
Island Yankee Stadium and P.S. 58 Staten Island Job Sites)
112.
Racketeering Acts 2B, 3B, 4B and 5B, and Counts Two, Fifteen,
Seventeen, Eighteen, Twenty through Twenty-three and Twenty-seven
through Thirty-five are hereby realleged and incorporated as if
fully set forth in this paragraph, and the additional allegations
below are incorporated by reference into Count One, Racketeering
Acts 2B, 3B, 4B and 5B, and Counts Two, Fifteen, Seventeen,
Eighteen, Twenty through Twenty-three and Twenty-seven through
Thirty-five.
113.
46
a.
The loss with respect to the defendant THOMAS
G. MCNAMARA was more than $1,000,000 (U.S.S.G. § 2B1.1(b)(1)(I)).
b.
The offense involved 10 or more victims
(U.S.S.G. § 2B1.1(b)(2)(A)(i)).
114.
The defendant THOMAS G. MCNAMARA was a manager
and supervisor of criminal activity that involved five or more
participants and was otherwise extensive (U.S.S.G. § 3B1.1(b)).
115.
The defendant THOMAS G. MCNAMARA abused his
position of private trust as a business agent of Local 15 in a
manner that significantly facilitated the commission of the
ADDITIONAL ALLEGATIONS AS TO COUNT TWENTY-FIVE
(Mail Fraud: Coney Island Mets Stadium Job Site)
116.
The allegations contained in Count Twenty-five
incorporated by reference into Count Twenty-five.
117.
willfully caused by the defendant ANTHONY QUARANTA, and (b) all
47
a.
The loss was more than $120,000 (U.S.S.G. §
2B1.1(b)(1)(F)).
118.
The defendant ANTHONY QUARANTA abused his
position of private trust as a Maintenance Foreman for Local 15
in a manner that significantly facilitated the commission of the
ADDITIONAL ALLEGATIONS AS TO COUNT ONE, RACKETEERING ACT 6, AND
COUNTS TWO AND THIRTY-SIX
119.
Racketeering Act 6, and Counts Two and Thirty-six are hereby
paragraph, and the additional allegations below are incorporated
by reference into Count One, Racketeering Act 6, and Counts Two
and Thirty-six.
120.
willfully caused by the defendant DANIEL J. MURPHY and (b) all
48
a.
The defendant DANIEL J. MURPHY was a
b.
than $10,000 (U.S.S.G. §§ 2E5.1(b)(2), 2B1.1(b)(1)(C)).
COUNTS TWO AND THIRTY-SEVEN
(Unlawful Labor Payments: E.G. Clemente Corp.)
121.
Racketeering Act 7, and Counts Two and Thirty-seven are hereby
and Thirty-seven.
122.
willfully caused by the defendants THOMAS P. MCGUIRE, DANIEL J.
MURPHY and THOMAS G. MCNAMARA and (b) all reasonably foreseeable
acts and omissions of others in furtherance of a criminal plan,
scheme, endeavor, and enterprise undertaken by the defendants in
concert with others; all of which occurred during the commission
of the offense of conviction, in preparation for that offense,
49
and in the course of attempting to avoid detection and
responsibility for that offense, the following conduct occurred
(U.S.S.G. § 1B1.3(a)(1)):
a.
The defendants THOMAS P. MCGUIRE, DANIEL J.
MURPHY and THOMAS G. MCNAMARA were fiduciaries of a labor
organization (U.S.S.G. § 2E5.1(b)(1)).
b.
respect to the defendants THOMAS P. MCGUIRE and DANIEL J. MURPHY
was more than $10,000 (U.S.S.G. §§ 2E5.1(b)(2), 2B1.1(b)(1)(C)).
c.
respect to the defendant THOMAS G. MCNAMARA was more than $5,000
(U.S.S.G. §§ 2E5.1(b)(2), 2B1.1(b)(1)(B)).
COUNTS TWO AND THIRTY-EIGHT
123. The allegations contained in Count One,
Racketeering Act 8, and Counts Two and Thirty-eight are hereby
and Thirty-eight.
124.
willfully caused by the defendants THOMAS P. MCGUIRE, DANIEL J.
MURPHY and THOMAS G. MCNAMARA, and (b) all reasonably foreseeable
acts and omissions of others in furtherance of a criminal plan,
50
scheme, endeavor, and enterprise undertaken by the defendants in
concert with others; all of which occurred during the commission
of the offense of conviction, in preparation for that offense,
and in the course of attempting to avoid detection and
responsibility for that offense, the following conduct occurred
(U.S.S.G. § 1B1.3(a)(1)):
a.
The defendants THOMAS P. MCGUIRE, DANIEL J.
MURPHY and THOMAS G. MCNAMARA were fiduciaries of a labor
organization (U.S.S.G. § 2E5.1(b)(1)).
b.
than $30,000 (U.S.S.G. §§ 2E5.1(b)(2), 2B1.1(b)(1)(D)).
COUNTS TWO AND THIRTY-NINE
125.
Racketeering Act 9, and Counts Two and Thirty-nine are hereby
and Thirty-nine.
126.
51
a.
The defendant THOMAS G. MCNAMARA was a
ADDITIONAL ALLEGATIONS AS TO COUNT FORTY
(Conspiracy to Defraud the United States)
127.
The allegations contained in Count Forty are
hereby realleged and incorporated as if fully set forth in this
by reference into Count Forty.
128.
a.
The tax loss was more than $30,000 (U.S.S.G.
§§ 2T1.9(a)(1), 2T4.1(E)).
52
ADDITIONAL ALLEGATIONS AS TO COUNTS FORTY-ONE AND FORTY-TWO
(Making False Returns)
129.
The allegations contained in Counts Forty-one
and Forty-two are hereby realleged and incorporated as if fully
set forth in this paragraph, and the additional allegations below
are incorporated by reference into Counts Forty-one and Fortytwo.
130.
a.
The tax loss was more than $5,000 (U.S.S.G. §§
2T1.1(a)(1), 2T4.1(C)).
CRIMINAL FORFEITURE ALLEGATIONS
A.
Criminal Forfeiture Allegation for Counts One and Two
131.
The United States hereby gives notice to the
defendants charged in Counts One and Two that, upon conviction of
either such offense, the government will seek forfeiture in
accordance with Title 18, United States Code, Section 1963, which

IUOE RICO Local 501 amended #1

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