Former CA union official pleads guilty to $169K embezzlement scheme
- The former secretary-treasurer and business manager of a Bakersfield, CA, construction workers' union pleaded guilty Monday to charges of embezzling almost $169,000 from the organization, according to The Los Angeles Times.
- Prosecutors claim that Edward Padilla wrote unapproved checks to himself stamped with the union president's signature, used union credit cards for personal expenses and issued unauthorized sick leave payment and travel advances to himself, all during the period of September 2012 to December 2014.
- As part of Padilla's plea agreement, he must pay the union restitution in the amount of $168,780. At his sentencing, which is scheduled for July 10, Padilla could be sent to prison for up to five years and ordered to pay a potential fine of $10,000.
The construction industry, like many others, is often susceptible to fraud, particularly when individuals are allowed to manage finances without adequate controls in place.
Last year in Washington, DC, another union manager pleaded guilty to making illicit payments after he and a Maryland contractor allegedly stole more than $1.7 million from Laborers’ International Union of North America Local 657. Anthony Wendel Frederick Sr. made payments to Gary Amoes Cooper's company, STS General Contracting, for construction work that STS never performed and must pay $1.6 million in restitution to the union, in addition to serving a four-year prison sentence. A jury found Cooper guilty of conspiracy to commit theft, money laundering and wire fraud in late February and sentenced him to almost six years in prison.
Another fairly common way some companies have tried to profit through fraud is manipulation of wage records. Publicly funded projects usually require that contractors pay their employees at specific wage rates, sometimes higher than they would normally pay, and some companies try to get around that requirement.
For example, last month a Massachusetts court ordered a New Hampshire contractor to return $40,000 to its employees after it underpaid them on a Massachusetts Bay Transportation Authority project. S&R Construction and one of its subcontractors also agreed to pay $420,000 to settle charges that they submitted false, overstated invoices to the MBTA. Both companies were barred from doing public work in Massachusetts — the subcontractor for one year and S&R for five years.
- The Los Angeles Times Former construction union leader pleads guilty to embezzlement
- U.S. News & World Report Former Construction Union Leader Admits Embezzlement
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