- A federal judge has sentenced a Maryland contractor to nearly six years in prison and ordered him to pay $1.6 million in restitution for his part in a scheme to steal $1.7 million from a DC-based construction union, according to Engineering News-Record.
- Last year, a jury found Gary Amoes Cooper, owner of STS General Contracting, guilty of conspiracy to commit theft — in addition to money laundering and wire fraud — after the business manager for Laborers’ International Union of North America Local 657 pleaded guilty to making the illicit payments to STS.
- The Department of Justice said the union official, Anthony Wendel Frederick Sr., transferred the money to STS under the guise of payments for construction work that STS never actually performed. Frederick was also ordered to pay the union $1.6 million in restitution and was sentenced to four years in prison. Both Frederick and Cooper must surrender $1.7 million in "criminally-derived proceeds" as well.
Unions typically collect a significant amount of dues from their members. Although much of those funds are earmarked for union benefit programs, the flow of all that cash can create situations ripe for fraud. However, some contractors break the law by not paying for required union benefits in the first place.
Last year, New York prosecutors charged a Long Island contracting company and its owner with 139 counts of fraud for allegedly cheating employees out of more than $250,000 in union benefits by intentionally filing incorrect certified payroll forms with the Port Authority of New York and New Jersey. Arbor Concrete was performing work at John F. Kennedy Airport, and authorities claim that the company falsely stated that it had paid its employees almost $270,000 in accordance with the mandated prevailing wage rates.
Prevailing wage is also an area where some contractors try to cut corners. Most recently, a New Hampshire contractor was ordered to pay $40,000 in restitution after it allegedly failed to pay its employees the correct prevailing wage rates on a Massachusetts Bay Transportation Authority project. In that case, S&R Construction and one of its subcontractors also agreed to pay $420,000 to settle charges that they submitted inflated invoices to the MBTA and were barred from doing public work in Massachusetts for five years and one year, respectively.