Thursday, July 10, 2008

Two Get 5 Years For Defrauding Carpenters Union

NEW YORK—The owners of a drywall contracting business have each been sentenced to five years in federal prison for conspiring to defraud the Carpenters Union benefit funds of millions of dollars by using non-union labor, paying union carpenters off-the-books and bribing shop stewards and an employee of the benefit funds to assist in the fraud.

Patrick Noel McCaul and James Dermot McGonnel were indicted in December 2006 and pleaded guilty on Nov. 20, 2007.

Prosecutors said the pair owned Tri-Built Construction Inc., a drywall contractor that operated in New York City and Long Island. Between 1993 and 2004, Tri-Built, holding itself out as a union contractor, was hired for numerous construction projects in New York City, including public projects financed by the Dormitory Authority of the State of New York – such as a large construction project at Kings County Hospital in Brooklyn.

During that time, Tri-Built was a party to a collective bargaining agreement with the District Council of New York City and Vicinity of the United Brotherhood of Carpenters and Joiners. Under the collective bargaining agreement, Tri-Built was obligated to use union labor and pay union wages and benefits to all carpenters employed on TriBuilt’s jobsites. In addition, as contractors on state projects, Tri-Built was obligated to pay its employees a state-mandated prevailing wage.

McCaul and McConnel admitted that from 1993 through May 2004, they conspired to defraud the Carpenters Union and its benefit funds by paying workers cash, at non-union rates, without any benefits or tax withholdings. They also employed non-union carpenters in violation of their agreement with the union. These practices enabled McCaul and McGonnell to underbid jobs, knowing that Tri-Built never intended to comply with its collective bargaining and prevailing wage obligations. To avoid detection of their fraud, the defendants bribed Carpenters Union shop stewards to submit false reports, under-reporting the true number of carpenters and hours worked on several Tri-Built jobsites.

McCaul and McGonnell also paid a then-employee of the Carpenters Union benefit funds to destroy internal union records that might reveal the fraud if an audit of Tri-Built were conducted by the union. They diverted at least $6.5 million from the union benefit funds through their fraudulent conduct.

In addition to their five year prison terms, they were each sentenced to two years of supervised release. As part of their sentence, McCaul and McGonnell were ordered to forfeit $1.3 million, which will be paid to the Carpenters Union benefit funds. They have already forfeited $200,000, pursuant to their agreement with the Government to forfeit the total sum of $1.5 million.


3 comments:

  1. Does anyone give a crap, - 0 Comments!

    ReplyDelete
  2. Too much of this goes on without anyone bringing light to it.

    ReplyDelete

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