IUJAT Affiliates’ Financial Misdeeds
Several IUJAT affiliates have been the subject of federal investigations into schemes to defraud or extortion:
Health and Welfare Fund Fraud:
According to a 2001 article by Professor Niev Duffy, a 1996 federal racketeering lawsuit was filed against officers of the United Service Workers of America alleging a fraudulent health insurance scheme. According to Newsday reporting, the USWA welfare fund provided health insurance under “bogus contracts”, millions of dollars were shifted to insurance brokers and USWA locals, and in the end, the Fund collapsed and medical bills were left unpaid. Read the article here.
Presidents Embezzle Money:
According to a press release from the Department of Labor, two former presidents of USWU Local 16 (Newton, NJ) pled guilty to conspiring to embezzle funds from the union’s health fund. Charles W. Cart and Susan Donato both pled guilty to conspiring to embezzle money from the Local 16 Health Fund. The press release states that the conspiracy contributed to the demise of the Fund.
According to prosecutors, the scheme fraudulently increased the per-member fee paid to Health Choice - the third-party administrator of which Cart was the CEO - created an $84,000 consulting position at the Local for which no legitimate services were expected or provided, and sent $144,000 in false fees from the Local 16 health fund to Health Choice. Read the press release here.
IUJAT Affiliate’s Leader Extorts Businesses:
According to a Department of Justice press release, in 2017, Roland Bedwell, of the United Plant and Production Workers Local 175, pleaded guilty to threatening a paving contractor if he didn’t hire Local 175 members. According to prosecutors, Bedwell bragged about his mob contacts, threatened to have a crew of “fifteen ex-military men” interfere with his business, and admitted to blocking asphalt deliveries, slashing tires and harassing drivers of another contractor who would not sign a contract with Local 175. Read the press release here.