Two frmr. officers of Local 177 of the Laborers Intl. Union of N. America confessed in the U.S. Dist. Ct. for Sou. Iowa on July 25 to stealing more than $120,000 from the union’s local and job-training funds.
Frmr. Bus. Mgr. Fred T. Risius and ex-vice-pres. Henry A. Jannnenga began their mutual crime spree in Nov. 1999, acc. to the Stipulation of Facts in the Plea Agreement. At month’s end, Risius paid a union member $16,500, supposedly for materials he had sold to the Local’s apprenticeship program. The member split the cash between himself, Risius and Jannenga.
At the same time, Jannenga ordered $660 worth of pens for his high school reunion. Jannenga asked the owner of Awards & T-Shirts Specialists to “hide the charges,” and the owner billed the Iowa State Laborer’s Training Fund. About two years later, on Sept. 11, 2001, Risius ordered four personalized watches costing $865 from the same company and asked the salesperson to bill them as “art and screen charges” to the Local. When Risius learned of an investigation by the U.S. Dept of Labor’s Office of Labor-Mgmt. Standards in St. Louis two months later, he asked the owner to “get rid” of any invoices relating to the watches.
Between December 1999 and January 2000, Risius paid $28,405 to a Des Moines construction company from the Union’s Bldg. Maintenanace Fund, though the company never provided any services for the Union. The owner kept 40% of the funds, and kicked back 60% to Risius. On July 5, 2001, Risius paid $500 to the same contractor from the strike fund. By then, he had already diverted $48,185 worth of strike benefits to himself, with checks written to fictitious individuals and “cash,” for two years.
In February and July of 2000, Risius used the Bldg. Maintenance Fund to buy $2,605 for a laptop computer and digital camera for the personal use of the Local’s office secy. Meanwhile, back at the Job Training Fund, Jannenga used the Fund’s credit card to pay his personal repair bills, clothing purchases, and personal purchases while traveling on behalf of the Training Fund and the Labor Institute for Workforce Development. In February 2000, Risius and Jannenga teamed up again to negotiate a $1,000 “credit refund” from a company laying carpet in the Local Union’s apprenticeship bldg., which the two split 50-50.
By the time the Labor Dept. began its investigation in late 2001, Risius had embezzled a total of $100,060 from the Local Union, while Jannenga had stolen $20,460 from both the Local and the Training Fund. U.S. Dist. Ct. Judge Robert W. Pratt (Clinton) scheduled their sentencing for Oct. 18. Under the plea agreement, both men agreed to fully repay the funds they embezzled. They each face a maximum penalty of five years in prison and a $250,000 fine for their violations of U.S.C. 29, Sec. 501(c). [U.S.A.O., S.D. IA, 7/25/02: DOL]