2 More Fish Netted in NYC Racketeering Scheme

Two of the leaders in the racketeering scheme at more than 20 New York City construction sites from 1989-2001 pled guilty in late April. The scheme of payments for no-show jobs and “labor peace” cost more than $6 million in lost wages and benefits.

On April 24, in the U.S. Dist. Court for the Eastern Dist. of NY, Matthew Joseph Downey, a representative of Local One of the Intl Union of Elevator Constructors, pled to racketeering, unlawful labor payments, money laundering conspiracy, witness tampering, and tax evasion.  He agreed to forfeit $800,000 to the United States Government within 120 days from his assets representing a portion of the racketeering profits.

He was originally indicted on February 5, 2002 on charges relating to a no-show scheme at construction sites in New York City following a joint investigation by the New York branch of the U.S. Ofc. of Labor-Mgmt. Standards, the U.S. Dept. of Labor’s Employee Benefits Security Administration, the FBI, and the IRS.  On April 16, 2002 he was charged in a second indictment for taking payoffs to help developers at the Metropolitan Transportation Authority’s renovation site bill the MTA for no-show workers at inflated rates.

The next day, April 25, in the same court, Local One member and “no-show” employee Marc DeGennaro was sentenced to three years probation, ordered to perform 400 hours of community service, and ordered to pay $77,428 in restitution. He will also forfeit to the U.S. Government $14,230 representing the amount of unlawful contributions made on his behalf to all benefit plans affiliated with Local One. He had earlier pled guilty to conspiracy to demand and receive unlawful labor payments in violation of the Taft-Hartley Act. He was also indicted on February 5, 2002, on charges of conspiracy, making false statements under the Employee Retirement Income Security Act, money laundering, and conspiracy. [OLMS, 4/30/03]