On May 5, a federal grand jury returned a six-count indictment against two union officials and a building contractor in an embezzlement scheme against Local 148 of the Novelty and Production Workers Union in Jersey City, U.S. Attorney Christopher J. Christie announced.
The indictment alleges that between 1992 and 2001, Joseph Nardone, Jr., 49, of Bayonne, the Welfare and Pension Fund Administrator for Local 148 and the Local’s recently removed President, and Stanley Rothman, 67, a building contractor now residing in Boynton Beach, Fla., conspired with each other and others to embezzle more than $350,000 in welfare and union funds through a multi-faceted fraud scheme. The indictment also charges Peter Hasho, 67, of Long Island, President of Local 713 of the International Brotherhood of Trade Unions, located in Albertson, N.Y.
According to Count One of the Indictment, the majority of the embezzled funds were obtained through a scheme to generate cash from the union’s Welfare Fund. This scheme involved creating construction projects at the Local 148, which were unnecessary and provided no benefit to the Welfare Fund or its participants. The Indictment charges that Nardone, Jr. and Rothman conspired to embezzle in excess of $275,000 in welfare funds by failing to put the projects out for competitive bidding and then significantly inflating the estimates of the construction projects.
Count Two charges that Nardone, Jr. sold four Welfare Fund-owned empty lots, located in Jersey City, to Rothman. Days later, Rothman resold the lots for a 100 percent profit, resulting in an additional $75,000 loss to the Welfare Fund. Counts Three and Four allege that Nardone hired co-defendant Peter Hasho in December 1997 as a “special independent organizer” and paid him $1,300 per month through January 1999. But Hasho allegedly organized no businesses for Local 148 and provided no other services to the Local.
Count One carries a maximum sentence of five years in prison, a $250,000 fine and restitution to the union. Counts Two through Five each carry a maximum sentence of five years each in prison and a $250,000 fine. Count Six carries a maximum sentence of 20 years in prison and a $500,000 fine.
Christie credited Special Agents of the Dept. of Labor’s Office of Inspector General, under the direction of James Vandenberg, Asst. Regional Inspector General, with bringing the case. He also credited Special Agents from the Labor Dept’s. Employee Benefit Security Administration under the direction of Frank Shishan, Special Agents of the FBI under the direction of Louie F. Allen. Finally, he also credited Agents from the Housing and Urban Development (HUD) Agency, under the direction of Regional Counsel Henry Czauski. The Government is represented by Assistant U.S. Attorney V. Grady O’Malley, Senior Litigation Counsel, U.S. Attorney’s Office in Newark. [U.S.A.O. N.J., 5/5/03]