As reported in the last the UCU, Matthew J. Downey, lead operator for Int’l Union of Elevator Constructors Local 1 in N.Y.C., was indicted Oct. 30 for witness tampering and obstruction of justice. The case is before U.S. Dist. Judge David G. Trager (E.D.N.Y., Clinton). The U.S. Atty.’s Office for the E.D.N.Y. has provided the UCU with an July 25 affidavit of FBI Special Agent Joseph Bowen written in support of an application for an arrest warrant. It outlines troubling details on these alleged criminal acts.
According to the affidavit, Downey and other members and representatives of Local 1 have been submitting falsified time sheets to building contractors, which claim either inflated hours or hours for individuals who did not work at the job sites at all. Further, the Dep’t of Labor has reportedly found dozens of instances of double-dipping: individuals being paid for supposedly being at two different job sites at the exact same time.The federal probe has allegedly documented more than $2 million from the falsified hours that has been regularly transmitted to accounts controlled by Downey starting about 1996. The funds have reportedly been transferred in cash and through a bank account in the name of a fictitious partnership, “Mattlynn.”
Between Apr. 2000 and Apr. 2001, the FBI’s Cooperating Witness 1 (CW1) secretly recorded a conversation with Downey. The purpose of the meeting was to discuss a supposed grand jury subpoena that CW1 received to corroborate Downey’s involvement in the alleged no-show jobs scheme. CW1 asked Downey for advice on what to tell the grand fury, and Downey allegedly recited, numerous times, what a rehearsed version of the facts, suggesting that CW1 say that 1) he had given Downey permission to sign his checks, and 2) Downey gave CW1 the entire proceeds of the checks. CW1 reminded Downey that he had not given all of the check proceeds to CW1. Downey reportedly replied, “Yeah, I know what the deal was, but they don’t!” and added, “We know the deal, you know the deal, and so on and so forth. What do you feel comfortable with and what do you think is lying? If a guy says to you, ‘Did you give Downey permission to cash your check?’ ‘Absolutely, he cashed my check.’ ‘Why?’ ‘Saved me from going to the bank, saved me from going to the bar.'” Bowen described this statement as “facial absurdity” and contrary to CW1’s account. Further, after allegedly suggesting that CW1 lie to the grand jury, Downey reportedly said that “I gotta be very careful, here” because “if I ever get caught in a conversation like, something like that, they got it on tape, they get me for . . . , uh, obstruction of justice.”
The federal probe has reportedly revealed that the benefits to operators, like CW1, who allowed their names to be used for inflated or no-show hours varied by person and situation. Sometimes, Downey would allegedly get the entire pay and the operator would get the corresponding pension and annuity benefits. Other times, Downey would allegedly return a portion of the money in cash to the particular operator involved. Still other times, the operator would get the paycheck, and allegedly kick back part or all of it either directly to Downey or through one of his associates.
Similarly, several contractors issued numerous paychecks for hours that CW2 did not work, with the checks for those hours going to Downey. According to CW2, Downey has told him, in the context of this probe, that if he were ever asked by investigators or a grand jury about no-show hours, CW2 should always maintain that he was actually present at the job sites, and that he gave Downey permission to sign CW2’s name to the back of the checks. CW2 told Bowen that had he ever tried to say anything like that, it would have been an outright lie.
CW1 and CW2 were apparently just examples, for Bowen noted: “Because the purpose of this affidavit is merely to establish probable cause, I have not set forth all of the facts and circumstances of which I am aware.” [USAO E.D.N.Y. 11/14/01]
Chicago Boss Sentenced to 33 Months for $470,000 Theft
U.S. Dist. Judge Matthew F. Kennelly (N.D. Ill., Clinton) sentenced Frank B. Zeuberis, ex-boss of Laborers’ Int’l Union of N. Am. Local 5 in Chicago Hts. Nov. 9 to 33 months in prison for embezzling more than $470,000 in union funds for himself, his wife, and a reputed mob lieutenant, James A. DiForti, he installed in a top local office. Kennelly also ordered the Ind. resident to pay restitution of $473,106. As president and business manager of Local 5, Zeuberis gave himself, his wife, and DiForti unauthorized and fraudulent salary increases, bonuses, and vacation. In pleading guilty to a federal racketeering charge in June, Zeuberis also admitted he solicited $5,000 to appoint a union member as a business agent. His wife was not charged. DiForti died last year. [Chi. Trib. 11/11/01]