As a pension management consultant, Michael Linder’s job was to make money for his clients, especially labor unions. Unfortunately, his main interest seemed to be making money for himself and his cronies – and in illegal ways. Now he’s found out just how high the price was. On December 20, U.S. District Judge Philip Reinhard in Rockford, Ill. ordered Linder to serve seven years in prison for defrauding nearly a dozen separate union pension plans out of $5 million and embezzling another $1.9 million from five union benefit plans. In addition, Linder will have to make restitution on $6.6 million of that combined amount. He pleaded guilty in June. It was a conclusion a decade in the making, involving local affiliates of the Iron Workers, Sheet Metal Workers, Painters and other unions across the state of Illinois.
Linder headed Joseph/Anthony & Associates, based in the south Chicago suburb of Matteson. Between 1997 and 2003, federal prosecutors charged, Linder, now 61, defrauded various locals by investing assets of their pension plans in annuity contracts instead of mutual funds, contrary to what he earlier had promised. To aid in the deception, he forged the names of certain pension plan trustees on annuity contracts, and then, without informing them, received $5 million in fees and commissions. That wasn’t the whole story either. During that time, he also embezzled nearly $2 million from three pension funds, plus two health and welfare funds. Prosecutors said he made withdrawals from bank accounts that he had set up in the name of the funds in order to pay life and stop-loss insurance premiums.
This wasn’t the first conviction for Linder. In 2004 he pled guilty to graft charges for giving two union pension officials Harley-Davidson motorcycles each valued at nearly $20,000. The recipients of this unauthorized generosity were Fred Schreier, benefits manager for Local 136 of the Machinery Movers, Riggers and Machinery Erectors, in suburban Chicago, and Thomas Kisting, plan administrator for two pension funds of International Association of Iron Workers (IAIW) Local 498 in Rockford, Ill. Schreier pleaded guilty in federal court in October 2004; Kisting, who also for a while served as business manager for Local 136, had been convicted by jury the previous month.
Local 136, affiliated with the IAIW, has been a special problem area. The union’s international leadership in November 2005 placed the local under receivership for up to two years, having been unable to collect on dues that were supposed to have been forwarded. Union Corruption Update has described in detail how Local 136 was at the center of a mob-connected ring of thefts, ghost-worker hiring, and bookmaking at Chicago’s McCormick Place Convention Center. Vendors not paying kickbacks often found display booth materials “missing.” In addition, in July 2005 the U.S. Department of Labor filed a civil suit against Linder, his wife Elizabeth, and their two companies, Joseph/Anthony & Associates, Inc. and Liz/Mar & Associates, Inc., plus three benefit plan trustees, alleging various financial irregularities. This saga is not complete. (Chicago Tribune, 12/21/06; other sources).