Family, Associates Indicted for Looting New Jersey Local

The family that played together may wind up going to prison together.  On April 24, a federal grand jury indicted a family of three for embezzling from an Ocean County, N.J. labor union in excess of $250,000 over seven years.  Named in the indictment are August and Rhoda Vergallito, each aged 72, and their daughter Kimberly Vergallito, 42, all residents of Brick Township.  The trio, along with associates Isaac Barocas, 66, and Charles Purcel, 46, allegedly ripped off Local 911 of the International Union of Production, Clerical, and Public Employees during 1999-2006.  Kimberly Vergallito’s positions within the union – board member, vice-president and secretary-treasurer – enabled her parents and the two others to help themselves.  All five individuals are charged with conspiracy.  


According to the U.S. Attorney’s Office in New Jersey, the defendants prevented rank and file from electing officers, keeping them “ignorant of the internal and financial operations of the union.”  Nominally, Kimberly Vergallito ran the operation, and was well-paid for what amounted to no-show work.  As a board member, her salary began at $58,000 and rose to $91,000 three years later.  She hired her mother as office manager in 2004 at $35,000, a level which soon increased to $58,000.  The younger Vergallito was charged with check forgery, using the name and signature of a fictitious person indicated as local president.  She, along with union accountant Charles Purcel, based in Wayne, N.J., also is accused of filing false financial reports with the U.S. Department of Labor over a three-year period.  In addition, Isaac Barocas, a longtime friend of Mr. Vergallito, faces a charge of vehicular assault against a federal agent attempting to serve him with a subpoena. 


If Kimberly Vergallito managed to evade detection for so long, it was because she had an expert teacher in her father.  The grand jury stated that August Vergallito “controlled Local 911 and used its benefit funds to provide a source of income and health care coverage for himself, his immediate family, his in-laws and other personal friends and associates.”  It wasn’t the first time he’d committed criminal acts under cover of a union.  Back in 1996, Vergallito pleaded guilty in Newark federal court to falsifying benefit-plan records for Laborers International Union of North America Local 734.  He received three years’ probation and was ordered to remain out of all union activity for 13 years.  The case had a lot of legs.  Just two years ago, a federal judge removed the administrators of the local’s welfare and pension funds after an independent hearing officer determined that Vergallito’s friends, relatives and business partners had been hired for nonessential or part-time jobs at grossly inflated salaries.  The officer also indicated Vergallito was likely an associate of the Genovese crime family.         


In this context, there is no mystery as to how Kimberly Vergallito came to manage the affairs of Local 911.  August Vergallito, ineligible to run the local himself, merely passed on the tricks of his trade to his daughter, and watched the money roll in.  The real mystery is how nobody else seemed to notice.  The Brick, N.J.-based Production, Clerical and Public Employees Local 911, which represents bus drivers and employees of municipal water commissions, was the only local in a supposedly “international” union.  The union’s 2004 annual financial report (the most recent available) to the U.S. Labor Department indicated it had 975 members, though a more recent estimate pegged the figure at around 400 to 500.  Assistant U.S. Attorney V. Grady O’Malley remarked that the scheme succeeded for as long as it did because members “never questioned anything.”  They’ve got questions now.  (Newark Star-Ledger, 4/25/07; Asbury Park Press, 4/25/07, 5/1/07).