Ohio Contractor, Wife Sentenced for Bribery, Laborers Pension Fraud

liuna logoNew York isn’t the only place where a contractor has lined his pockets by shortchanging workers in labor contracts.  In Ohio, such corruption paid off for Michael Lignos, at least for seven years.  This August, a federal court rewarded him with 21 months in prison and three years of supervised release.  He also ordered him to pay $1,055,942 in restitution to the Ohio Department of Transportation (ODOT) and $2,480 to a benefit plan run by the state chapter of the Laborers International Union of North America.  For taking part in her husband’s scam, Maria Lignos was sentenced to two years’ probation and 30 days’ home confinement.  The actions were part of a wider investigation resulting in the convictions thus far of more than a dozen individuals and at least four companies.


Michael Lignos, a resident of North Royalton, Ohio (south of Cleveland), owned LM Lignos Enterprises with his wife.  The pair secured lucrative contracts from ODOT to paint bridges.  But they’d also been pocketing money by cutting corners, jeopardizing public safety.  A 10-count federal indictment handed down last December had charged the couple with various acts of fraud and bribery during 1998-2005.  Slightly less than a half-year later, they pleaded guilty in U.S. District Court in Cleveland.  Among other things, Michael Lignos, now 42, bribed state inspectors to overlook the improper painting of 11 bridges in Lake and Cuyahoga Counties.  At one point, he’d given ODOT inspectors plane tickets to Las Vegas in exchange for allowing his company to paint bridges in inclement weather and without scraping, sanding or priming surfaces.  Lignos subsequently gave one of the inspectors, Ralph F. Smith III, another $4,000.  Smith eventually pleaded guilty in April 2006 to charges of making false statements.  Lignos also admitted to not paying scheduled FICA payroll taxes on nearly two dozen employees, resulting in an underpayment of $66,000 to the IRS.  Maria Lignos, 30, pleaded guilty to state unemployment insurance fraud by falsely claiming she’d been an employee of LM Lignos Enterprises.

There was a union angle to this story.  Court records show Lignos willfully failed to report labor man-hours to a United Brotherhood of Carpenters and Joiners’ state chapter benefit fund, causing an underpayment of nearly $24,000.  He withheld similar information from a LIUNA benefit plan, causing a loss of $3,224.  Both plans were regulated under the Employee Retirement Income Security Act.  The guilty pleas and sentences were the result of a joint probe by the FBI, the IRS, the U.S. Department of Labor, the U.S. Department of Transportation, and the Ohio Department of Transportation.  (U.S. Department of Justice, 12/21/06; U.S. Department of Transportation, 5/31/07; U.S. Department of Labor, Office of Inspector General, April 1-September 30, 2007).