Every so often, an accused person or persons, though guilty, invites a certain amount of sympathy. Such appears to be the case of a Long Island, New York married couple, Michael and Dorothy Loguidice. For a dozen years the pair had obtained public funds under false pretenses to run their trucking business, in the process misusing those funds. On March 12, the Island Park pair was sentenced in U.S. District Court for the Eastern District of New York to 15 months of incarceration to be followed by three years of supervised release, plus nearly $300,000 in restitution payable to the IRS. Operating through various enterprises, the Loguidices falsified information on application forms to obtain federal contracts and, once awarded, laundered funds to avoid paying taxes. But underlying these acts are some highly disturbing aspects about how unions, particularly International Brotherhood of Teamsters Local 282, deal with “uncooperative” contractors.
Formally, there’s no denying Michael and Dorothy Loguidice illegally gamed the system and were caught. The unraveling of their scheme became apparent in August 2005, when a federal grand jury handed down a racketeering indictment. During the period spanning roughly January 1, 1992-December 31, 2003, the indictment read, the couple “together with others, did knowingly and intentionally conspire to conduct financial transactions affecting interstate commerce, which in fact involved the proceeds of specified unlawful activity, to wit: embezzlement from employee pension funds…and mail fraud.” They pleaded guilty in March 2006. Their 15-month prison sentence could have been 20 years had they gone to trial and been found guilty. Mrs. Loguidice was contrite at sentencing: “I know we are not above the law. We are sorry that we disgraced our family and friends.”
Yet there is a good deal more to this story than meets the eye. For one thing, the Loguidices’ deceptions were made possible by affirmative action. They had served as subcontractors for construction jobs by misrepresenting information on applications for contracts under the City of New York’s Minority- and Woman-Owned Business Enterprise Certification Program (M/WBE). The quality and timeliness of their work, which involved trucking related to demolition and excavation, never had been at issue. Like the fallen Duff family of Chicago, the Loguidices tried to circumvent a system of favoritism in public-sector contracting that never should have been created in the first place.
Second, and more telling, the Loguidices were in desperate straits. And it was a Lake Success, L.I.-based cement truck drivers’ union, Teamsters Local 282, which had been instrumental in putting them there. Letters to U.S. District Judge Sandra J. Feuerstein written by former Loguidice lawyer Anthony Barbiero (dated November 5, 2007) and current Loguidice lawyers Steven Brounstein and Richard Levitt (dated March 5, 2008) indicate as much. Up until the early Nineties, the couple reluctantly had been paying “protection” money to a Local 282 business agent in order to immunize themselves from extortion. Trucking firms who paid the toll received favored status, and thus could run a “double-breasted” shop – that is, one in which a contractor runs parallel union and nonunion operations. Local 282 bosses in effect told contractors in their jurisdiction that if they wanted to receive any work, it would be a good idea to “contribute” to the union’s trust funds. This corrupt practice was revealed in 1995 when Local 282, described by federal prosecutors as a “candy store for the mob,” consented to a RICO judgment. This arrangement included the imposition of an anti-corruption officer.
By that time, Michael and Dorothy Loguidice already had gotten tired of paying up. A displeased Local 282 subjected the couple and a business associate, Jack Stuart, to constant “requests” for fund contributions. Otherwise, the union would play the noble whistle-blower and report the contractor’s violations of City contracts. Though it was common for contractors to be late on their payments, the union subjected the Loguidices to an unusually high degree of scrutiny. The union trust funds filed suit against various contractors, including the Loguidices and Stuart. The couple seemed cooperative, voluntarily sharing the cost of a complete forensic investigation. A report prepared for the anti-corruption officer, Robert Machado, by the accounting firm KMPG showed Loguidice Companies to be roughly $450,000 in arrears to the union ($108,000 plus interest, penalties and attorney’s fees). Yet actual records, which KMPG apparently ignored, indicated this not to be the case.
The Loguidices, now blacklisted, in 1996 filed a RICO suit against Local 282 and its trust funds, alleging that the union’s officers and trustees had engaged in an ongoing criminal conspiracy to extort money from the couple in connection with work being done at the Brooklyn Water Tunnel project. The union responded by engaging in an illegal strike and shutdown of the project, permitting only one trucking company to operate: TNP Trucking, owned and operated by Tom Piale. TNP later would be revealed as having run for almost a decade a double-breasting operation. The firm paid the union $300,000 in delinquent contributions with no interest, penalties or attorney’s fees. Piale later became a union trustee.
A trial belatedly took place in May 2003 before U.S. District Judge William G. Young (Massachusetts) without a jury. Judge Young ruled that the Loguidices had engaged in a pattern of deception, creating companies that effectively functioned as alter egos of one another. Thus, they were liable for all obligations to the union, even though Young admitted that the union had failed to prove any intent to defraud. The Loguidice suit later was incorporated into a larger “global” settlement. The couple’s lawyer at the time, Lawrence Steckman, considers the case one of the very few he’s seen over the years as requiring private RICO action. But the local wouldn’t relent. Instead, they sued the couple for paying union drivers at the tunnel project in cash and at rates below union scale. That suit, too, was settled. The federal government took the position, inexplicably, that the Loguidices were jointly and severally liable for all City contract money they’d received – nearly $7.9 million – despite the fact that the couple (according to Barbiero) had committed no acts of embezzlement and only minor violations of certification clauses. Formally, the Loguidices broke the law. Informally, Teamsters Local 282 laid down the law – enforced by the Gambino, Genovese and Lucchese crime families.
Federal officials familiar with the case point to the Loguidices’ high likelihood of being caught. “Business owners may be surprised to know that approximately seven out of eight people who are sentenced for money laundering are incarcerated,” said IRS Special Agent and Criminal Investigations Spokesperson Joseph Foy. “IRS criminal investigators have specific training to follow money trails and consistently uncover money laundering schemes.” That’s smart advice for a contractor or a union. But though contractors such as the Loguidices shouldn’t be able to hide assets, neither should unions such as Teamsters Local 282, whose bullying style was key to bringing about the couple’s sleight of hand. (U.S. Department of Justice, 8/17/05; Anthony V. Barbiero, 11/5/07; Levitt & Kaizer, 3/5/08; other sources).