Melissa King is learning about the high cost of services. And this time, she’s paying rather than collecting. Ms. King, former benefits administrator for New York’s Laborers International Union of North America Local 147, was indicted by a Manhattan federal grand jury this past February for fleecing union benefit plans to the tune of more than $40 million to feed an insatiable appetite for material things. It is one of the largest embezzlement cases in American labor history, if not the largest. Recently, she complained about the distinct possibility that mounting a legal defense could cost at least $5 million. Very few, if any, observers are working up much sympathy for the defendant.
There is good reason for this, given the details of the case. The four-times-divorced King, now in her late 50s, had managed benefit funds for the famed New York “Sandhogs” union from her palatial home in Irvington-on-Hudson, N.Y. Despite official annual compensation reaching in excess of $500,000, apparently it wasn’t enough. During 2002-08, say federal prosecutors, King systematically ripped off $42.6 million in employer contributions and transferred the money to bank accounts under her control. Common purposes, as detailed in the indictment, were mortgage payments, jewelry, luxury cars, chartered jets, horses and equestrian lessons for her daughter. The union severed its contract with Ms. King in late 2008, shortly after the thefts came to light.
Having spent so much of the money, however, King now is in the unenviable position of potentially not being able to pay her lawyers. And a hefty tab of poetic justice this is. In court papers filed on August 23, a team of computer experts for the defense estimated that the four hard drives seized by the feds contained about one terabyte of data, or roughly 12.5 million documents. The cyber specialists, who work for the Fort Lauderdale, Fla.-based Credence Corp., stated they could “effectively cull the data” to remove “duplicative files and system generated files” for $450,000. That’s the bargain part of all this. The remaining data – a mere one-tenth of the original documents – would likely take about 25,000 hours for her attorneys to sort out. At a billable rate of some $200 per hour, that comes to around $5 million. Melissa King should have thought about all this before allegedly stealing tens of millions of dollars worth of future benefits owed to dues-paying union workers who risk their lives digging subway and water tunnels.