President of NYC Painters Local Pleads Guilty to Fraud, Tax Evasion

painters-union-logoThe coffers of Metal Polishers Local 8A-28A are due for replenishment. Members are hoping they don’t have to wait too long. On April 9, Hector Lopez, former president of the Long Island City (Queens), N.Y.-based union, pleaded guilty in U.S. District Court for the Eastern District of New York to conspiracy to commit mail fraud, wire fraud and tax evasion, related mainly to his fleecing of a union benefit plan. He also will have to make restitution in excess of $1.1 million. Lopez had been arrested and indicted last September on 15 counts of fraud, embezzlement, tax evasion and other offenses following a joint investigation by the U.S. Department of Labor and the Internal Revenue Service.

Union Corruption Update covered this story in detail last October. Lopez, head of the 1,400-member Metal Polishers Local 8A-28A, an affiliate of the International Union of Painters and Allied Trades (IUPAT), had been involved in a protracted court battle with the IUPAT leadership to disaffiliate from the parent organization; IUPAT had responded by ordering an audit of the local’s finances. The latter move turned up a lode of corruption. The local was running a huge deficit and barely had enough money to pay for a week’s worth of expenses. IUPAT requested a full investigation by the Labor Department. The federal probe concluded Lopez indeed had made unauthorized use of union funds. Most of the misuse consisted of more than $740,000 in kickbacks Lopez had accepted from the administrator of the union’s health and welfare fund. In return, Lopez gave the administrator his assurances of retention of the contract. Lopez also accepted kickbacks from an employer trustee of the benefit fund; lived rent-free in a home owned by a union contractor; and structured more than $80,000 cash deposits at local banks so as to evade federal reporting requirements. The Labor Department, joined by the IRS, turned the case over to the Justice Department. And on the morning of September 18, 2012, federal law enforcement agents arrested Lopez at his Oakland, N.J. home. He was indicted later that day on 15 counts, pleading not guilty at his arraignment to all charges. Eventually, however, he changed his tune.

At his plea hearing last month in Brooklyn federal court, Hector Lopez, now 54, admitted to wrongdoing. “When I did these things I knew they were illegal,” he told U.S. District Judge Allyne Ross. Lopez currently is free on $1 million bail. He faces anywhere from 41 to 51 months in prison at sentencing in August. The feds knew they had their man. “As a union official, Lopez was charged with looking out for the welfare of his members,” said U.S. Attorney Loretta Lynch. “Instead he put himself first and brazenly stole money that was intended to pay for health care expenses of union members and their beneficiaries.” She and her staff also have unfinished business. A former New York City cop-turned-union contractor, Francis Mazzella, and a benefit fund trustee, Robert Fabrizio, also had been charged with fraud in the Lopez case. Each is cooperating with authorities.