Contractors, Steward Sentenced for Defrauding NYC Teamsters at World Trade Center Site

When the Port Authority Terminal at the World Trade Center in Lower Manhattan reopened this past February 25, at least a few of the people involved in this challenging and emotionally-charged project couldn’t be on hand. They included brothers Gerardo and Vincent Fusella, owner-operators of a New Jersey-based trucking company, and Willie Spikes, a steward for International Brotherhood of Teamsters Local 282. Over the last year or more, the three pleaded guilty in Brooklyn, N.Y. federal court for their roles in diverting more than $1 million in union member wages and benefits to themselves. Each subsequently was sentenced. The Fusellas had been named in a 31-count criminal indictment in December 2011 following a lengthy multi-agency investigation.

Union Corruption Update described this case back in February 2012 following the indictments. Gerardo (“Jerry”) and Vincent Fusella, at the time, ages 36 and 30, ran a trucking firm, the Fusella Group LLC, based in East Hanover (Morris County), N.J. Their specialty was transporting dirt and debris between construction sites and landfills. During 2007-08, the pair, acting on behalf of their company, entered into a collective bargaining agreement (CBA) with Teamsters Local 282 to perform subcontracting work. One of the projects was hauling material from the World Trade Center reconstruction site whose buildings and infrastructure had been destroyed by the Islamic terrorist attacks of September 11, 2011. The Fusella brothers saw an opportunity to line their pockets.

According to federal prosecutors, the Fusellas during 2007-09 routed wages and benefits to their business by submitting certifications that falsely indicated they had made these payments to employees at the Port Authority of New York and New Jersey World Trade Center Transportation Hub Project work site. The brothers had help from a then-unnamed union shop steward, Willie Spikes. They paid Spikes to hide actual weekly driver work hours and then shifted assets of Fusella Group LLC to a nonunion firm, Alpine Investment Group, so as to avoid making scheduled benefit contributions. Employees lost more than $1 million in potential income and benefits. This was a classic “double-breasting” scheme in which a contractor operates a dual union-nonunion shop to avoid CBA requirements. The two companies, in fact, used the same drivers, mechanics and office employees. The Fusellas also evaded income and Social Security taxes by misclassifying trucker employees as “independent contractors.” The Social Security payroll tax evasion alone amounted to more than $150,000.

Eventually, a suspicious U.S. Labor Department’s Office of Inspector General conducted a probe. Joining the investigation were the U.S. Department of Transportation, the IRS, the Port Authority of New York and New Jersey, and the New York City Business Integrity Commission. The investigation bore fruit. On December 21, 2011 a federal grand jury handed down a 31-count indictment, which a Brooklyn federal court unsealed the next day. Vincent Fusella was the first to go down. He pleaded guilty on February 27, 2013 to tax evasion conspiracy. A little over a week later, on March 8, 2013, Jerry Fusella pleaded guilty to embezzling payments meant for union pension and other benefit plans. As part of the plea, he agreed to forfeit $970,755. Each was sentenced last October 13. Vincent Fusella received a modest two-month prison sentence. Jerry Fusella, the more serious offender, got a 46-month prison term. Willie Spikes eventually pleaded guilty to falsifying reports that cost workers more than $400,000 in wages and benefits. He was sentenced this January 31 to time served and a year of supervised release, and ordered to pay $226,037 in restitution. Unrelated to the union fleecing scheme, court records also show that the Fusellas avoided $425,780 in tolls and related penalties. The World Trade Center reconstruction is a noble undertaking, but not because of these fellows.