Business Manager of Washington, D.C. LIUNA Local Sentenced

Anthony Frederick Sr. used his union as a private bank to fund various projects. For now, his only project is incarceration. Two days ago, on February 7, Frederick, former business manager of Laborers International Union of North America Local 657, was sentenced in District of Columbia federal court to four years in prison, and ordered to pay full restitution, for embezzling more than $1.7 million from the formerly Washington, D.C.-based union, which represents about 1,650 workers in Washington, D.C. and several surrounding Maryland and Virginia counties. Frederick had pleaded guilty on November 1. Two other persons, Gary Cooper and Christopher Kwegan, also were convicted in the scheme, the result of a probe by the FBI and the Labor Department.

Union Corruption Update twice has reported on this case. Frederick, now 50, a resident of Upper Marlboro, Md., had served as LIUNA Local 657 business manager for about a decade. But during May 2013-June 2014 he fleeced his union out of over $1.7 million, aided by a pair of outside men, Cooper and Kwegan. According to federal prosecutors, Frederick diverted local funds to a Greenbelt, Md.-based firm, STS General Contracting, under the guise of building a local training center and renovating the union hall. The recipients, STS principal owner Gary Cooper, 58, and area real estate agent and STS co-owner Christopher Kwegan, 59, applied about $225,000 of that sum toward a down payment on the construction of a garage on residential property Frederick recently had acquired, plus more than $600,000 to Frederick’s wife to give her a 50 percent stake in another construction company owned by Cooper. Kwegan and Cooper also withdrew more than $525,000 worth of checks and cash from an STS bank account whose only depositor was LIUNA Local 657. They routed $172,000 of that sum to a Qatar-based electrical engineering services company and kept the rest, spending much of it on shopping, travel and other personal sundry items.

The scam fell apart following a routine internal audit. Union officials, recognizing a cash shortfall, reported the discrepancies to the FBI and the U.S. Labor Department’s Office of Inspector General and Office of Labor-Management Standards. Formally, Laborers Local 657 is no more. Bankrupted by the thefts, it has merged into Laborers Local 11 in Northern Virginia. Frederick is now part of the prison system, and the other defendants soon will join him. Kwegan has reserved the right to ask for a 27-month prison term, the same sentence he received that month in an unrelated “straw buyer” mortgage scheme in Baltimore. Cooper, convicted by a jury in November, is set for sentencing late this month. All in all, the money doesn’t seem to have been worth the trouble.