New York City Painters Contractor Sentenced for $400K Fraud

Given what he took, Francis Mazzella is lucky he’s not headed for prison. On June 7, Mazzella, a contractor with a collective bargaining agreement with Metal Polishers Local 8A-28A, an affiliate of the International Union of Painters and Allied Trades (IUPAT), was sentenced in U.S. District Court for the Eastern District of New York to three years of probation and ordered to pay full restitution for defrauding the Queens-based union of more than $400,000 in scheduled benefits. He had pleaded guilty back in February 2012 to one count each of wire fraud and mail fraud. The actions follow a joint investigation by the IRS and the Labor Department’s Office of Labor-Management Standards and Employee Benefits Security Administration.

Metal Polishers Local 8A-28A, with roughly 1,400 members, had been beset with corruption for years. Former President Hector Lopez had been charged with conspiracy to commit mail fraud, wire fraud and tax fraud related to his receipt of illegal kickbacks from the union health and welfare plan via a third-party administrator in return for assurances of retaining the contract. He also evaded around $100,000 in federal income taxes and structured more than $80,000 in bank cash deposits. Lopez was arrested and indicted in September 2012 and eventually pleaded guilty in April 2013 to conspiracy and tax fraud. He was sentenced to four years in prison, and ordered to pay the union more than $800,000 and forfeit another $370,000 to the government.

Lopez’ troubles became those of Mazzella and another individual, Robert Fabrizio, during a court battle over the local’s attempt to disaffiliate from IUPAT. In seeking to block the disaffiliation, the parent union requested that the Department of Labor audit the local books. The DOL concluded from its review that not only was Lopez corrupt, so were Mazzella and Robert Fabrizio, a contractor who also served as a benefit plan trustee. Mazzella’s electrical services firm, City-Wide Control Systems, rather than perform promised renovation work, gave the job to Fabrizio’s firm, Three Generations, and then inflated invoices to conceal the latter’s involvement. In return, an unnamed third-party administrator of the benefit fund provided Fabrizio with kickbacks totaling over $740,000 over a seven-year period via a shell company Fabrizio controlled. Fabrizio would be convicted of money-laundering and influence-peddling. This March he was sentenced to eight months in prison and a year of probation and also was ordered to make full restitution.