Chicago Union Boss, a Reputed Mobster, Indicted for Social Security Fraud

John Matassa lived in the overlapping worlds of organized labor and organized crime. He slipped up when he tried to retire. On May 25, Matassa, secretary-treasurer of the Independent Union of Amalgamated Workers Local 711, was indicted in U.S. District Court for the Northern District of Illinois on 10 criminal counts related to his applying for and receiving Social Security benefits under fraudulent pretenses. According to various investigators and witnesses in other cases, the defendant is a made man in the Chicago Mafia, better known as “the Outfit.” The indictment follows an investigation by the Social Security Administration and the Labor Department. At his arraignment the following week, Matassa pleaded not guilty to all counts. U.S. District Judge Matthew Kennelly set him free without having to post bond.

John “Pudgy” Matassa Jr., now 65, a resident of Arlington Heights, Ill., was a union official with a past. Until the late Nineties, he headed a local affiliate of the Laborers International Union of North America (LIUNA). That’s when the international union kicked him out; federal authorities had determined that he was close with the Chicago underworld. Veteran Mafia watchers say Matassa occupies a high rung on the Outfit ladder because many of its capos and soldiers are either dead, imprisoned or infirm. His name surfaced during the 2009 trial of a deputy U.S. marshal, John Ambrose, who would be convicted of leaking sensitive information exposing a protected witness to mob retaliation. The trial was part of a federal mob crackdown dubbed Operation Family Secrets. Matassa allegedly had been working as a go-between for Chicago mob boss James “Little Jimmy” Marcello. Thanks to testimony from Outfit turncoat Nicholas Calabrese, the feds were able to put away a number of mobsters.

John Matassa managed to avoid prosecution in that one, but he remained a union man. No longer in LIUNA, he would form and run International Union of Amalgamated Workers Local 711. The union represented various workers in Illinois, Indiana and Wisconsin. He seemed to run a clean union; he had little choice. But he came up with an unorthodox, and illegal, retirement plan. According to prosecutors, Matassa in February 2013 hired his wife, Lynn, for a no-show union job. He also falsified the minutes of a Local 711 board meeting to make it appear as though the board had approved the hiring. He also lowered his own salary so he could apply for early retirement benefits from the Social Security Administration (SSA) Old Age Insurance program. Matassa, said authorities, personally signed his wife’s union paychecks and then deposited them into a bank account in the couple’s name. And once the SSA approved Matassa’s application, it wired payments.

Federal officials eventually sensed something was wrong. Why would a labor leader with known mob ties voluntarily reduce his compensation and put his wife on the payroll? The Social Security Administration and the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General launched a probe. Their conclusion: John Matassa was ripping off both the government and the union. They handed the case to the Justice Department, which reached the same conclusion. This past May 25, a Chicago grand jury returned a 10-count indictment consisting of: two counts of wire fraud; two counts of theft of government funds; four counts of embezzlement from a labor organization; and two counts of making false entries in union financial records.

A trial is tentatively scheduled for March 26, 2018. Assistant U.S. Attorney Richard Rothblatt expressed concern that Matassa remains in control of Local 711 funds and has ongoing communication with potential witnesses. But U.S. District Judge Matthew Kennelly decided to delay any order that would restrict Matassa’s duties as a union official. One wonders where Matassa would operate. According to Labor Department records, the 189-member union for the last several years has been based at 119 South Emerson in Mt. Prospect, Ill. Yet that address is a UPS mailbox store. No other address exists. Local 711 isn’t even listed as a member of the Chicago Federation of Labor. This is one strange union.