Nearly 30 Indiana Carpenters Sentenced for $500K+ Benefit Fraud

The defendants came into the courtroom in large volume, but the judge was more than up to the task. On November 19, fully 27 members of local unions affiliated with the Indiana/Kentucky/Ohio Regional Council of the United Association of Carpenters and Joiners were sentenced in U.S. District Court for the Northern District of Indiana for defrauding the council’s health care program out of a combined $531,422.68. Though court records do not indicate any prison sentences, the defendants, all of them Indiana residents, were ordered to pay restitution. The actions follow a joint investigation by the U.S. Labor Department’s Office of Inspector General and Employee Benefits Security Administration, assisted by Indiana state officials.

According to prosecutors, each of the accused union members had filed fake claims for medical expenses with the Greenwood, Ind.-based council. One of them, Luka Kljajic, who pleaded guilty this July, during 2012-14 had coached various fellow members on how to file for reimbursements for nonexistent services, often submitting the claims on their behalf. Eventually, the Department of Labor uncovered this scam, and each of the defendants pleaded guilty to one count of theft. “We will continue to work with the U.S. Labor Department’s Employee Benefits Security Administration and our law enforcement partners to protect the integrity of employee benefit plans,” said James Vanderberg, Special Agent-in-Charge, Chicago Region, DOL’s Office of Inspector General.