Iowa Insulators Business Manager Sentenced for Fraud, Embezzlement

Theodore Watson developed two streams of side income over nearly a decade: his union and a charity. Neither was legal. On September 17, Watson, former business manager for International Association of Heat & Frost Insulators and Allied Workers Local 74, was sentenced in U.S. District Court for the Southern District of Iowa to 18 months in prison, plus three years of supervised release, for acts of mail fraud and embezzlement against the Des Moines union and a United Way chapter over nearly a decade. He also was ordered to make restitution of over $125,000. Watson had pleaded guilty in April after being indicted last December. The actions follow an investigation by the U.S. Department of Labor’s Office of Labor-Management Standards.

Now 54, Watson, a resident of Altoona (near Des Moines), Iowa, if nothing else, was inventive in the ways of embezzlement and fraud. According to prosecutors, at various points during 2007-16, he used his Local 74 credit card to make unauthorized purchases and receive unauthorized cash advances, altering monthly statements to conceal the thefts. In addition, he opened a bank account in the union’s name from which he diverted funds for personal use. And he received more than $10,000 in questionable or illegal disbursements, and then concealed this income in a union financial report. Were that not enough, Watson received reimbursement checks in the sums of $19,000 and $18,000 from the United Way of Central Iowa to cover nonexistent union worker “training.” A Labor Department probe led to an overdue indictment and guilty plea. The restitution order at sentencing was for $125,443.24 of which $55,604.91 is payable to Insulators Local 74 and $69,838.33 is payable to the United Way.