2018-09-26 DOJ SDNY press_release 119 KB 6,624 chars

Former President Of Labor Union Pleads Guilty To Participating In Embezzlement And Kickback Scheme

Caption: United States v. Rocco Fazzolari, et al.

summary

Rocco Fazzolari, former president of a labor union and trustee of its benefit plan, pled guilty to embezzling over $1.3 million through personal misuse of funds and a kickback scheme with a vendor, resulting in a 13-year employment ban, $941,828 forfeiture, and restitution.

paragraph

Rocco Fazzolari pled guilty to three counts—embezzlement from a labor organization, embezzlement from an employee benefit plan, and conspiracy to embezzle—after stealing over $1.3 million from union and plan funds. He used union money to pay for personal expenses including spa treatments, a second car, and credit card charges, then 'reimbursed' the union with $89,000 from the employee benefit plan meant for healthcare. He also orchestrated a kickback scheme by routing over $1.1 million to Acclaim Administrators, Inc., which provided no services, and received the majority of those funds back as illicit payments.

narrative

Rocco Fazzolari, former president of a labor union and trustee of its employee welfare benefit plan, pled guilty to embezzlement and conspiracy for orchestrating a multi-year fraud scheme that stole over $1.3 million from union and plan funds. From 2012 to 2016, he used union money to pay for personal expenses—including spa treatments, a gym membership, a second vehicle, medical bills, and credit card charges—and then 'reimbursed' the union with over $89,000 from the employee benefit plan, which was established to provide healthcare to union members. Simultaneously, from 2000 to 2016, he conspired with a co-conspirator to funnel over $1.1 million in Plan funds to Acclaim Administrators, Inc., a company that provided no legitimate services, with the majority of those payments returned to Fazzolari as kickbacks. As part of his plea agreement, Fazzolari agreed to a 13-year ban from employment with any labor union or employee benefit plan under 29 U.S.C. §§ 504 and 1111, forfeit $941,828, and pay restitution to the Union and Plan. He was charged with three felony counts, each carrying a maximum five-year prison sentence, and was scheduled for sentencing on January 28, 2019. The U.S. Department of Labor and Justice Department emphasized that his actions betrayed the fiduciary duty owed to union members and undermined the integrity of employee benefit plans protected under ERISA.

Enriched metadata

Scheme: affinity-fraud (95%)
Court: Southern District of New York
Outcome: pleaded
Victim loss: $1,300,000

Classified affinity-fraud(confidence 95%). EDGAR detection: forms Form D· recall 58% / precision 2%. detection rule →

Extracted insights

Dollar amounts 6

$1.30M $1.3 million $1M–$10M
$1.10M $1.1 million $1M–$10M
$1.00M $1 million $1M–$10M
$942K $941,828 $100K–$1M
$128K $128,000 $100K–$1M
$89K $89,000 $10K–$100K

Entities 4

scheme_term a kickback scheme
scheme_term participating in a kickback scheme
person rocco fazzolari
person union assets

Triples 10

Rocco Fazzolari pled guilty to embezzling from the Union and the Plan
Rocco Fazzolari pled guilty to participating in a kickback scheme
Rocco Fazzolari illegally obtained more than $1.3 million
Rocco Fazzolari pled guilty before United States District Judge Analisa Torres
Rocco Fazzolari abused his position as president of a labor union
Rocco Fazzolari embezzled funds
Rocco Fazzolari engaged in a kickback scheme
Rocco Fazzolari stole union assets
Rocco Fazzolari served as president of a labor union
Rocco Fazzolari served as trustee of the Union’s employee welfare benefit plan

View original DOJ press releasejustice.gov

Extracted body text (6,624c)

Press Release Former President Of Labor Union Pleads Guilty To Participating In Embezzlement And Kickback Scheme Wednesday, September 26, 2018 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Michael C. Mikulka, Special Agent-in-Charge, New York Region, U.S. Department of Labor Office of Inspector General (“DOL-OIG”), Thomas Licetti, Acting New York Regional Director, U.S. Department of Labor Employee Benefits Security Administration (“DOL-EBSA”), and Andriana Vamvakas, New York Regional Director, U.S. Department of Labor Office of Labor-Management Standards (“DOL-OLMS”), announced that ROCCO FAZZOLARI, who previously served as the president of a labor union (the “Union”) and a trustee of the Union’s employee welfare benefit plan (the “Plan”), pled guilty today to embezzling from the Union and the Plan and to participating in a kickback scheme involving the Plan. Through these embezzlement and kickback schemes, FAZZOLARI and a co-conspirator illegally obtained a total of more than $1.3 million from the Union and the Plan. FAZZOLARI pled guilty before United States District Judge Analisa Torres. U.S. Attorney Geoffrey S. Berman said: “Rocco Fazzolari abused his position as the president of a labor union to line his own pockets. As he admitted today, he embezzled funds and he engaged in a kickback scheme that cost an employee benefit plan – which was established to provide medical care for union members – more than $1 million. Our Office is committed to prosecuting those who misuse positions of trust for their own gain.” DOL-OIG New York Region Special Agent-in-Charge Michael C. Mikulka said: “While president of a labor union, Rocco Fazzolari stole union assets to pay for lavish personal items, including designer clothing, spa treatments, and a second vehicle for his family, betraying the members of the union. We will continue to work with our law enforcement partners and the U.S. Department of Labor’s Office of Labor-Management Standards and the Employee Benefits Security Administration to protect the financial integrity of labor unions and their benefit plans.” DOL-EBSA Acting New York Regional Director Thomas Licetti said: “Plan administrators and trustees of union sponsored health plans have a fiduciary obligation under ERISA to provide health benefits to union members and plan participants. In this case, the plan administrator intentionally broke that promise in order to serve his own interest. EBSA will pursue strong enforcement action against those responsible for depriving employees of the benefits to which they are entitled.” DOL-OLMS New York Regional Director Andriana Vamvakas said: “Combatting financial fraud and investigating embezzlement of union funds helps safeguard financial integrity in labor unions. This is a major priority for the U.S. Department of Labor’s Office of Labor-Management Standards. We will work with our investigative partners to identify criminal violations and pursue appropriate legal action whenever anyone puts personal financial gain ahead of the best interests of union members.” According to the allegations in the Information to which FAZZOLARI pled guilty, public court filings, and statements made in court: From at least in or about 2012 through in or about June 2016, FAZZOLARI repeatedly used Union funds to pay for his personal expenses, including payments for spa treatments, a gym membership, a second car, medical expenses, dues for an actors’ union, personal credit card charges, and ATM cash withdrawals. FAZZOLARI then “reimbursed” the Union with funds from the Plan. The Plan was established to provide, among other things, medical, surgical, and hospital care or benefits to Union members. In total, FAZZOLARI embezzled more than $128,000 from the Union over approximately four years, and improperly transferred more than $89,000 from the Plan to “reimburse” the Union. In addition, from at least in or about 2000 through in or about June 2016, FAZZOLARI engaged in a kickback scheme with another individual (“CC-1”). Using Plan funds, FAZZOLARI paid CC-1’s company, Acclaim Administrators, Inc. (“Acclaim”), more than $1.1 million for purported services, even though Acclaim did not actually provide the Plan with these services. CC-1 then kicked back the vast majority of these payments to FAZZOLARI. Under the terms of his plea agreement, FAZZOLARI has agreed to a 13-year ban, pursuant to 29 U.S.C. §§ 504 and 1111, which generally prohibits him from, among other things, being employed by a labor union or employee benefit plan. FAZZOLARI has also agreed to forfeit $941,828 and to pay restitution to the Union and the Plan. * * * ROCCO FAZZOLARI, 58, of Manhasset Hills, New York, pled guilty to three counts: embezzlement from a labor organization, embezzlement from an employee benefit plan, and conspiracy to embezzle from an employee benefit plan, each of which carries a maximum sentence of five years in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. Sentencing before Judge Torres is scheduled for January 28, 2019, at 11:40 a.m. Mr. Berman praised the Department of Labor’s Office of Inspector General, Employee Benefits Security Administration, Office of Chief Accountant, and Office of Labor-Management Standards for their outstanding investigative work. Mr. Berman also thanked the Federal Bureau of Investigation and the Department of Justice’s Labor-Management Racketeering Unit of the Organized Crime and Gang Section for their assistance in this case. This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Michael D. Neff is in charge of the prosecution. Updated September 26, 2018 Topic Financial Fraud Component USAO - New York, Southern Press Release Number: 18-325

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