NEW YORK - The U.S. government filed a civil racketeering suit in federal court against the Mason Tenders District Council of Greater New York to end an organized crime ring that allegedly depleted millions of dollars from the union's $270 million employee benefits funds.
The suit, filed in U.S. District Court for the Southern District of New York, alleges wrongdoing over 20 years.
More then 26 individuals - some with nicknames like "Louie the Lug,"" Big Mike" and "Malfie" - allegedly wormed into the Mason Tenders District Council and used pension and annuity funds for their own benefit.
The various employee benefit funds cover about 7,000 current and retired laborers, including bricklayers and masons in the New York City area.
The suit marks the first time the government has used both the Racketeer Influenced and Corrupt Organizations statute and the 1974 Employee Retirement Securities Act in the same case.
With this latest suit, the U.S. attorney's office hopes to disband La Cosa Nostra, a criminal organization that has influenced labor unions, including the Mason Tenders, to extort payoffs in exchange for labor peace, the lawsuit said.
One of the largest claims leveled against the pension fund involves overpaying for several properties.
In February 1990, trustees to the pension fund lent $15.9 million to Ronald Miceli, an associate of the Genovese organized crime family, in order to buy an office building in New York, the suit contends.
Meanwhile, two organized crime members allegedly created overblown real estate appraisal of $15.9 million and $16 million for the property.
In February, Mr. Miceli purchased the building for nearly $7.5 million, and allegedly pocketed the surplus $8.4 million, the suit said.
In November 1990, the same pension trustees authorized the pension fund to purchase Mr. Miceli's office building for $24 million, the lawsuit said.
Ten months later, the fund invested $4.5 million in renovations to the building. After the renovations were completed, an independent real estate firm valued the building at only $5 million, the lawsuit said.
The U.S. attorney's office claims the pension fund trustees violated pension law in making an investment in the building that was not in the sole interest of the pension fund beneficiaries. The suit also contends trustees knowingly participated in a fiduciary breach.
A second real estate deal involved eight Brooklyn properties appraised at inflated prices, the suit contends. By February 1990, the pension fund paid $3.4 million for the eight buildings, which independent appraisers valued at $2.4 million.
One of the buildings, for which the fund paid $232,000, was condemned by the city of New York and torn down.
Other wrongdoings include kickbacks to trustees and others from the funds' professional service providers according to the suit. The lawsuit alleges union officials and Genovese and Luchese organized crime families profited from illegal payoffs.
What's more, the lawsuit alleges that in exchange for payoffs, union officials allied with organized crime allowed contractors to fudge collective bargaining agreements and to avoid employing union workers.