Union benefit officials in New York City sentenced over theft of health plan assets

Archived News Release — Caution: Information may be out of date.

New York — Officials of the Local 23 Fringe Benefit Fund in New York City were sentenced December 14 by the Southern District Court of New York to incarceration and were ordered to repay $150,000, and undergo three years of supervised release after serving their prison terms.

Manuel Moscoso, the fund’s trustee, was sentenced to one year in prison while fund secretary Jadwiga Grace was sentenced to nine months in prison. In addition, the defendants will be placed on supervised release for 3 years and agreed to forfeit $80,000 and $70,000 respectively.

The defendants were arrested on a criminal complaint December 20, 2006, and pled guilty to one count of theft or embezzlement in connection with a health plan and one count of conspiracy to commit theft or embezzlement in connection with a health plan.

The embezzlement included improper salary compensation, excessive bonuses, un-documented overtime, improper reimbursement for office expenses and supplies, and undocumented withdrawals from the fund’s checking account. This account was largely funded by deductions from the union members’ salaries.

Moscoso and Grace used the money to pay for personal credit card bills, electronic supplies, guns and other non-union related expenses.

“We will not tolerate stealing money from workers’ benefit plans,” said Bradford P. Campbell, Assistant Secretary of the Labor Department’s Employee Benefits Security Administration (EBSA). “This case sends a clear message that theft of employee benefit plan assets is a serious crime that will be prosecuted to the full extent of the law.”

The case was investigated by the department’s New York regional offices of EBSA and the Office of Inspector General and prosecuted by the U.S Attorney’s Office for the Southern District of New York. An indictment is the method by which a person is charged with criminal activity and raises no inference of guilt. As in all criminal cases, each defendant is presumed innocent until proven guilty beyond a reasonable doubt.

(U.S. v. Moscoso)

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Archived News Release — Caution: Information may be out of date.