Chicago contractor indicted for stealing from union employee benefit plans

Archived News Release — Caution: Information may be out of date.

Chicago - On Thursday December 18 a federal grand jury in Chicago, Illinois, indicted Beny Garneata for embezzlement and false statements related to the employee benefit plans of the Chicago Journeymen Plumbers’ Union Local 130 and the International Brotherhood of Electrical Workers Union Local 134.

“The Department of Labor is committed to protecting workers’ benefit plans, and we will not tolerate criminal activity,” stated Bradford P. Campbell, assistant secretary of the Labor Department’s Employee Benefits Security Administration (EBSA).

According to the indictment, Garneata is the owner and operator of M3 Plumbing Inc. (M3), and M5 Electrical Contractors Inc. (M5). M3 is a signatory contractor subject to the terms and conditions of collective bargaining agreements with the Chicago Journeymen Plumbers’ Union Local 130 (Local 130). M5 is a signatory contractor subject to the terms and conditions of collective bargaining agreements with the International Brotherhood of Electrical Workers Union Local 134 (Local 134).

The indictment alleges that between January 2004 and April 2008, Garneata paid his M5 employees with cash to avoid reporting hours and wages and paying required benefit contributions to the employee benefit plans. As a result of the cash payments, at least $250,000 in employer contributions were not made to the employee benefit plans of Local 134.

The indictment also alleges that between January 2007 and April 2008, Garneata employed a similar scheme at M3, whereby he paid his M3 employees with cash and/or personal checks to avoid reporting hours and paying required benefit contributions to the employee benefit plans. As a result of the cash payments, at least $70,000 in employer contributions were not made to the employee benefit plans of the Local 130.

The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The investigation is being worked jointly by the U.S. Department of Labor’s Office of Inspector General and Employee Benefits Security Administration, the Federal Bureau of Investigation, U.S. Postal Inspection Service, City of Chicago Inspector General’s Office, and the Internal Revenue Service’s Criminal Investigation Division. The case is being prosecuted by the U.S. Attorney’s office in the Northern District of Illinois.

In the last eight years, EBSA has achieved record-breaking cumulative monetary results of $11.9 billion for pension and other employee benefits plans. During that same time, 907 individuals were indicted for crimes related to employee benefit plans.

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