Three Union Timekeepers Charged with Wire Fraud in Scheme to Defraud Ports America Baltimore
Claimed Regular and Overtime Hours When They Were Actually on Vacation or At Home
Baltimore, Maryland - A federal grand jury has indicted Williams Richard Zichos, Jr, age 57, of Arnold, Maryland; Dale Martin Kowalewski, age 54, of Reisterstown, Maryland; and Joseph Ross Bell, age 66, of Cockeysville, Maryland, for conspiracy to commit wire fraud and wire fraud, in connection with a scheme to defraud Ports America Baltimore, the stevedore and terminal operator at the Port of Baltimore, announced United States Attorney for the District of Maryland Rod J. Rosenstein.
According to the 74 count indictment, Zichos, Kowalewski and Bell were employed by Ports America as timekeepers with International Longshoremen’s Association (ILA) Local 953, which was the local union for steamship checkers, weighers, and timekeepers at the Port of Baltimore. In that capacity, the defendants were required to take attendance of dockworkers assigned to work particular shifts and record the amount of straight (regular) and overtime hours they worked to unload and load cargo vessels berthed at the Port of Baltimore. The defendants were primarily stationed at Building 1200A at the Dundalk Marine Terminal, commonly referred to as the “timekeeper’s shack.” Ports America, the Steamship Trade Association of Baltimore (STA) which processed the payroll for Ports America, and Local 953 relied on the accuracy of the attendance records, time sheets, and payroll information prepared and maintained by the defendants to accurately calculate the amount of hourly wages and fringe benefits due the dockworkers. The timekeepers collected attendance information for the dockworkers before and during the work shifts and recorded it on daily time sheets. Payroll information was recorded and tracked using each worker’s name, port identification number and job description, along with the name of the cargo vessel and the date and length of the work shift and then submitted to a supervisor at Ports America. The timekeepers recorded their own attendance, completed their own time sheets and entered their own payroll data for the shifts they were assigned to work.
The timekeepers worked under the ILA Local 953 collective bargaining agreement. Under the agreement, part of the hourly fringe benefits Ports America paid to the timekeepers went into the STA-ILA Pension and Benefits Fund, which administered a Weekly Accident and Sickness Benefit plan (“A & S Plan”). Under the A & S Plan, if an active and eligible timekeeper was unable to work because of an illness or non-occupational injury, he was entitled to receive weekly payments from the Plan until he was well enough to return to work. Additionally, the agreement provided for vacation pay in the form of quarterly lump-sum payments, the size of which would increase based on the number of hours worked over a specified minimum number of hours. Because the agreement provided a lump-sum payment in lieu of vacation leave, a timekeeper had the option of taking time off from work without pay to spend his accrued payments on a vacation or he could choose not to take time off from work and spend his accrued vacation pay any way he chose.
The indictment alleges that from October 2004 to February 2008, Zichos, Kowalewski and Bell certified to Ports America and the STA that one of the codefendants was present at the Port of Baltimore working as a timekeeper during a particular shift when in fact the codefendant was elsewhere. The defendants entered false information into Ports America’s payroll database to inflate the number of hours for which an absent codefendant was to be paid wages and fringe benefits. Zichos, Kowalewski, and Bell received hourly wages and benefits while they were on vacation, in addition to accepting their vacation lump-sum payments.
For example, according to the indictment Bell submitted wage and hour information which falsely represented that Zichos had worked straight and overtime hours at the Dundalk and Seagirt Marine Terminals when in fact he was vacationing in Paris, France; piloting his boat from Fort Myers, Florida to Maryland; vacationing in San Jose, Costa Rica; and when Zichos was on board a European cruise. The indictment further alleges that Zichos and Bell submitted wage and hour information which falsely represented that Kowalewski had worked straight and overtime hours at the Dundalk and Seagirt Marine Terminals when Kowalewski was in fact vacationing in: Paris, France; Orlando, Florida; Reykjavik, Iceland; and Las Vegas, Nevada. Finally, the indictment alleges that Zichos and Kowalewski submitted wage and hour information which falsely represented that Bell had worked straight and overtime hours at the Dundalk and Seagirt Marine Terminals on several occasions when Bell was either in the hospital or at home recovering from surgery. The indictment alleges that through this scheme the defendants caused Ports America to pay wages and benefits of approximately $41,656 for hours they did not work.
The defendants face a maximum sentence of 20 years in prison and a $250,000 fine on each count. No court appearance has been scheduled for the defendants.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein thanked the U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations for their investigative work. Mr. Rosenstein commended Assistant United States Attorneys Martin J. Clarke and Stephen M. Schenning, who are prosecuting the case.