June 26, 2007 -
PHILA. ELECTRICIAN INDICTED FOR AN ILLEGAL CASH PAYROLL, STEALING FROM UNION
BENEFITS PLAN, AND
MAKING ILLEGAL PAYMENTS TO UNION OFFICIAL
United States Attorney Pat Meehan announced that Donald Dougherty, Jr, president of Dougherty Electric, Inc. in Philadelphia, was charged today with operating an illegal cash payroll, stealing from a union benefits plan, and making illegal payments to a union official. A federal grand jury also indicted Donald Dougherty for bribing a bank official, illegally including the relative of a union official in his employee health plan, and tax evasion. Joining Meehan in today’s announcement were J.P. Weis, Special Agent-in-Charge of the Federal Bureau of Investigation; William Turpin, Special Agent-in-Charge of the U.S. Dept. of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations; Peter Alvarado, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division; and Mabel Capolongo, Regional Director, U.S. Dept. of Labor, Employee Benefits Security Administration.
According to the indictment,* between 2001 and 2005, Donald Dougherty allegedly stole more than $869,000 from International Brotherhood of Electrical Workers (IBEW) Local 98's employee benefit plan while maintaining an “under the table” cash payroll of more than $2.6 million for himself and his employees. By operating in cash, Donald Dougherty avoided paying more than $1.6 million in federal, state, and local payroll taxes plus the required employer contributions to Local 98's benefit plans. The indictment alleges that Donald Dougherty failed to report the cash payroll to the Internal Revenue Service and that he filed false tax returns for the years 2002, 2003, and 2004.
The indictment also alleges that Donald Dougherty made illegal payments
to a union official. Donald Dougherty allegedly sold a Wildwood, NJ condominium
to an official of the IBEW Local 98 for $20,000 under market value and performed
$115,600 work of renovations on the official’s personal residence.
An invoice for the renovations was submitted only after Donald Dougherty’s
offices were searched by federal investigators. Federal law prohibits an
employer from offering money or a thing of value to an officer of a labor
organization that represents that employer’s workers. IBEW Local 98
represented and admitted to membership employees of Dougherty Electric. Employers
are permitted to engage in financial transactions with an officer or employee
of a labor organization only if the transaction was “at prevailing
market price in the regular course of business.”
“As the indictment alleges, Donald Dougherty knew that these were ‘sweetheart’ transactions
not made at market value,” said Meehan. “The law recognizes that
a relationship in which an employer provides gifts or services to a union official
who represents that employer’s workers is fertile ground for potential
corruption.”
Donald Dougherty also is charged with bribing a bank official, who
approved more than $5.3 million in loans for, among other things, the construction
and furnishing of his personal residence and the purchase of a property in
Sea Isle City, NJ. Donald Dougherty, who had a low credit score, provided
the bank official with $9,000 worth of electrical and plumbing services for
his residence along with four Super Bowl tickets and accommodations at a
Florida condominium in January 2005.
DEFENDANT |
ADDRESS |
AGE [Date of Birth] |
Donald Dougherty,
Jr. |
Philadelphia, PA
|
1966 |
This case was investigated by the Federal Bureau of Investigation, U.S. Dept. of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, Internal Revenue Service Criminal Investigation Division, and the U.S. Dept. of Labor, Employee Benefits Security Administration. This case has been assigned to Assistant United States Attorney Anita Eve.
| UNITED
STATES ATTORNEY'S OFFICE EASTERN DISTRICT, PENNSYLVANIA Suite 1250, 615 Chestnut Street Philadelphia, PA 19106 |
Contact: RICH MANIERI Media Contact 215.861.8525 |
*An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Benjamin Franklin Photo by B. Krist for the Greater Philadelphia Tourism Marketing Corporation