New Hampshire Asbestos Abatement Company Pleads Guilty to Defrauding Union Benefit Funds
BOSTON – An asbestos removal company pleaded guilty today in connection with an illegal “double breasted shop” scheme aimed at enabling them to defraud the Massachusetts Laborers Benefit Fund (MLBF). In this case, the company utilized a second corporate entity to pay union members at non-union rates without union benefits.
AQE, Inc. of Windham, NH, pleaded guilty to 18 counts of mail fraud, one count of benefit fund embezzlement, and 18 counts of filing false documents with an ERISA fund, after being indicted in January of 2016. U.S. District Court Judge Patti B. Saris scheduled sentencing for May 4, 2017.
AQE, Inc. employed members of the Tewksbury Local 1421 of the Laborers International Union of North America. It paid members of Local 1421 for jobs which required union participation from the AQE, Inc. payroll which was a union signatory corporation. When the jobs did not require a union signatory company, union members were paid from the payroll of Air Quality Experts, Inc.—a separate entity used as part of AQE, Inc.’s single business. In these instances, union members did not receive union rates, and benefits were not paid by AQE, Inc. to the MLBF, which provides medical and pension benefits to 8,000 laborers and their families in Massachusetts. AQE, Inc. sent “remittance reports” to the MLBF which failed to report thousands of hours worked by members of Local 1421. By significantly under reporting the hours worked by union members, AQE, Inc. failed to pay hundreds of thousands of dollars to the MLBF.
AQE, Inc. has agreed to pay $500,000 in restitution to the MLBF as part of the plea.
The charging statutes each provide for a sentence of at least one year, and no greater than five years of probation, a fine of $500,000 or twice the loss or gain from the offense, and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Cheryl Garcia, Special Agent in Charge of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, New York Region; and Susan Hensley, Regional Director of the Department of Labor, Employee Benefits and Security Administration, made the announcement today. Assistant U.S. Attorneys Fred M. Wyshak, Jr. and Ryan M. DiSantis, of Weinreb’s Public Corruption Unit, are prosecuting the case.