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Embezzlement in Unions Around the U.S.

Legal Blog

Unions have a purpose to protect workers. They give workers a powerful voice heard by employers. However, there is some discussion going around about the potential for problems that can come from a powerful union. One of these issues is embezzlement. Embezzlement can be a tricky situation with all of the money that flows into unions. Examining the rise of embezzlement in unions around the country can help to put this issue in perspective.

What is Embezzlement?

Embezzlement is an action where a person takes in money for a business or other entity, and instead of putting it into the correct account, keeps it for themselves. In the case of embezzlement in unions, money comes in from union dues. In one such case, the union was taking money for one legitimate purpose and stealing it to purchase personal gifts.

Why Is Embezzlement in Unions Rising?

There have been 300 unions that have discovered theft in the past two years. That’s a significant amount. Even more astounding is that in many of these cases several people are part of the situation with embezzlement rather than just one person. It may seem like a problem that’s only hitting large unions, but in fact, it happens commonly all across the country in large and small areas.

Many times, the embezzlement has been going on for years before discovery. Often, the person or people that took part are typically members of the organization that everyone likes. Usually, it’s the treasurer, bookkeeper or president actions that come to light. Often, this situation’s discovery is through a routine audit, or someone sees a discrepancy in the accounts when the person is on vacation or has left the position.

Some explain that embezzlement is happening now because non-financial professionals are in positions handling union finances. Votes often appoint many union positions. This methodology may put someone without experience in charge of large amounts of money.  

What Are Some High Profile Cases of Embezzlement in Unions?

When it comes to cases regarding embezzlement in unions, there is no shortage of high profile cases to use as examples.

In February 2017, the business manager of Washington, D.C.’s Laborers Local 657 was sentenced to four years in prison. Plus, they have to pay back 1,632,00 in restitution. In this case, two contractors were given prison time and restitution fines.

Charges were levied against an ex-president of the UAW in January 2017. His charges include working with a health insurance broker to embezzle money from the union. They were allegedly working together to take a million dollars from the self-insured health plan of the union. Defrauding Horizon Blue Cross Blue Shield out of 5.5 million dollars is one of the accusations against them. The trial hasn’t been set yet, but they both could see up to 10 years in prison and restitution if found guilty.

In February 2017, the International Longshoremen’s Association Local 970 had their former financial secretary received a lengthy prison sentence. They were convicted of stealing 1,072,660 dollars from the union that they used to purchase toys, shoes, clothing, food, gas, entertainment expenses, and home improvement products.

In June 2014 to the founder of Prim Capital Corp was sentenced to 18 months. They were in charge of the National Basketball Players Association.  Their conviction was for defrauding the union out of three million dollars.

There are a wide variety of unions that experience problems with embezzlement no matter the size. It can appear to the public that only large unions, such as those that cover auto workers, experience these types of issues. That’s not always the case. Teachers, nurses, firefighters, bakery workers, dairy workers, train operators, plumbers, steelworkers, and more have seen embezzlement cases.  

What Are Unions Doing about This?

Unions are experiencing a time period where they are not overly popular. Any negative publicity is a tremendous blow to a union. This is both externally from the public and internally from members. More unions are seeking to take decisive action when there’s the possibility of embezzlement occurring. As a result, strict regulations regarding financials and audits can help discover this type of crime early on in the process before it becomes such a large issue to handle.

What Should You Do If Suspected of Embezzlement?

In conclusion, the first thing that you need to do is to seek legal counsel that’s familiar with the prosecution of this crime. An experienced attorney can help you to determine which course of action to take next. This accusation is a dire situation that could result in the loss of your job, the potential of having a difficult time finding a job in the future, fines, and even a prison sentence. It’s vital for you to protect yourself with legal help from the very beginning of this situation.

Have you been accused of embezzlement in a union? Contact the Law Office of Douglas Herring today to discuss your situation.

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