EX-BOSS OF LABORERS LOCAL 5 INDICTED IN $470,000 UNION FRAUD
CHICAGO – The former boss of a south suburban local of the Laborers Union was arrested today after a federal grand jury returned a 28-count indictment charging him with racketeering and fraud for allegedly stealing more than $470,000 in union funds for himself and others and covering up his crimes- The defendant, Frank B. Zeuberis, was president and business manager of Chicago Heights-based Local 5 of the Laborers International Union of North America (LIUNA), A.FL-CIO, from April 1994 to October 1998. Zeuberis, 54, of 9634 Keilman St. John, Ind., was arrested this morning at his home and was scheduled to appear today before a federal magistrate in Hammond, Ind., announced Scott R. Lassar, United States Attorney for the Northern District of Illinois.
The indictment alleges that Zeuberis dominated and controlled the financial and other affairs of Local 5 throughout the time that he was president and business manager- During the mid-1990s, Local 5 represented approximately 800 members and retirees who were primarily construction workers.
According to the indictment between April 1, 1994 and Oct. 23, 1998, Zeuberis conducted the affairs of Local 5 through a pattern of racketeering that consisted of multiple thefts or embezzlements of thousands of dollars of union money and property. He is also accused of creating
false records to conceal the alleged fraud. The racketeering count charges 30 separate acts in which Zeuberis allegedly granted unauthorized incremental salary and paid vacation increases and bonuses to himself and two other individuals: his wife, Joann Zeuberis and James A. DiForti. According to the indictment, DiForti, who died earlier this year, was appointed by Zeuberis in 1994 as secretarytreasurer of Local 5 and served in that capacity until July 11, 1997. Joann Zeuberis is identified as a former parttime clerical employee of Local 5.
As part of the fraud, Zeuberis allegedly made and caused to be made false executive board and regular membership meeting minutes reflecting non-existent authorizations of salary increases, paid vacation increases, bonuses and vehicle expense reimbursements, including false claims for auto repairs- Zeuberis also allegedly converted a salaried Local 5 business agent’s position to his own use to obtain $5,000 front an unnamed appointee.
In addition to one count of racketeering, Zeuberis was charged with 11 counts of stealing union funds and 16 counts of keeping false union records. The indictment also seeks forfeiture of $473,106 in proceeds from the alleged racketeering activity.
Mr. Lassar announced the charges with Kathleen McChesney, Special Agent-in-Charge of the Chicago Field Division of the Federal Bureau of Investigation, and J.D. Nichols, Regional Inspector General for Investigations of the U.S. Department of Labor, Office of Inspector General.
The case stems from an investigation that was initially conducted by LIUNA’s Inspector General as part of the international union’s ongoing reform efforts. Since 1995, LIUNA has been working with the Justice Department and the U.S. Attorney’s Office in Chicago to rid itself of the influence or organized crime.
The government is being represented by Assistant U -S. Attorney Mark J. Vogel.
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Racketeering carries a maximum penalty of 20 years in prison and a maximum fine of $250,000, while each count of theft of labor union funds carries a maximum of five years in prison and each count of making false union records carries a maximum of one year in prison and a maximum fine of $10,000. As an alternative maximum fine, the Court may order a fine totaling twice the gross loss to any victim or twice the gain to any defendant, whichever is greater. If convicted, the Court will determine the appropriate sentence to be imposed under the United States Sentencing Guidelines-
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the United States has the burden of proving guilt beyond a reasonable doubt.