Also joining COMEY and MAUSKOPF in the announcement were KEVIN P. DONOVAN, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation, GORDON HEDDELL, Inspector General, United States Department of Labor, RAYMOND W. KELLY, Commissioner, New York City Police Department, and J. CHRISTOPHER PRATHER, the Deputy Attorney General jointly appointed by Governor George Pataki and AG Spitzer to head the New York State Organized Crime Task Force.

The Eastern District defendants not already incarcerated will be arraigned this afternoon by United States Magistrate Judge Viktor V. Pohorelsky at the U. S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York. The Southern District defendants not already incarcerated will be arraigned this afternoon by United States Magistrate Judge Henry B. Pittman, in Manhattan federal court, 500 Pearl Street. The Eastern District case has been assigned to United States District Judge Sterling Johnson, Jr.

THE EASTERN DISTRICT INDICTMENT

The 70-count indictment charges 18 defendants, including JOEL J. CACACE, Sr., also known as "Joe Waverly," Acting Boss of the Colombo organized crime family, JOHN J. DEROSS, Colombo family Underboss, VINCENT RICCIARDO, Colombo family soldier, five Colombo family associates, five members of Local 14 and 15, two Local delegates and a former delegate with racketeering and/or related offenses. ⁽¹⁾

According to the indictment, the International Union of Operating Engineers, an AFL-CIO affiliate, has a nationwide membership of approximately 400,000 in 170 local unions throughout the United States and represents, among others, operating engineers who work as heavy equipment operators, mechanics and surveyors in the construction industry. Locals 14 and 15 represent 6000 operating engineers in Manhattan, Bronx, Brooklyn, Queens and Staten Island, New York. The indictment alleges that for approximately three years Colombo family members and associates conspired to extort Locals 14 and 15, and that Colombo family members and associates, working in tandem with certain Local members, engaged in schemes to defraud at various job sites throughout the Eastern District of New York. Additionally, the indictment alleges that the Local 14 and 15 representatives received unlawful labor payments.

Extortion and Extortion Conspiracy. The indictment charges JOEL J. CACACE, Sr., his son, JOEL J. CACACE, Jr., also known as "Jo Jo," JOHN J. DEROSS, also known as "Jackie," his sons JACK J. DEROSS, also known as "John," and JAMIE T. DEROSS, LAWRENCE PERSICO, VINCENT RICCIARDO and PAUL BUCKLEY with conspiring between 1999 and 2002 to extort labor union positions and money paid as wages and contributions to the Locals' benefit plans, conspiring to interfere with the right of Local 14 and 15 members to free speech and democratic participation in the affairs of their labor organization, and conspiring to interfere with the right of the Local members to loyal and responsible representation by their union officers, agents, employees and representatives. The indictment also charges JOEL J. CACACE, Sr., JOEL J. CACACE, Jr., JOHN J. DEROSS and JACK J. DEROSS with extorting Local 14 to transfer CACACE, Jr. into the Local, and RICCIARDO and BUCKLEY with extorting Local 14 for jobs.

Unlawful Labor Payments (Taft Hartley Violations) and Mail Fraud. Former Local 14 business agent, or "delegate," JOSEPH CORIASCO, Local 14 members NICHOLAS LUPARI (CORIASCO's son-in-law) and RICHARD J. TROY, Local 15 delegate THOMAS G. McNAMARA, also known as "Tommy Mac," and Local 15 member ANTHONY POLITO are charged with unlawful labor payments in violation of the Taft Hartley Act and, together with Local 14 member LAWRENCE PERSICO, with mail fraud, in connection with the Brooklyn General Post Office job site in downtown Brooklyn. The Brooklyn GPO is currently undergoing renovation and upon completion is slated to house the Brooklyn Bankruptcy Court and the Office of the United States Attorney for the Eastern District of New York. As part of the mail fraud scheme, the defendants defrauded contractors, real estate holders and developers by submitting false information to contractors at the job site regarding hours worked by certain Local 14 and 15 members and thereby fraudulently obtained wages as well as contributions to the Locals' benefit plans.

For example, the indictment alleges that PERSICO claimed to be working at the Brooklyn GPO during the same period that he was on the payroll and receiving wages from Roadway Contracting, and thereby, according to other court filings unsealed today, fraudulently received contributions in the amount of $220,000 to the Local 14 benefit plans.

The indictment charges similar fraudulent Taft Hartley Act and mail fraud schemes at job sites throughout the city, including Staten Island Yankee Stadium (JOSEPH CORIASCO, THOMAS G. McNAMARA and ANTHONY F. POLITO) and Coney Island Mets Stadium (JOSEPH CORIASCO and Local 15 member ANTHONY QUARANTA); Kingsboro Community College (JOEL J. CACACE, Sr., his son, JOEL J. CACACE, Jr., JOHN J. DEROSS, his son, JACK J. DEROSS, and Local 15 member SEAN F. KILCULLEN); Staten Island University Hospital (JOSEPH CORIASCO and RICHARD J. TROY); P.S. 58, Staten Island (JOSEPH CORIASCO, McNAMARA, POLITO and TROY); Gateway Estates (current Local 14 delegate RICHARD J. CORIASCO); a job site on Muldoon Avenue in Staten Island (RICHARD J. CORIASCO); Marine Park Bridge (JOSEPH CORIASCO and Local 14 member JAMES F. COYLE); Queens Place (JOSEPH CORIASCO and COYLE) and a job site at Beach 53^rd Street in Queens (JOSEPH CORIASCO and COYLE).

Union Benefit Stamp Fraud. The indictment alleges that between 1999 and August 2001, Local 15 member ANTHONY F. POLITO obtained benefit stamps representing hours worked from D. Gangi Contracting Corporation and that thereafter JOHN J. DEROSS's son, "John," fraudulently submitted the stamps to Local 15, not having worked the hours represented.

Illegal Gambling. The indictment charges that between August 2001 and November 2002, VINCENT RICCIARDO and PAUL J. BUCKLEY conducted an illegal gambling business.

Criminal Forfeiture Allegations. The indictment contains two criminal forfeiture allegations, seeking to forfeit any and all properties of the defendants which were involved in or constitute the proceeds of the offenses charged in the indictment. The government also obtained a pre-trial, post-indictment restraining order restraining approximately $500,000 in union benefits of several RICO defendants which the government alleges were illegally obtained as a result of the offenses charged in the indictment. The government investigation revealed that the defendants received at least $2 million from their racketeering activities and participation in the RICO enterprise.

THE SOUTHERN DISTRICT INDICTMENT

The 61-count indictment filed in the Southern District charges 24 defendants, including ERNEST MUSCARELLA, also known as "Ernie," a member of the ruling administration of the Genovese organized crime family, and LOUIS MOSCATIELLO, a Genovese family soldier, 15 family associates, 2 additional members of Local 14 and 15, the Local 14 Business Manager, the former Local 14 Business Manager, and one Local 14 and one Local 15 delegate, with racketeering and/or related offenses. ⁽²⁾

The indictment alleges that for approximately five years the defendants, through the Genovese family's corrupt influence over Locals 14 and 15, committed various crimes, including extortion and mail fraud. The indictment charges that the defendants used their corrupt influence to obtain preferential Local 14 and 15 job assignments, and thereby extorted money in the form of wages and contributions to benefit plans, and in the process also deprived other union members of loyal and responsible representation by their union officers, agents, employees and representatives.

The indictment also alleges that many of the defendants committed fraud (1) through "no show" or "featherbed" jobs, thereby getting paid by real estate developers, contractors, and others for hours that they did not work at construction sites throughout New York City, and (2) by depriving the members of Local 14 of the right of honest services of Local 14 and 15's elected officials, who acted at the direction of the Genovese family in connection with the assignment of preferential jobs.

As set forth in the indictment, the defendants conducted various meetings inside a construction shed located at a construction site which is to become an addition to the Museum of Modern Art in Manhattan. Many of the charges in the indictment are based, in part, upon conversations intercepted pursuant to a Court authorized listening device, or bug, which was installed within this shed in 2002.

Extortion and Extortion Conspiracy. The indictment charges all of the defendants, ERNEST MUSCARELLA, a/k/a "Ernie," LOUIS MOSCATIELLO, CARL CARRARA, Sr., a/k/a "Carlo," MORRIS DIMINNO, a/k/a "Mickey," a/k/a "Fatso," BIAGIO NICCHIA, a/k/a "Blaze," JOSEPH RIZZUTO, Sr., JOSEPH RIZZUTO, Jr., STEVEN SKINNER, CARL CARRARA, Jr., PASQUALE DELUCA, a/k/a "Scop," STEVEN SANTUCCI, PASQUALE INGLESE, a/k/a "Patsy," LOUIS INGLESE, Jr., ANTHONY CAROLLO, Jr., RAFFAELE ROMANIA, WILLIAM DUFFY, JAMES MASCARELLA, GARY LOMBARDI, ALDO GALLO, HARRY LANZA, JOHN RUGGIERO, BRIAN FALCO, FRANK RAPPACOLI, and GENE PANESSA, with conspiring between 1997 and 2003 to extort Locals 14 and 15 by obtaining the consent of the members and officers of the unions through the Genovese family's corrupt influence over those unions, thereby allowing the defendants to assign preferential jobs to individuals selected by the Genovese family.

Through this corrupt influence, the indictment alleges that the defendants conspired to obtain, among other things, labor union positions and money paid as wages and contributions to the Locals' benefit plans, the right of Local 14 and 15 members to free speech and democratic participation in the affairs of their labor organization, and the right of the Local members to loyal and responsible representation by their union officers, agents, employees and representatives.

The indictment alleges that LOUIS MOSCATIELLO, a Genovese LCN family soldier who was a member of MUSCARELLA's crew, is principally responsible for supervising the Genovese LCN family's criminal activities in connection with its control of labor unions engaged in the construction industry. The indictment also charges that CARL CARRARA, SR., a Genovese family associate, was primarily responsible for exercising the Genovese family's illegal control over Locals 14 and 15, aided at times by associate MORRIS DIMINNO. Both CARRARA, Sr. and DIMINNO are members of Local 14, and both served at various times as Master Mechanics, or shop stewards, at construction job sites. The indictment charges MOSCATIELLO, CARRARA, and others with numerous separate extortions relating to their use of the Genovese family's corrupt influence to place other members and associates at job sites throughout New York City.

The indictment also charges that several of the defendants were able to use the Genovese family's corrupt influence over Locals 14 and 15 to obtain unlawful payments from contractors. Among these charges, the indictment charges MUSCARELLA, a member of the ruling administration of the Genovese LCN family and formerly a Captain, and NICCHIA, who is MUSCARELLA's stepson, with receiving unlawful payments from certain contractors so that those contractors would not have to sign a collective bargaining agreement with the union.

Mail Fraud. In connection with many of the individual preferential job assignments, the defendants involved are charged with defrauding contractors, real estate developers and others by submitting false information to contractors at the job site regarding hours worked by certain Local 14 and 15 members. Through these "no-show" jobs, the defendants fraudulently obtained wages as well as contributions on their behalf to the Locals' benefit plans. The indictment charges that these scheme existed at job sites throughout the city, including at the AMEC Construction site at the Museum of Modern Art in Manhattan (CARRARA, Sr., PASQUALE INGLESE).

The indictment also charges that the defendants engaged in other schemes to defraud, relating to each of the individual preferential job assignments, by depriving the members of Locals 14 and 15 of their right to honest services from their respective unions' elected officials, who acted at the direction of members of the Genovese family in making job assignments.

Unlawful Payments Labor Officials. The indictment also alleges various offenses relating to unlawful payments received by Local 14 officials, including payments received by RIZZUTO, Sr., the former Business Manager of Local 14, and RIZZUTO, Jr., the current Business Manager of Local 14, in exchange for LOUIS INGLESE, Jr., and ALDO GALLO's membership in Local 14. In addition, the indictment charges RIZZUTO Sr. and RIZZUTO, Jr. with receiving unlawful payments solicited from employers under the guise of a retirement dinner for RIZZUTO, Sr.

Mortgage Fraud and Loansharking. In addition to being named in 54 counts relating to the Genovese LCN family's illegal control over Local 14, CARRARA is also charged with loansharking, and with participating in a conspiracy to defraud the United States Department of Housing and Urban Development regarding the purchase of his residence. In fact, CARRARA was intercepted and recorded explaining that he intentionally placed his residence in another person's name, so as to prevent its seizure by the government.

Criminal Forfeiture Allegation. The indictment also contains criminal forfeiture allegations regarding the property unlawfully obtained by the Genovese family. Specifically, the indictment seeks to forfeit at least $1.6 million from the eight defendants charged in the racketeering offenses. In addition, the indictment seeks to forfeit, as substitute assets, the residences of MOSCATIELLO, CARRARA, Sr. and RIZZUTO, Sr.

In announcing the indictment and arrests, JAMES B. COMEY, United States Attorney for the Southern District of New York, stated: "The charges unsealed today demonstrate that, despite law enforcement's substantial victories over organized crime in New York City, La Cosa Nostra continues to exert its corrupt influence over organizations, such as labor unions, that affect the daily economic life of New York. By controlling Locals 14 and 15, the Genovese family harmed numerous real estate developers and contractors who are busy building, and rebuilding, our city. More importantly, the honest, hard working members of Locals 14 and 15 were repeatedly denied jobs and the right to participate meaningfully in the governance of their unions by the Genovese family. This indictment sends a powerful message that law enforcement will continue to vigorously investigate and prosecute the mob to prevent them from re-establishing their violent, extortionate grip over various industries in the New York City area, including the construction industry." ROSLYNN R. MAUSKOPF, United States Attorney for the Eastern District of New York, praised the cooperation of federal, state and local law enforcement, and stated: "Today's indictments are the product of our continuing efforts to rid labor unions of the corrupting influence of organized crime. With corruption on the job sites comes increased costs, which inevitably, albeit indirectly, get passed on to the public. This prosecution follows a series of assaults by law enforcement on the hierarchy of organized crime groups in the New York City metropolitan area and further demonstrates that such prosecutions are a priority of this office."
 

ELIOT SPITZER, Attorney General of New York State, stated: "Today's indictments are a critical step to break the stranglehold that organized crime has held on New York's construction industry for decades. Through illicit activities to control two powerful unions, the Genovese and Colombo crime families have cost the city, and the state and federal governments millions of dollars, robbed the union pension funds of needed contributions, and prevented honest, hard-working union members from obtaining jobs," Spitzer said. "I want to thank the various law enforcement agencies, particularly my Organized Crime Task Force, for its outstanding investigative efforts in developing the evidence in this case."

KEVIN P. DONOVAN, Assistant Director-in-Charge, Federal Bureau of Investigation in New York, stated: "These arrests, and all the arrests within the past 18 months of the bosses of all 5 organized crime families in New York, demonstrate our determination to maintain constant law enforcement pressure on the hierarchy and structure of organized crime while, at the same time, continuing to separate the mob from its sources of income. The influence exerted by the Colombo and Genovese organized crime families over Union Locals 14 and 15 victimized not only legitimate union members by corrupting their union officials, looting benefits plans and denying them the right to democratically govern their union, it also victimized real estate owners and the public which always ultimately bears the burden of the 'mob tax'."

GORDON HEDDELL, Inspector General, United States Department of Labor, stated: "Today's racketeering indictments against officials of Operating Engineers Local Unions 14 and 15, and members and associates of the Colombo and Genovese crime families, reinforce our continued commitment to clean up New York's construction industry from labor racketeering. Freeing unions from organized crime and corruption will allow qualified tradesmen to fairly obtain employment and enable contractors to conduct business without fear or intimidation."

RAYMOND W. KELLY, Commissioner, New York City Police Department, stated, "These criminals put honest workers out of jobs, stole money from unions and contractors, and created dangerous environments at construction sites. We will not allow organized crime and corrupt union officials to intimidate and extort money from honest people. Our detectives did an outstanding job gathering evidence and making the arrests in this case, they uncovered a vast organization of corruption and pulled it up by its roots. I commend them all."

The agencies expressed their appreciation to the New Jersey Division of Criminal Justice's Organized Crime Bureau, the New York City Department of Investigation's School Construction Authority Inspector General's Office, and the New York City Business Integrity Commission for their assistance.

Eastern District Charges and Maximum Penalties. If convicted of racketeering or racketeering conspiracy, Eastern District defendants JOEL J. CACACE, Sr., JOEL J. CACACE, Jr., JOHN J. DEROSS, JACK J. DEROSS, JAMIE T. DEROSS, LAWRENCE A. PERSICO, VINCENT RICCIARDO, PAUL J. BUCKLEY, JOSEPH CORIASCO, RICHARD J. CORIASCO, ANTHONY F. POLITO, JAMES F. COYLE and RICHARD J. TROY face a maximum sentence of 20 years imprisonment, 3 years supervised release, and $250,000 in fines, or twice the gross gain or loss as a result of the offense. For each mail fraud and unlawful labor payment count of conviction, NICHOLAS LUPARI and THOMAS G. McNAMARA face a maximum sentence of 5 years imprisonment, 3 years supervised release, and $250,000 in fines or twice the gross gain or loss, for mail fraud, and $15,000 in fines for unlawful labor payments. On each count of conviction for unlawful labor payments and mail fraud, ANTHONY QUARANTA faces a maximum sentence of 5 years imprisonment, 3 years supervised release, and $250,000 in fines or twice the gross gain or loss, for mail fraud, and $15,000 in fines for unlawful labor payments. On each count of conviction for mail fraud, EMIL GARY CLEMENTE faces a maximum sentence of 5 years imprisonment, 3 years supervised release, and $250,000 in fines or twice the gross gain or loss from the offense. If convicted of the one count of mail fraud, SEAN F. KILCULLEN faces a maximum sentence of 5 years imprisonment, 3 years supervised release, and a $250,000 fine or twice the gross gain or loss from the offense.

Southern District Charges and Maximum Penalties. (See Attachment A)

The Eastern District of New York case is being prosecuted by Assistant United States Attorneys Bridget Rohde, Nancy A. Miller and Jennifer E. Schantz, and Special Assistant United States Attorney Dennis Walsh, an Assistant Deputy Attorney General with the New York State Organized Crime Task Force.

The Southern District of New York case is being prosecuted by Assistant United States Attorneys Adam Siegel, Jonathan Kolodner, and Virginia Chavez, and Special Assistant United States Attorney Dennis Walsh, an Assistant Deputy Attorney General with the New York State Organized Crime Task Force.