Copyright 1994 The New York Times Company  
The New York Times
September 9, 1994, Friday, Late Edition - Final
Correction Appended
SECTION: Section B;  Page 2;  Column 3;  Metropolitan Desk 

LENGTH: 867 words

HEADLINE: Citing Organized Crime, U.S. Sues to Take Control of Union

BYLINE:   By RONALD SULLIVAN 

BODY:
Citing years of corruption and organized-crime influence, the Government yesterday moved to take control of a New York City union representing construction laborers.

The prosecutors asserted that Mafia members, corrupt union officials and others had systematically plundered the $270 million benefit fund of the union, the Mason Tenders District Council of Greater New York, endangering the benefits of the union's 7,000 current and retired members.

The Government has already won criminal convictions against at least a dozen people in the case. But Federal officials, saying that criminal prosecutions alone were not enough to cleanse the union of corruption, yesterday filed a civil suit aimed at overhauling the union leadership and breaking the hold of organized crime.

In the last decade, Federal and state prosecutors have increasingly relied on civil suits to clean up unions in the New York region suspected of being controlled by Mafia families. The strategy has led to the removal of top leaders and new elections in unions representing teamsters, carpenters and painters.
 
RICO Statute Used

The United States Attorney for Manhattan, Mary Jo White, described the suit against the Mason Tenders as a "critical part of the Government's sustained efforts to eradicate La Cosa Nostra's corruption of construction unions in the New York City area."

Filed under two statutes, the Racketeering Influenced and Corrupt Organizations, or RICO, and the Employee Retirement Income Security Act, the complaint charges that the Mason Tenders union has been infiltrated and controlled by several organized crime families for their own enrichment.

The complaint also charges that corrupt union officials made "immense profits" by defrauding various benefit funds of an estimated $50 million, as part of what the government called a 20-year pattern of kickbacks, skimming, payoffs, bribes, money laundering, waste, luxury purchases, embezzlements and no show jobs, along with two real-estate deals that, in themselves, defrauded the benefit funds of at least $20 million.

"The District Council officers and members have transformed the collective bargaining agreements into tools of extortion" and "fostered a regime of corruption at all levels of the union throughout the New York City area," the complaint said.

The 113-page complaint is replete with examples of what the Government said were 110 separate racketeering acts. For example, it said the 110th act involved a scheme masterminded by James Messera, a reputed capo, or captain, in the Genovese crime family, that used union funds to purchase -- at twice its appraised value -- a Florida property owned by Mr. Messera's mother under a fictious name.

The complaint said that, not content with the initial fraud, Mr. Messera, along with James Lupo, the union president, and others, extracted hundreds of thousands of dollars in kickbacks on construction work at the property.
 
Kickbacks Detailed

But not all of the corruption was confined to reputed mobsters and union officials, the complaint said.

It said physicians, chiropractors and accountants gave kickbacks to the union in return for union business. For example, it said the union ordered all members to have physical examinations, allergy and blood tests, and second surgical opinions -- most of them unnecessary -- at medical offices controlled by a chiropractor who charged "grossly inflated" fees of from $567 to $901 a test.

As a result, the complaint said millions were wasted and appropriate medical care to union members was compromised.

Union officials did not respond to telephone calls for comment.

Prosecutors said the resulting drain on the union's benefit funds threatened the union's ability to provide health, welfare and pension payments to its members.

The complaint seeks the appointment of one or more court-appointed independent trustees who will supervise elections and institute other reforms aimed at ridding the Mason Tenders of the leadership which the Government says allowed the union to be controlled by organized crime.

The complaint names the district council's current officers, the seven union employee benefit funds and several of their present and former trustees, reputed members of the Genovese, Gambino and Lucchese crime families, and a number of professionals doing business with the union.
 
A Scheme Recounted

The complaint demands that the defendants pay back any money that was stolen, and seeks their replacement by court-approved officers.

The complaint also recounts a corrupt union real-estate scheme which resulted in the guilty plea last year of Mr. Lupo's brother, Frank, who preceded him as president and is now in prison.

The complaint said union officials used benefit funds to purchase a building at 32 West 18th Street and eight Brooklyn properties from the Genovese crime family "at grossly inflated prices."

It said the union lent a member of the Genovese organization $7 million which he used to purchase the Manhattan building. He then sold the building back to the union for $24 million. After the union put in $4.5 million in renovations, the building was said to be worth $5 million.

CORRECTION-DATE: September 13, 1994, Tuesday

CORRECTION:
An article on Friday about a Federal suit against a New York City union representing construction laborers referred incorrectly to legal action taken against the newspaper drivers' union in New York. While the Manhattan District Attorney has sought the appointment of a trustee to oversee the union, the Newspaper and Mail Deliverers' Union of New York and Vicinity, that action did not lead to the removal of leaders or to new elections.