Copyright 1992 UMI Inc.;
Copyright Newsday, Inc. All Rights Reserved. 1992;
Business Dateline;  
New York NewsdaySeptember 11, 1992
SECTION: Sec 1; pg 47

LENGTH: 594 words

HEADLINE: Pension Fund Fleeced, Say Feds

BYLINE: Kenneth C. Crowe

DATELINE: New York; NY; US

BODY:
The president of a New York construction union, along with two organized crime associates--one of whom owns a Long Island topless nightclub--were indicted yesterday on a racketeering charge stemming from what prosecutors say may be the largest-ever ripoff of a union pension fund in a single deal.

The 33-count indictment accuses New York Mason Tenders district council president Frank Lupo, 45, of Massapequa, Ronald Miceli, 40, of Oceanside, owner of the Mirage Bar in Island Park, and Charles Trentacosta, 32, of Staten Island, with participating in a scheme to embezzle millions of dollars from the district council's pension fund through a series of fraudulent real estate transactions.

Miceli, who realized more than $ 16 million from one of the deals, went on a spending spree that included spreading some of the money to alleged organized crime associates and the purchase of a $ 450,000 yacht, the 50-foot "Jen Di Ron" docked in Freeport, and four Mercedes Benzes.

Asst. U.S. Attorney Orin S. Snyder, at a news conference, said, "This is one of the largest and possibly the largest (union pension fraud) ever prosecuted by the federal government." The indictment charges that a loft building in Manhattan and eight residential properties in Brooklyn were sold to the pension fund in 1989 and 1990 at "grossly inflated prices," totaling $ 27,400,000. The real estate deals were first uncovered in a Newsday investigation in July, 1991..

The Manhattan loft building at 32-36 W. 18th St. was purchased by Miceli on Feb. 1, 1990, for $ 7,450,000 with money lent to him by the pension fund. Nine months later, Miceli sold the property to the Mason Tenderss Pension Fund for $ 24-million--realizing a profit of $ 16,550,000. Federal investigators in Washington, D.C., and New York said this transaction apparently is the largest drain of a pension fund assets in a single real estate deal.

In addition to the $ 24 million purchase price, the pension fund spent $ 4.5 million renovating the Manhattan loft. The indictment charges that a real estate expert, retained by the pension fund last year, valued the building, including the improvements, at $ 5 million.

The indictment stems from a joint investigation by FBI agent Michael Brooks, U.S. Labor Department pension benefits investigator George Maul, and Marc Schwarz of the Internal Revenue Service Criminal Division. The indictment charges that Genovese crime family capo James Messera, 53, of Central Islip, now serving a three year prison term for racketeering, controls the Mason Tenders and installed Lupo as president after the death of Lupo's father, Gaspar Lupo, a Genovese crime family soldier. Miceli and Trentacosta are close associates of Messera, according to the indictment. Lupo's grandfather also headed the Mason Tenderss district council.

A conviction would result in Lupo being removed from his $ 391,000-a-year post as district council president along with the prospect of facing 90 years in prison and a $ 3 million fine. Miceli could be ordered to forfeit his yacht, his numerous real estate and entertainment businesses, his four Mercedes and the profits he made. Miceli faces a maximum term of 320 years in prison and a $ 7.5-million fine, while Trentacosta, who was involved with Miceli in the Brooklyn transactions, faces a maximum of 140 years in prison and a $ 2.5 million fine.

The district council, whose parent international union is the Laborers International Union of North America, covers 10,000 laborers and mason tenders in 10 locals throughout New York City.