MARK PAZNIOKAS; Courant Staff Writer
UNION LEADER INDICTED IN COLONIAL SCANDAL
ALLEGEDLY TOOK $345,000 IN BRIBES
A prominent labor leader, Dominick Lopreato, arranged for $8
million in union pension funds to be invested with Colonial Realty Co. in return for
$345,000 in bribes, according to a federal indictment unsealed Wednesday.
Lopreato then conspired with the company's founder,, Benjamin Sisti and Jonathan Googel, to conceal the bribes after
Colonial's spectacular failure attracted federal investigators, the indictment says.
The eight-count indictment charges Lopreato with two counts of
accepting bribes as a pension plan trustee, three counts of filing a false tax return, two
counts of perjury, and one count of conspiracy.
FBI and IRS agents arrested Lopreato, a longtime
official of the Laborers' International Union and a trustee of its
pension plan, at 6:30 a.m. Wednesday at his Bushnell Tower condominium in downtown
Hartford.
Lopreato, 59, who faces up to 30 years in prison and $2 million in
fines, declined to comment after he was presented before U.S. Magistrate Judge Thomas P.
Smith in Hartford and released on a $100,000 non-surety bond.
The arrest was coordinated with the disclosure
two hours later that Ronald J. Welch of West Hartford, who describes himself as Lopreato's
best friend, is prepared to testify he delivered cash from Colonial to Lopreato on three
occasions.
Welch's cooperation became public Wednesday
morning when he waived his right to be indicted and pleaded guilty before U.S. District
Judge T.F. Gilroy Daly in Waterbury to tax fraud and aiding and abetting the payment of a
bribe.
Lopreato is the first public figure to be indicted in the Colonial
scandal since authorities disclosed in June 1993 that Sisti and Googol
each had pleaded guilty to four felony counts and were cooperating with investigators.
Accountants, lawyers, politicians, labor leaders,
stockbrokers, bankers and business executives who may have had illegal or questionable
dealings with Colonial were believed vulnerable once Sisti and Googel became informants.
Colonial grew into a real estate colossus in the 1 980s, buying
and syndicating to investors more than a billion dollars in real estate in Connecticut and
around the nation. But former employees said after the company's collapse
that the secrets of its success included securities fraud and bribes to public and private
officials.
After Sisti and Googel cut their deal, one
longtime Colonial employee predicted, ''They are going to rat everyone out."
Information from Sisti and Googel, who have yet
to be sentenced, helped lead investigators to Welch, who in turn agreed this summer to
provide testimony against his old friend Lopreato. "It was a
heartbreaking and gut- wrenching decision" by Welch to give evidence against
Lopreato, said Jeremiah Donovan, Welch's lawyer.
Jon Googel was one of his best friends and so was
Dominick," Donovan said. Ron is one of the little people who gets caught up in this
enormously lucrative scam, whose life is wrecked by it. Now he's trying to do the right
thing."
Prosecutors told Daly that Welch delivered about $45,000 to Lopreato in June 1988 after the union invested $2 million
with Colonial, then $150,000 in September 1989 after a $3 million investment, and another
$150,000 in May 1990 after a second $3 million investment.
The Laborers' union in Connecticut invested $S
million; an affiliate in Albany, N.Y., invested $3 million on Lopreato's recommendation,
prosecutors said.
At the time, Lopreato was the business manager or top leader of
the Connecticut Laborers' District Council, the statewide umbrella for locals of the
Laborers' International Union, which represents
construction workers. He held the same position with Local 230.
He resigned as business manager last summer after he admitted
accepting a Rolex watch from Googel, but he kept the title of secretary- treasurer. The
admission, ironically, came during a deposition Lopreato gave in the
civil lawsuit the union filed against Colonial after the union lost its investment.
The indictment charges that Lopreato broke
federal law by accepting the bribes and also by accepting the Rolex, a gold presidential
model with an appraised value of $1 1,700. It also says Lopreato lied
under oath twice while giving the deposition and that he failed to report the bribes as
income.
Lopreato also is accused in the indictment of
hindering the investigation of Colonial. Named as unindicted conspirators are Welch,
Googel, Sisti and Sisti's son, Kevin Sisti.
Lopreato had meetings with Welch and Colonial's
principals at Hartford area restaurants, where they would coordinate the stories they
planned to tell the FBI, according to the indictment. The last meeting was in September
1992, about eight months before Sisti and Googel agreed to cooperate
with authorities.
Lopreato met that month with Googel and Welch across from the
Hartford Civic Center, at Frank's Restaurant, and then at a bar in the
Goodwin Hotel. Once again, they agreed to stick by their story: Lopreato had been paid
nothing, the indictment states.
But the unity fell apart under continuing pressure from
authorities -- and the prospects of long prison sentences.
Under federal guidelines, which give judges
little leeway in sentencing, cooperating with authorities is one of the few ways a
defendant can win a lesser sentence. Welch faces a maximum sentence of six years in
prison.
Assistant U.S. Attorney Thomas J. Murphy, one of
the prosecutors leading the investigation of Colonial by the FBI, the IRS and the
Department of Labor, declined to say whether Lopreato's indictment would be followed by
others.
"The investigation is continuing," he said.
Sisti and Googel are scheduled to be sentenced
Dec. 9, but the sentencing could be postponed -- as it has been before to the dismay of
angry investors who lost their life savings in Colonial deals.
The simple answer," Murphy said of the delay in sentencing,
is we are waiting for them to complete their cooperation."
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