CREDIT UNION CRISIS
Union President Subpoenaed In Heritage
Withdrawal
*The lawyer for Banking Supt. Edward D.
Pare Jr., who is Heritage's receiver, wants Laborers president Arthur A.
Coia to testify about why $480,000 was withdrawn shortly before the bank
closed in 1990.
By JOHN SULLIVAN Journal-Bulletin Staff Writer
Tuesday November 23, 1993
The receiver for Heritage Loan & Investment
has subpoenaed the president of the 600,000-member Laborers International Union to testify
in a dispute over funds missing from the defunct bank.
Lawyer Laurel Bristow, representing Heritage's receiver, said
Laborers president Arthur A. Coia must testify about why $480,000 was withdrawn shortly
before the bank closed in 1990.
The receiver, state Banking Supt. Edward D. Pare
Jr., is attempting to learn why the money was taken from Heritage and whether the funds
should be returned to the account holder, the North American Laborers Defense League.
Defense League officials say the money should be returned because it was
taken without league approval.
Coia's lawyers argued that there is no official connection between
the Defense League and the Laborers Union. They said it would be an undue burden to
require Coia to testify.
Yesterday in Superior Court, Special Master
William McAtee agreed with the receiver and instructed Coia to testify. No date was set.
Heritage closed Nov. 16, 1990, after state
examiners discovered it was bankrupt. While examiners were working at Heritage, the bank's
president, Joseph Mollicone, fled the state. Heritage's collapse triggered the failure of
Rhode Island's private bank insurance system and the state's worst financial disaster
since the Great Depression. After several months as a fugitive, Mollicone returned to
Rhode Island and was convicted of stealing millions of dollars from Heritage depositors.
Immediately after Heritage closed, the state took
over the defunct bank and began paying back depositors. Most accounts were paid out, but
several were disputed because of their unusual nature and because of the poor
record-keeping at the bank.
One such account belonged to the North American Laborers Defense
League, an organization established in 1980 to finance the legal defense of Laborers union
officials. Although the league's board met at the Laborers union's regional training
center in Hopkinton, Mass., officials of both organizations have said there is no formal
connection between the union and the league.
The Defense League had $480,000 in Heritage until just before the
bank closed. Defense League officials said the money in the account came from donations
individuals made to the league. One month before the closing, the money was taken from the league's account.
The records of the account carried the names of both the North
American Laborers Defense League and Arthur Coia, leading state banking officials to
question Coia's role in the account and the league.
In addition to his position with the union, Coia has been a lawyer
in Providence for many years. His father, the late Arthur E. Coia, was a national labor
leader and treasurer of the Laborers union.
Lawyers for Coia, the Laborers union, and the
defense league have said that Coia had no connection with the account. They said Heritage
made an error by including his name on account records.
Coia's lawyers have argued that his testimony
would be irrelevant to the question of the money missing from Heritage. They also said
Coia has medical problems that would make appearing in court difficult. The lawyers did
not describe the medical condition in court and declined to do so later.
McAtee said that Coia could choose to give testimony outside the
court room because of his illness.
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