Compliance December 2, 2004

Union Boss Sentenced for Racketeering and ERISA Violations

December 2, 2004 (PLANSPONSOR.com) - Charles Novak, the former vice president and business agent of Local One of the International Union of Elevator Constructors in New York, has been sentenced to 108 months in prison on multiple charges that range from racketeering to money laundering.

Reported by

Kip McDaniel

>His sentence includes three years of supervised release, a restitution payment of $289,000, and a $15,000 special assessment, according to a news release. In addition, US District Judge David Trager of the US District Court for Eastern New York entered a forfeiture judgment in the amount of $300,000.

>Three dozen other defendants have pleaded guilty in connection with the investigation that led to Novak’s conviction, the news release stated.

>Novak was charged and convicted of racketeering, racketeering conspiracy, receiving unlawful labor payouts in violation of the Taft-Hartley Act, mail fraud, making false Employee Retirement Income Security Act (ERISA) statements, money laundering and money laundering conspiracy. The charges stated that Novak lead a racketeering enterprise that lasted over three decades in which he victimized high-rise construction sites throughout the New York area, generating kickbacks for himself and others from no-show elevator construction jobs. Between 1989 and 2001, the court alleged, Novak caused contractors to pay more than $3 million in the names of no-show operators.

>In exchange for the no-show money, the release stated, Novak would provide labor peace and compromised Local One’s rights to insist that contractors comply fully with their obligations.

>Novak must report to prison on February 1, 2005.