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Laborers

 

 

Ex-Chicago Laborers Boss Indicted After Defrauding Local of $470,000

 

 

By Michael Bologna

Tuesday, November 14, 2000

 

 

CHICAGO--A federal grand jury Nov. 9 returned a 28-count indictment against the former president of a Chicago local of the Laborers International Union of North America, charging the official with racketeering and converting union funds for his personal use (U.S. v. Zeuberis, N.D. Ill., No. 00 CR 918, 11/9/00).

 

The indictment is aimed at Frank B. Zeuberis, who was the president and business manager of LIUNA Local 5 in Chicago Heights, Ill., between April 1, 1994, and Oct. 23, 1998. According to the indictment, Zeuberis used his position within Local 5 to engineer various schemes that defrauded the local of $473,106. Local 5 has had a long history of corruption and mob influence. The local represents approximately 800 workers primarily in the construction trades.

 

Mark J. Vogel, an assistant U.S. attorney, said Zeuberis was arrested Nov. 9 at his home in St. John, Ind. He was released on a $20,000 recognizance bond after an appearance before a federal magistrate in Hammond, Ind. Vogel said he expects Zeuberis to be arraigned later this week. Zeuberis could not be reached for comment.

 

The indictment includes one count of racketeering, 11 counts of stealing union funds, and 16 counts of keeping false union records. According to the indictment, Zeuberis illegally enriched himself, his wife Joann Zeuberis, who was a part-time clerk at Local 5, and James A. DiForti, secretary-treasurer of the local during the mid-1990s. The indictment alleges that on 30 occasions Zeuberis illegally granted salary increases, paid vacations and bonuses, benefiting himself, his wife, and DiForti.

 

Zeuberis supported this fraudulent activity by creating false executive board and membership meeting minutes containing authorizations for salary increases, paid vacations, and bonuses. In addition, Zeuberis allegedly created false authorizations for vehicle expense reimbursements and auto repairs.

 

Zeuberis' career with LIUNA ended in October 1998, when Local 5 entered into a supervision agreement with the international union. The local, which had a reputation for corruption and mob influence, had been investigated by LIUNA 's Office of the General Executive Board Attorney, the internal investigative and disciplinary process established with the Justice Department in 1995 to reform the union. Rather than be placed in trusteeship, Local 5 agreed to a supervisory process to remove the influence of organized crime and address significant problems with financial mismanagement, improper recordkeeping, and undemocratic processes.

 

Robert D. Luskin, LIUNA 's GEB attorney, said the government's case against Zeuberis was based primarily on evidence of misconduct discovered by his office. He noted that Zeuberis agreed to resign from LIUNA shortly after the imposition of the supervision agreement rather than face other disciplinary options. Luskin said his office then referred evidence of Zeuberis's misconduct to federal authorities for potential criminal action.

 

"We took disciplinary steps against Mr. Zeuberis, and he agreed to leave the union permanently," Luskin said. "The issues in the indictment were turned up through the course of our investigation and were then passed along to the Office of the U.S. Attorney."

 

Copyright © 2000 by The Bureau of National Affairs, Inc., Washington D.C.


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