By JOHN SULLIVAN Journal-Bulletin Staff
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
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about why $480,000 was withdrawn shortly before the bank closed
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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