Providence Journal

Coia Agrees To Plead Guilty To Tax Fraud

The single felony count stems from the Barrington labor leader's attempts to defraud the state and town of taxes owed on the purchase of three Ferraris, prosecutors say.


With staff reports from W. Zachary
Malinowski and David Herzog.
Journal Staff Writers

January 28, 2000

BOSTON -- Arthur A. Coia, the powerful national labor leader from Rhode Island who became a key political fundraiser for President Clinton, could soon be a convicted felon.

The recently retired president of the Laborers' International Union of North America signed a plea agreement yesterday in which he admitted defrauding Rhode Island taxpayers of nearly $100,000.

Coia, 56, of 20 Payne Rd., Barrington, is scheduled to plead guilty in federal court here at 2 p.m. Monday, before U.S. District Judge George A. O'Toole.

Coia had been prepared to appear in court here yesterday, but the judge -- who must still accept the agreement -- was too busy with other cases.

Through the years, Coia has faced federal labor racketeering charges and accusations of consorting with mobsters. But the allegations never resulted in any criminal convictions, or hampered his rise to the top of one of North America's largest labor unions and into the inner circle of national Democratic Party politics.

But something closer to his Barrington waterfront manse, Southwind, brought Coia down -- his love of expensive Ferrari automobiles, and his desire to conceal his ownership of them to avoid paying local car taxes.

In a criminal complaint filed in U.S. District Court here yesterday, prosecutors charged that Coia schemed with long-time friend Carmine Carcieri, owner of Viking Cadillac in Middletown, to defraud Rhode Island of taxes owed on the purchase of three Ferraris, ranging in price from $215,000 to $1 million.

"While holding important leadership positions . . . Mr. Coia engaged in an extensive scheme to cheat Rhode Island and Barrington of approximately $100,000 in taxes," said U.S. Attorney Donald K. Stern, in a news release." Although he spent well over a million dollars on Ferrari automobiles, Mr. Coia repeatedly found ways to shirk his duty to pay his taxes."

Viking, which reaped millions of dollars for leasing cars to union executives during the same period, has been identified in congressional hearings as a business with Mafia ties. In an internal union disciplinary decision last year, a hearing officer concluded that Coia had a conflict of interest in his dealings with Viking, and fined him $100,000.

Now, Coia has agreed to plead guilty to a single felony fraud charge, and to pay a $10,000 fine and about $100,000 in restitution to the State of Rhode Island and the Town of Barrington, for unpaid car taxes from 1991 to 1997. In return, the government has agreed to recommend a lighter sentence than the maximum of five years' imprisonment and $250,000 fine that Coia could have received.

Instead, the deal calls for Coia to do no prison time and allows him to keep his $250,000-plus annual lifetime pay as the Laborers' "general president emeritus" -- a post created for him by union leaders following his retirement.

The pending charge was also the reason that Coia resigned the Laborers' presidency last month -- something the union had refused to acknowledge in announcing his departure. As part of his plea agreement, Coia also will be barred from any future role in union affairs, Stern said.

The plea agreement, in which the government also says it will not prosecute Coia for any other potential crimes, was hammered out after lengthy negotiations between Coia's lawyers and federal authorities in New England and Washington. The case began as an investigation by the U.S. Department of Labor's Division of Labor Racketeering in Massachusetts.

In an indication of Coia's stature, the agreement was ratified by a top deputy to U.S. Atty. Gen. Janet Reno, criminal chief James K. Robinson.

The Coia lawyers who signed the agreement are Brendan V. Sullivan Jr., who represented Oliver North in the 1980s congressional Iran-contra hearings, and Howard W. Gutman. Both lawyers are with the Washington firm of Williams & Connolly, which helped defend President Clinton against impeachment.

COIA AND HIS LAWYER did not return phone calls yesterday seeking comment.

But in happier days, a younger Coia spoke freely to the media of his love for Ferraris. And he testified in a union disciplinary hearing a few years ago that he had been a Ferrari enthusiast for years.

At times, prosecutors said yesterday, Coia's enthusiasm drove him to fraud.

In 1991, authorities charged, Coia bought a Ferrari F-40 for $450,000, in Viking's name. About two years later, after he had become Laborers' president, Coia bought the car from Viking for $275,000, but failed to pay the 7 percent use tax required by the state -- in this case, $19,250.

In 1993, while Coia was cultivating a political friendship with the Clintons, he bought another Ferrari, a 1973 365 GTB4 model, for $215,000, from a dealership in Los Gatos, Calif. He then used a fraudulent invoice from Viking, which falsely stated that Coia had paid $2,160 for the car, to register it in Rhode Island.

The result: Coia paid a use tax of only $151 to the state, instead of $15,000. Coia also registered the car to Viking's Middletown address to avoid paying the higher excise tax in Barrington, improperly saving another $7,600.

Then there was the case of the million-dollar Ferrari.

Court papers say that in 1990, Coia bought a 1972 Ferrari Daytona from a Fort Lauderdale, Fla., dealer for 1,050,000.

Three years later, in August 1993, Coia "fraudulently registered" the car to Viking's address in Middletown, where the excise tax was $13 per thousand compared with the Barrington rate of $33. The Daytona, kept in Coia's garage in Barrington, near the Rhode Island Country Club, continued to be taxed by Middletown through 1996, authorities charge -- defrauding Barrington of $57,865.

In a deposition in his union case, Coia explained that he would register some of his cars in Middletown because "the tax rate is cheaper there."

Not only were the taxes higher in Barrington, Coia testified, but "These cars are antiques and the [tax] assessor in the town that I'm at doesn't have an understanding of what, you know, they go up and down as the decision prevails. It's a strange situation."

That came as news to Rebecca LeFebvre, the Barrington tax assessor since 1991. She told The Journal yesterday that Coia never discussed his car taxes with her. "No. Not at all," she said. "In fact, I don't even know the gentleman."

Barrington officials were startled by yesterday's news, and thrilled at the prospect of an unexpected windfall in Coia's $65,000 restitution. "It's unexpected money that we can use productively," said Town Manager Dennis Phelan.

CARCIERI, who Coia's lawyer has said testified before the federal grand jury in Boston, was not charged.

Carcieri, 71, of 300 Twin River Rd., Lincoln, did not return a phone call seeking comment. State records show that he has since sold or closed his Viking dealerships. He remains a part-owner, with his daughters, of EZee Car Rental and Leasing Co., which does business as Auto-Choice Car and Truck Sales, at 750 Taunton Ave., East Providence.

While the government's recommended sentence bars Coia from union activity -- a standard penalty for union leaders convicted of taking kickbacks from union vendors -- the union pointed out that Coia was not charged with any wrongdoing stemming from his union duties.

As part of a reform program imposed on the union by the Justice Department in 1995, the Laborers severed business ties with Viking in 1996 because of its alleged organized-crime ties.

One of the prosecutors who handled the case, Assistant U.S. Attorney Ernest S. DiNisco of the Organized-Crime Strike Force in Boston, declined comment when asked whether the government had weighed charges involving Coia and Viking's union business.

"This [plea] has been a process of negotiation," he said.

The plea agreement also recommends leniency for Coia as a reward for his efforts in helping to clean up the Laborers' - a suggestion that drew scorn from one long-time union dissident.

Alex Corns, who heads a Laborers' local in Daly City, Calif., called it "a great deal for Coia . . . no jail time and he gets this honorary position and gets paid for life."

Corns said that he wrote to the federal judge yesterday, urging him to reject the plea agreement on Monday.

Despite the plea agreement, DiNisco said that union leaders could still decide to eliminate Coia's pay.

But Robert D. Luskin, the ex-federal prosecutor hired to clean up the Laborers' and who brought the union charges against Coia, said that the union will not do so. "He didn't plead guilty to kickbacks," said Luskin. "So I don't think the basis of this criminal charge involves a breach of duty to the union."

BARRED FROM union activity, it is unclear how Coia will spend his time.

A return to his law firm, Coia & Lepore, which has done extensive legal work for the Laborers' and is one of Rhode Island's premier workers compensation firms, could be problematic.

David Curtin, the Rhode Island Supreme Court's disciplinary counsel, said that he will seek Coia's disbarment, assuming the judge accept's Coia's guilty plea.

When Coia announced his resignation last month -- as part of his still-secret deal with federal prosecutors -- he said that "for far too many years, my entire life has been scrutinized."

Now, he said, he hoped that his positive accomplishments -- including cleaning up the Laborers' -- would be remembered. "I leave this Union in good hands," he wrote in a farewell message in this month's New England Laborers' Update magazine, "and I will keep it always in my heart."

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