Owners of Tri-Built Construction Plead Guilty to Defrauding Carpenters Union & Bribing Shop Stewards

LAWFUEL – The Legal Newswire – MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, announced that PATRICK NOEL McCAUL and JAMES DERMOT McGONNEL pleaded guilty today to conspiring to defraud the Carpenters Union benefit funds of millions of dollars
by using non-union labor, paying union carpenters off-the-books,
and bribing shop stewards and an employee of the benefit funds to
assist in the fraud.

The defendants pleaded guilty today in Manhattan federal court before United States District Judge MIRIAM GOLDMAN CEDARBAUM. McCAUL and McGONNEL were indicted in December 2006 and arrested in January 2007. According to documents filed in this case and statements made during the
defendants’ guilty plea proceedings:
the owners of Tri-Built Construction Inc. (“Tri-Built”), a
drywall contractor that operated in New York City and Long
Island. Between 1993 and 2004, Tri-Built, holding itself out as
a union contractor, was hired for numerous construction projects
in New York City, including public projects financed by the
Dormitory Authority of the State of New York — such as a large
construction project at Kings County Hospital in Brooklyn.

During that time, Tri-Built was a party to a collective
bargaining agreement with the District Council of New York City
and Vicinity of the United Brotherhood of Carpenters and Joiners
(the “Carpenters Union”). Under the collective bargaining
agreement, Tri-Built was obligated to use union labor and pay
union wages and benefits to all carpenters employed on Tri-
Built’s jobsites.

McCAUL AND McGONNELL admitted that from 1993 through May 2004, they conspired to defraud the Carpenters Union and its benefit funds by paying workers cash, at non-union rates, without
any benefits or tax withholdings. This practice enabled McCAUL
and McGONNELL to underbid jobs — knowing that Tri-Built never
intended to comply with its collective bargaining and prevailing
wage obligations. To avoid detection of their fraud, the
defendants bribed Carpenters Union shop stewards to submit false
reports, under-reporting the true number of carpenters and hours
worked on several Tri-Built jobsites.

McCAUL and McGONNELL also paid a then-employee of the
Carpenters Union benefit funds to destroy internal union records
which might reveal the fraud if an audit of Tri-Built were
conducted by the union. McCAUL and McGONNELL diverted at least
$6.5 million from the union benefit funds through their
fraudulent conduct.

McCAUL AND McGONNELL each face a maximum sentence of
five years in prison. As part of the agreement made at the time
of their plea, they also agreed to forfeit $1.5 million, which
will be paid to the Carpenters Union benefit funds. Sentencing
is scheduled for April 15, 2008, before Judge CEDARBAUM.
Mr. GARCIA thanked the U.S. Department of Labor for its
assistance in this investigation.
Assistant United States Attorney LISA ZORNBERG is in
charge of the prosecution.
07-285 ###

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