Former President Of The New York Building And Construction Trades Council And 10 Other Union Officials Plead Guilty To Accepting Bribes And Illegal Payments

 

Defendants Accepted Dozens of Bribes to Corruptly Influence the Construction Industry at the Expense of Labor Unions and Their Members

 Damian Williams, the United States Attorney for the Southern District of New York, and Raymond A. Tierney, District Attorney for Suffolk County, announced today that 11 former union officials — JAMES CAHILL, former President of the New York State Building and Construction Trades Council, CHRISTOPHER KRAFT, PATRICK HILL, MATTHEW NORTON, WILLIAM BRIAN WANGERMAN, KEVIN MCCARRON, JEREMY SHEERAN, a/k/a “Max,” ANDREW MCKEON, ROBERT EGAN, SCOTT ROCHE, and ARTHUR GIPSON — have pled guilty to charges stemming from their acceptance of bribes and illegal cash payments from a construction contractor (“Employer-1”) from in or about October 2018 to in or about October 2020 while the defendants were serving as union officers.  MCCARRON and EGAN pled guilty earlier today before United States District Judge Colleen McMahon to violating the Taft-Hartley Act, and the remaining defendants previously pled guilty either to honest services fraud conspiracy or to violating the Taft-Hartley Act.  Each defendant has or will be sentenced by Judge McMahon in Manhattan federal court.

U.S. Attorney Damian Williams said: “The defendants exploited their union positions and hard-working union members to feed their own greed.  They accepted bribes to corruptly favor non-union employers and influence the construction trade in New York.  The convictions in this case reflect our continuing commitment to root out corruption and bring to justice those who abuse positions of power out of personal greed.  I thank the Suffolk County District Attorney’s Office for their partnership in this case.” 

Suffolk County District Attorney Raymond A. Tierney said: “These convictions highlight a shocking level of corruption among powerful labor officials in New York State.  Through their greed and self-dealing, these defendants betrayed the hard-working members of their respective unions, and undermined the protections meant to be afforded by organized labor.  While their members were performing difficult work at job sites throughout the region, these defendants sold out their membership by accepting bribes and cash payments in restaurant bathrooms.  My Office will continue to uncover and prosecute corruption of all kinds, including that committed by union officials.  I would like to thank the U.S. Attorney's Office for the Southern District of New York for partnering with my Office on these cases, and for bringing these prosecutions to a successful conclusion."

According to the allegations in the Indictment, statements made in court, and court filings:

JAMES CAHILL was the President of the New York State Building and Construction Trades Council (the “NYS Trades Council”), which represents over 200,000 unionized construction workers, a member of the Executive Council for the New York State American Federation of Labor and Congress of Industrial Organizations (the “NYS AFL-CIO”), and formerly a union representative of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (the “UA”).  During the charged conspiracy, CAHILL accepted approximately $44,500 in bribes from Employer-1, and as part of his guilty plea, CAHILL acknowledged having previously accepted at least approximately $100,000 of additional bribes from Employer-1 in connection with CAHILL’s union positions.

KRAFT, HILL, NORTON, WANGERMAN, MCCARRON, SHEERAN, and MCKEON were Business Agents, EGAN was the Secretary-Treasurer, and ROCHE was the Business Agent At Large of the Local 638 of the UA (“Local 638”).  GIPSON was a Business Agent of the Local Union 200 of the UA (“Local 200”).  Each of these defendants accepted thousands and, in some cases, tens of thousands of dollars of cash bribes from Employer-1, a contractor who had projects and potential projects within the jurisdiction of Local 638 and Local 200.

All 11 defendants accepted cash from Employer-1 — usually stuffed in envelopes that Employer-1 handed off inside the restrooms of restaurants.  During the meetings at which the payments were made, Employer-1 repeatedly requested favorable action from Local 638 and/or Local 200 including the following: (1) that the relevant union would support Employer-1’s bids on various projects, (2) that the union would consider signing Employer-1 to labor agreements that Employer-1 regarded to be favorable (including agreements that would pay union workers lower rates than their experience merited), and (3) that the union would permit Employer-1 to falsely claim to developers that Employer-1 employed union workers.  JAMES CAHILL was the leader of the conspiracy and introduced Employer-1 to many of the other defendants, while advising Employer-1 that Employer-1 could reap the benefits of being associated with the unions without actually signing union agreements or employing union workers. 

Employer-1 contracted to work on — or would bid on — projects that could have otherwise employed union workers belonging to Local 638 and/or Local 200.  At the time Employer-1 was bribing the defendants, Employer-1’s business employed workers who were not members of Local 638 and/or Local 200 but would have been eligible for membership.

A chart containing the names, offenses of conviction, maximum penalties for the defendants, and sentencing dates for each is set forth below.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the Special Agents and investigators within the U.S. Attorney’s Office for the Southern District of New York and the Suffolk County District Attorney’s Office.

Defendant	Offense of Conviction	Max. Penalty	Date of Sentencing
JAMES CAHILL	Honest Services Fraud Conspiracy	20 years in prison	March 7, 2023, at 4:00 p.m.
CHRISTOPHER KRAFT	Honest Services Fraud Conspiracy	20 years in prison	December 12, 2022, at 4:00 p.m.
PATRICK HILL	Honest Services Fraud Conspiracy	20 years in prison	December 19, 2022, at 2:00 p.m.
MATTHEW NORTON	Taft-Hartley Act Violation (Felony)	Five years in prison	December 13, 2022, at 11:00 a.m.
WILLIAM BRIAN WANGERMAN	Taft-Hartley Act Violation (Felony)	Five years in prison	January 30, 2023, at 4:00 p.m.
KEVIN MCCARRON	Taft-Hartley Act Violation (Misdemeanor)	12 months  in prison	March 14, 2023, at 2:00 p.m.
JEREMY SHEERAN	Taft-Hartley Act Violation (Felony)	Five years in prison	January 13, 2023, at 2:00 p.m.
ANDREW MCKEON	Taft-Hartley Act Violation (Felony)	Five years in prison	January 18, 2023, at 2:00 p.m.
ROBERT EGAN	Taft-Hartley Act Violation (Felony)	Five years in prison	March 14, 2023, at 12:00p.m.
SCOTT ROCHE	Taft-Hartley Act Violation (Misdemeanor)	12 months  in prison	Sentenced on December 6, 2022, to two years’ probation and $10,000 fine
ARTHUR GIPSON	Taft-Hartley Act Violation (Felony)	Five years in prison	March 9, 2023, at 2:30 p.m.

Attorney General James Secures Over $10 Billion from CVS and Walgreens for Communities Nationwide to Combat the Opioid Crisis

 

AG James Has Now Delivered More Than $2.5 Billion Total to Fund Opioid Abatement, Treatment, and Prevention in New York

New York Attorney General Letitia James today announced two multistate settlements totaling $10.7 billion with CVS and Walgreens for the pharmacies’ role in the opioid crisis in the United States. Attorney General James co-led a coalition of attorneys general in negotiating the settlement, which will provide $10.7 billion to communities nationwide and will require significant improvements in how CVS and Walgreens handle opioids prescriptions. CVS will pay $5 billion, and Walgreens will pay $5.7 billion. The state attorneys general on the executive committee, CVS, and Walgreens have agreed to this settlement, which will now be sent to other states for review and approval. New York will receive up to $458,210,563.35 as part of the settlement, bringing the total amount secured by Attorney General James to combat the opioid crisis in New York to more than $2.5 billion.

“In New York and across the nation, communities continue to mourn family, friends, and loved ones lost to the opioid crisis,” said Attorney General James. “Though we cannot reverse the devastation, my fellow attorneys general and I are committed to holding those who allowed this epidemic to run rampant through our country to account. We have now recovered $2.5 billion for New York from opioids manufacturers and distributors, and with those funds we will continue to support and expand abatement, treatment, and prevention efforts statewide.”

In addition to securing $10.7 billion to be divided among sign-on states, local governments, and tribes for opioid treatment, recovery, and abatement, the settlement announced today will include broad, court-ordered requirements CVS and Walgreens must comply with, including robust oversight to identify and prevent fraudulent or suspicious prescriptions.

The terms of the agreement will now be sent to the states for review. Each state will have until the end of 2022 to sign on, after which local governments nationwide will be able to join the deal in the first quarter of 2023. Further details regarding how the money will be distributed among localities is forthcoming.

Under the agreement, the payments are structured to ensure critical support in early years and sustained resources over time. Payments from CVS will be spread out over a period of 10 years, and payments from Walgreens will be spread out over a period of 15 years. Payments are expected to commence in the second half of 2023.

Joining Attorney General James in leading the executive committee that negotiated this agreement are the attorneys general of California, Colorado, Connecticut, Delaware, Illinois, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Nebraska, North Carolina, Ohio, Pennsylvania, Rhode Island, Tennessee, and Texas.

In 2021, Attorney General James championed legislation to create an opioid settlement fund to ensure these monetary settlements are invested in helping New Yorkers impacted by the opioid crisis. The bill, codified as New York Mental Hygiene Law Section 25.18, passed unanimously through the state legislature, and requires all funds secured in opioid settlements by Attorney General James — now totaling more than $2.5 billion — be used for opioid abatement, treatment, and prevention efforts in communities devastated by this epidemic.

Last month, Attorney General James and 16 other state attorneys general announced a $3.1 billion multistate settlement with Walmart, resolving allegations that the company failed to regulate opioid prescriptions at its stores. She also secured up to $523 million from Teva Pharmaceuticals, Ltd., its American subsidiary Teva Pharmaceuticals USA, and its affiliates (Teva) for their role in fueling the opioid crisis, resolving the remedies phase of New York’s opioid trial after she achieved a historic liability verdict following a seven-month jury trial against Teva in 2021. In June 2022, Attorney General James secured up to $58.5 million from Mallinckrodt for fueling the opioid crisis in New York. In December 2021, Attorney General James reached a $200 million agreement with Allergan. In September 2021, Attorney General James secured $50 million from Endo to combat the opioid crisis. In July 2021, Attorney General James secured a settlement with McKesson, Cardinal Health, and Amerisource Bergen that will deliver $1 billion to New York. In June 2021, Attorney General James announced a settlement that will deliver $230 million to New York and end Johnson & Johnson’s sale of opioids nationwide.  

Governor Hochul Signs Legislation to Protect Victims of Hate Crimes from Being Mistreated by Insurance Companies

 Legislation (S.7658-B/A.8869-B) Protects Individuals From Having Their Insurance Policy Cancelled or Having Rates Raised on The Basis of A Claimant Having Been Victim of A Hate Crime

 Governor Hochul today signed legislation (S.7658-B/A.8869-B) that protects victims of hate crimes from being mistreated by insurance companies. The new law prohibits insurers from canceling insurance, raising premiums, refusing to issue a policy or refusing to renew a policy solely on the basis that one or more claims have been made for a loss that is a result of a hate crime. This new law will apply to individuals, religious organizations, or nonprofits organized and operated for religious, charitable or educational purposes.

"New York stands strong against acts of hate wherever they occur, and we will continue to hold perpetrators of these horrific crimes accountable," Governor Hochul said. "If an individual is targeted for a hate crime, the last thing they should worry about is losing their insurance, and with this legislation we are taking action to protect victims and ensure every New Yorker is treated with dignity and respect."

Legislation (S.7658-B/A.8869-B) adds a new section to the insurance law prohibiting an insurer issuing policies in New York from cancelling, raising the premium, refusing to issue or refusing to renew a policy solely on the basis that one or more claims have been made against the policy during the preceding five years for a loss that is the result of a hate crime committed against the person or property insured, if the insured provides evidence to the insurer that the act causing such a loss is a hate crime. It also ensures perpetrators of hate crimes cannot use the legislation to protect themselves from rate increases or cancellations as a result of the crime they themselves committed.

Since taking office, Governor Hochul has taken robust action to combat hateful violence and all forms of hate crimes. In November, Governor Hochul signed legislation requiring individuals convicted of hate crimes to undergo mandatory training or counseling, as well as establish a statewide campaign for the acceptance, inclusion, tolerance, and understanding of diversity, including, but not limited to diversity based on religion, race, color, creed, sex, ethnicity, national origin, age, disability, sexual orientation, gender identity or expression. The Governor also announced $50 million to strengthen safety and security measures at nonprofit, community-based organizations at risk of hate crimes, in addition to $46 million in federal funding to 240 nonprofit organizations across the state facing an increased risk of terrorist attack. This builds on last year's $43 million in grants awarded to 362 nonprofit organizations to help boost security infrastructure and enhance preparedness against potential hate crime attacks. In addition, the Governor's FY2023 Enacted Budget expands arrest and bail eligibility for hate crimes, making all hate crimes arrest-eligible if the individual is eighteen or older.

MAYOR ADAMS APPOINTS THREE NEW MEMBERS TO PROCUREMENT POLICY BOARD

 

Guillermo Chacón Will Serve as New Chair

 

PPB Members Tasked With Establishing Rules Governing Procurement of Goods, Services, and Construction by NYC

New York City Mayor Eric Adams today announced the appointment of three new members to the Procurement Policy Board (PPB). The mayor named Guillermo Chacón as chair and Allison Stoddart and Wayne Lambert as new members to the board.

 

The PPB is responsible for promulgating rules and regulations for the procurement of goods, services, and construction by the City of New York. The new appointees will assist in driving procurement reform and amplifying the PPB’s mission to simplify, clarify, and modernize the city’s procurement system. Reducing red tape and promoting equitable procurement — especially for the city’s minority- and women-owned enterprises (M/WBEs) — continue to be key priorities for the Adams administration.

 

“Procurement policy may seem like an opaque issue — but this is how the city builds, delivers critical services, and so much more,” said Mayor Adams. “Even before I took office, we made clear that we would prioritize reforming procurement for our nonprofits, and through our Capital Process Reform Task Force, we are poised to significantly improve capital project delivery. These three new appointees will carry forward the mandate of ‘Getting Stuff Done’ and ensuring our procurement process is transparent, equitable, and accountable.”

 

“The reality is without procurement, New York City would not be able to provide New Yorkers with the quality of life they deserve,” said Mayor’s Office of Contract Services Director Lisa Flores. “How we procure goods and services, and the organizations we contract with, represent our city’s values and the work we put into realizing them. The PPB is tasked with the great responsibility to ensure the rules that govern how to do business with the city upholds the value we place on diversity and equity. This year’s PPB appointees mirror our city’s diversity — representing various professions and ethnic backgrounds. Congratulations to the appointees and thank you to Mayor Adams for his continued commitment to elevating the standard by which we conduct business.”

 

Reforming New York City’s broken procurement system has been a top focus since day one of the Adams administration. The administration’s commitment to rid the city’s procurement process of decades-old bureaucratic hurdles and outdated business practices led to the creation of the Joint Task Force to Get Nonprofits Paid on Time and the Capital Process Reform Task Force. The recommendations brought forth by these initiatives have proven instrumental in reforming the city’s procurement process — as evident by the more than $4.2 billion in contractual dollars unlocked through the “Clear the Backlog” initiative, a key recommendation of the Joint Task Force to Get Nonprofits Paid on Time. The recommendations of the two task forces made it clear that accountability, equity and fairness, transparency, and efficiency should be the focus of procurement reform. The existing procurement rules and policies are scheduled to be reviewed and updated by the PPB to ensure the recommendations of the two task forces are implemented.

 

“I am honored and humbled for this appointment by Mayor Eric Adams to serve on the Procurement Policy Board for our great city,” said Guillermo Chacón, chair, Procurement Policy Board. “I will bring my commitment and dedication, and I will give my best for this important appointment as chair for the PPB.”

 

The PPB is scheduled to meet on December 15, 2022, to review new legislative changes to city procurement and discuss changes to the existing rules and policies.