Former Union Executive Indicted for Embezzlement of Employee Benefit Funds
NEWARK - A Mountainside man was arrested today, charged in a 59-count Indictment with conspiring to embezzle from the Hudson County District Council of Laborers and its employee benefit funds to support a luxurious lifestyle, U.S. Attorney Robert J. Cleary announced.
Carmelo J. Sita, 58, of Mountainside was arrested today for his alleged role in the conspiracy to embezzle from the Hudson County District Council of Laborers (HCDCL) and its employee benefit funds.
The federal Indictment naming Sita was unsealed today with Sita's arrest at his home early this morning by Special Agents of the FBI, according to Assistant U.S. Attorney Laura J. Kaplan.
If convicted, Sita faces a maximum of 10 years in federal prison and a $250,000 fine on each of two counts of embezzlement from a health care benefit program and on one count of health care fraud; a maximum of five years in prison and $250,000 fine on each of 28 counts of embezzlement from employee benefit funds; and a maximum of five years in prison and $10,000 fine on each of 23 counts of theft of union assets; a maximum of five years and $250,000 on each of five counts of filing false statements in connection with the federal Employee Retirement Income Security Act; and a maximum penalty of five years and $250,000 fine on one count of conspiracy.
Sita was the executive manager of the HCDCL Benefit Funds. The labor organization consisted of Locals 21, 31, 202 and 325.
According to the Indictment, the Benefit Funds included pension, welfare, annuity, vacation and training funds. The funds were established to provide union members and their beneficiaries with certain benefits including retirement benefits, medical coverage, supplemental retirement income and vacation pay.
From at least as early as January 1995 through March 1999, Sita wrote checks from the various benefit funds' checking accounts, and an account belonging to the HCDCL, to himself or directly to pay his personal expenses.
The Indictment charges that Sita used embezzled funds to pay for a Martha's Vineyard vacation home and boat, his monthly credit card debts, mortgage payments, lease payments on luxury vehicles, personal taxes and other items. In addition, Sita is charged with making false statements in connection with documents required to be kept pursuant to the Employee Retirement Income Security Act, in that Sita falsely represented in a disbursement log that he had made certain disbursements from his personal checking account on behalf of the benefit funds.
The Government is also seeking forfeiture of the defendant's Mountainside residence, Martha's Vineyard condominium, a Wellcraft boat and approximately $1,062,787, on the ground that the property and currency were derived from the embezzled funds.
The defendant is scheduled to appear today at 2:30 p.m. for an initial appearance before before U.S. Magistrate Judge Susan D. Wigenton.
An Indictment is a formal charge made by a grand jury, a body of 16 to 23 citizens. A grand jury may vote an Indictment if 12 or more jurors find probable cause to believe that the defendant has committed the crime or crimes charged.
Despite Indictment, every defendant is presumed innocent, unless and until found guilty beyond a reasonable doubt following a trial at which the defendant has all of the trial rights guaranteed by the U.S. Constitution and federal law.
Under U.S. Sentencing Guidelines, the judge to whom the case is assigned would, if a defendant is convicted, determine the actual sentence based upon a complicated formula that takes into account the severity and characteristics of the offense, any criminal history, if any.
Cleary credited Special Agents of the FBI, under the direction of Kevin P. Donovan, Special Agent in Charge of the FBI's Newark office; Special Agents of the U.S. Department of Labor, under the direction John McGlynn, Regional Inspector General for Investigations, Office of the Inspector General; Francis Clisham, Regional Director, Department of Labor Pension and Welfare Benefits Administration, New York Regional Office; and Ian Dingwall, Chief Accountant, Department of Labor, Pension and Welfare Benefits Administration, Office of the Chief Accountant, with developing the case against the defendant.
The Government is represented by Assistant U.S. Attorney Kaplan of the U.S. Attorney's Strike Force Division in Newark.