By STEVEN GREENHOUSE
January 28, 2000
Arthur Coia's love of Ferraris, including
one that cost more than $1 million, proved his undoing.
Until recently the president of the national
laborers' union, representing workers at the bottom of the construction
pecking order, Mr. Coia has agreed to plead guilty to fraud charges
for failing to pay about $100,000 in taxes on the purchase of
not just one Ferrari, but three.
The United States attorney for Massachusetts,
Donald K. Stern, said yesterday that Mr. Coia would plead guilty
to several schemes to cheat his home state, Rhode Island, and
the town of Barrington, R.I., out of sales taxes in the purchase
of the Ferraris. Mr. Coia owns a large seaside house in Barrington.
In one scheme admitted by Mr. Coia, he bought
a 1972 Ferrari Daytona for $1.05 million in 1990 and fraudulently
registered it in Middletown, Conn., which has lower taxes on car
purchases than Barrington. In that way, prosecutors say, he defrauded
Barrington out of $57,865.01 in taxes.
In another scheme that Mr. Coia admitted,
he bought a 1973 Ferrari 365 GTB/4 for $215,000 and obtained a
fraudulent invoice from a dealer who leased cars to his union,
indicating that the Ferrari cost only $2,160. In that way, he
paid Rhode Island just $151.20 in taxes for the car, rather than
the $15,050 he properly owed.
In the third scheme, Mr. Coia bought a 1991
Ferrari F-40 for $450,000, keeping the title in the name of a
friendly auto dealer. Two years later, he repurchased it for $275,000,
but he paid Rhode Island none of the 7 percent tax due on it,
thus defrauding the state out of $19,250.
Mr. Coia was so fond of these Italian sports
cars that in his office three blocks from the White House, he
used a Ferrari coffee mug, had Ferrari toy cars and displayed
Ferrari posters. Former union officials said that when union officials
who disdained such high living visited his office, he would temporarily
replace his Ferrari pictures with posters by Ralph Fasanella,
a painter famous for his loving depictions of factories.
On Jan. 1, Mr. Coia, 56, retired as president
of the Laborers' International Union of North America, saying
he wanted to spend more time with his family and was tired of
being hounded by investigators. He denied that his retirement
had anything to do with the investigation of his Ferrari dealings,
although several government and union officials said he was stepping
down because of government pressure.
Mr. Coia's defenders said that whatever his
faults, he left the 750,000-member union in far better shape than
when he took it over in 1993.
When the Justice Department threatened in
1995 to file a civil racketeering lawsuit to take over the union,
Mr. Coia persuaded the department to forgo the suit by agreeing
to set up the most sweeping in-house cleanup any union had undertaken.
An in-house prosecutor and in-house judge kicked out 220 corrupt
union officials, including 127 found to be members or associates
of organized crime.
Mr. Coia's father, who prosecutors say associated
closely with Raymond A. Patriarca Jr., the longtime New England
crime boss, once served as the union's secretary-treasurer and
helped pave the way for his son's ascension to the presidency.
The union's in-house prosecutors spent four
years investigating whether the younger Mr. Coia had ties to organized
crime, but he was cleared. The prosecutors did, however, uncover
Mr. Coia's tax-avoidance schemes for the Ferraris.
Mr. Stern, the prosecutor, said Mr. Coia
and the government would recommend two years of probation, payment
of about $100,000 in taxes owed and a $10,000 fine.
Mr. Coia also agreed to be barred from any
decision-making role in the union. The agreement allows him to
remain as the union's president emeritus, a ceremonial position
giving him a salary of $250,000 a year, the same he earned as