New York Times
Investigators Say Elevator Union Members Were Paid Millions For No-ShowJobs
By STEVEN GREENHOUSE
January 5, 2002
Federal law enforcement officials say they are investigating a network of no-show jobs in which members of the elevator constructors union bilked New York City's building industry out of millions of dollars.
As part of the scheme, investigators say, members of the union often received more than $3,000 a week by holding a regular job as well as one or two no-show jobs.
Two workers who asked union officials to investigate the no show jobs, complaining that it stole work from unemployed union members, said they were attacked after a union meeting, with one of them being kicked in the teeth.
In papers filed in federal court in Brooklyn, F.B.I. investigators detailed an elaborate scheme in which Matthew Joseph Downey, a member of the union, received more than $1.5 million over three years from workers holding the no-show jobs. In November, Mr. Downey was indicted on charges of obstructing justice and urging two union members to lie to a grand jury investigating no-show jobs.
Joseph M. Bowen, an F.B.I. special agent, described in a series of criminal complaints how union members received payments for no-show work at major construction projects, including 10 Rockefeller Plaza and a Marriott Hotel on Third Avenue.
Before overtime, union members often earn $1,400 a week operating the temporary elevators at a single construction site. They can often earn twice that by also holding a no show job and working overtime. The court papers suggest that the scheme has inflated construction costs citywide by millions of dollars in recent years.
Mr. Downey's lawyer, Stephen Scaring, denied any wrongdoing by his client, saying that prosecutors were trying to pressure Mr. Downey to provide evidence against others. Mr. Scaring said he expected there would be additional indictments soon, although officials with the F.B.I. and the United States attorney in Brooklyn declined to comment on any future actions.
John G. Green, president of Local 1 of the International Union of Elevator Constructors, insisted that his union and its members were clean.
"There are no no-show jobs," he said. "We're 107 years in existence and we never had any problem whatsoever about this kind of operation that they're making accusations about."
Mr. Green said his union was cooperating with federal investigators and provided all the documents requested on hours worked and other matters.
"If they have proof about all these things, then they should by all means show it to me," Mr. Green said. "There is no such thing as somebody not showing up and getting paid."
In September 1999, the United States attorney in Brooklyn filed a criminal complaint against Mr. Green's son-in-law, Terence Carr, charging him with holding at least seven no show jobs in 1997 and 1998.
Prosecutors said that for one day alone — April 27, 1998 — Mr. Carr had been paid for 30 hours of work: for 10 hours, including 2 overtime hours, at 10 Hanover Square; for 12 hours, including 4 overtime hours, at Riverside South; and for 8 hours at Battery Park City.
"There was no such thing as they're babbling about the son in- law," Mr. Green said. "He never received any checks improperly from anybody."
Seeking to build their case, federal prosecutors withdrew that complaint against Mr. Carr and three other union members accused of holding no-show jobs, reserving the right to indict them later.
The local's 2,000 members install new elevators and run temporary ones that carry workers and building materials to upper floors at construction sites. Under union contracts, only members of Local 1 can operate the temporary elevators.
But one worker, who testified before the federal grand jury in Brooklyn and spoke on condition of anonymity, said that because of no-show jobs, workers from other construction trades often have to run the elevators themselves.
One prominent construction executive who insisted on anonymity said some industry officials have looked the other way on no-show elevator jobs, believing that they were reserved for injured or sick workers who badly needed the income.
Two union members, Martin Hastings and Stephen Brennan, said two years ago that after a union meeting in Long Island City, two large men beat and bloodied Mr. Brennan, with one kicking him in the teeth. Mr. Hastings had angered some union officials by asking the union to investigate the widespread allegations of no-show jobs.
At the meeting, Mr. Brennan had seconded a nomination for Mr. Hastings to run for business agent. Mr. Brennan has since left the elevator industry and the union, saying he feared for his safety.
In court papers, Agent Bowen said he had been investigating no-show jobs since December 1997, working with the Department of Labor and the Internal Revenue Service.
"Local 1 members routinely get paid for hours at which they were not present at the job sites," Mr. Bowen said in a criminal complaint and affidavit filed in November. "The Department of Labor's analysis reveals dozens of instances of operators being paid for supposedly being at two different job sites at the exact same time."
In the criminal complaint against Mr. Downey, federal investigators said the no-show scheme involved at least 30 union members. The complaint suggests that Mr. Downey coordinated much of the scheme and had many participants deposit some of their no-show checks in an account he set up under the name "Mattlynn" at a Bank of New York branch on Long Island.
The complaint stated, "In total, between 1996 and 1998, more than $1.5 million worth of third-party checks — more than 1,400 — of this type were deposited into the Mattlynn account." It added that the endorsements on all the checks appeared to have been written by the same person, but in 30 different names. The F.B.I.'s handwriting experts concluded that the handwriting matched examples of Mr. Downey's writing.
Agent Bowen said in court papers that two cooperating witnesses who acknowledged holding no-show jobs had deposited checks into Mr. Downey's Mattlynn account.
The criminal complaint accompanying the Downey indictment said one union member had secretly recorded a conversation with Mr. Downey. Mr. Downey is recorded as telling him: "If a guy says to you, `Did you give Downey permission to cash your check?' `Absolutely, he cashed my check.' `Why?' `Saved me from going to the bank.'"
Later, the complaint quoted Mr. Downey as saying that what "you should maintain all the time is that I was on every" job. "They can't disprove it."
Mr. Downey's lawyer, Mr. Scaring, said, "Mr. Downey denies all these accusations."