2/6/08

Feds nab gov't union embezzler-family

An Ocean County (NJ) man admitted to a federal judge in Newark yesterday that he helped set up a job for his wife at a union local that paid her close to $100,000 over two years for little or no work. August "Augie" Vergallito, 72, of Brick, faces up to 16 months in prison when he is sentenced in May on a count of embezzling funds from the International Union of Production, Clerical and Public Employees Local 911. Vergallito's wife, Rhoda, 73, also pleaded guilty yesterday to embezzlement in connection with the fleecing of the local, while his daughter, Kim, 43, acknowledged lying to a federal grand jury that was investigating the matter. They, too, face sentencing in May.

Vergallito was accused last year of orchestrating a scheme that looted the local by using a fictitious president, padding the payroll with family members, conducting sham elections and failing to hold membership meetings.

Also charged with Vergallito and his family members were Charles Purcel, the local's bookkeeper and financial manager, and Isaac Barocas, an alleged associate of Vergallito's who prosecutors said served as president of the local.

Purcel has a trial date in the case later this month, while Barocas has entered a guilty plea, said Assistant U.S. Attorney V. Grady O'Malley. Members of Local 911, located in Brick, include bus drivers and employees of municipal water commissions.

Yesterday's hearing was held up for more than a half-hour when U.S. District Judge Susan D. Wigenton expressed concern over Vergallito's confusing answers to some of the questions that formed the factual basis of his plea.

When Assistant U.S. Attorney Lisa Colone asked him whether he had exercised control over Local 911 from 1999 through 2006, Vergallito replied: "I don't want to lie, I honestly can't recall that."

She later asked whether he had power over the local's hiring.

"Yeah, I'll say yes to anything," Vergallito responded.

He also put the blame exclusively on Purcel for raising his wife's salary for her no-show job as the local's office manager from $35,000 in 2005 to $58,000 the next year.

After a private session the judge held in chambers with the lawyers, the proceedings resumed and Vergallito answered with nothing more than a crisp "yes" to all of the questions posed to him by his lawyer, Paul Brickfield.

The judge accepted his plea after he said he purposely got his wife a full-time salary for a job that wasn't full-time, knowing it was wrong.

Vergallito and his wife may also be expected to make some restitution for the funds embezzled in the scheme. The amount will be offset by any money they eventually pay back as part of civil litigation involving the now-defunct Local 734 of the Laborers International Union of North America, O'Malley said.

The union's international brought suit against Vergallito and others claiming the local had been run in a corrupt manner. The case is pending in federal court in Newark.

Several years ago, a federal judge removed the administrators of Local 734's welfare and pension funds after an independent hearing officer found that friends, relatives and partners of Vergallito had been hired for non-essential or part-time jobs at grossly inflated salaries. The officer also raised questions about the local's ties to organized crime.

In 1996, Vergallito was barred from participating in any union matters for 13 years as part of a guilty plea he entered for activities in connection with his position as plan administrator of Local 734.

(nj.com)

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