Thursday, 4:30 PM
AG announces indictment of 20 people in fraud scheme
By Michael Levenson and Mac Daniel, Globe Staff
Attorney General Thomas F. Reilly today announced 118 indictments against 20 people charged in a widespread investigation into payroll fraud within the Boston longshoremen’s union.
The indictments follow a year-long criminal investigation into payroll fraud among the longshoremen who offload container ships at the Massachusetts Port Authority’s Conley Terminal in South Boston.
Those indicted by a state grand jury include 14 longshoremen, two former business agents for the longshoremen, three managers and one Massport employee. All are scheduled to be arraigned in Suffolk Superior Court Sept. 5.
"We have uncovered a systemic problem...a culture of fraud that exists in the Longshoremen's union in the Port of Boston," Reilly said at a press conference at the Black Falcon Terminal in South Boston.
The indictments are related to allegations that union members placed their children on the union’s payroll at young ages, a move that gave the children advanced seniority if and when they got their first job on the docks.
The investigation found that six of the children on the payroll lists were ages 10 or younger.
Reilly said another scheme involved longshoremen being credited for hours they did not work in 2003 and 2004. The practice allegedly involved longshoremen with more hours agreeing to have payroll records show their hours were worked by a longshoreman with less hours, allowing more longshoremen to achieve higher benefit levels.
Three longshoremen were also indicted for unemployement fraud.
In June 2005, Massport officials said an audit of alleged payroll fraud at the terminal found at least 12 longshoremen had been paid a higher wage rate than they deserve, given their seniority level.
The discrepancies were found in an examination of payroll records of the 174 longshoremen who worked the Conley Terminal, officials said.
In one case, a Massport spokeswoman said records showed that one longshoreman being scrutinized would have had to work on docks when he was 14 years old to deserve his current pay rate.
Massport launched the audit after hearing allegations that as many as 30 children of longshoremen as young as 2 were put on the payrolls of International Longshoremen's Association Locals 799, 800, and 805 over the last two decades. Reilly's office immediately launched a criminal probe into the alleged scheme.
