The managing partner and a principal at the accounting firm Armao LLP have been arrested on allegations of covering up a union officer’s alleged embezzlement of union funds. Managing partner The two leaders at Garden City, N.Y.-based Armao are accused of using false filings with the U.S. Department of Labor and Internal Revenue Service to cover up the embezzlement. Armao LLP specializes in labor unions and its web page says the fallowed about the managing partner, who admitted during the investigation that he knew about the alleged abuses: “Sal has a unique perspective…providing service to the labor union sector.”
The Department of Justice alleged that from about 2010 through 2014, the union president, not named in the announcement of the charges against the accountants, “repeatedly used Union funds to pay for his personal expenses, including payments for spa treatments, a gym membership, a second car, medical charges, unrelated union dues for an actors’ union, purchases from retail establishments, payments to personal credit cards, and ATM cash withdrawals.”
The union official, also a trustee of the plan, used his union card for personal expenses and then “reimbursed” the union with plans transferred from the plans.
The charges against Armao and Auer allege they classified those personal expenses as loans in accounting records and DOL filings. Armao is accused of following that practice for five years; Auer for one year.
Armao and Auer are each charged with one count of aiding and abetting embezzlement from a labor organization, one count of conspiracy to make false statements in employee benefit plan records and reports, and one count of making false statements in employee benefit plan records and Auer was also charged with lying to an agent from the department. Each of the four counts carries a maximum sentence of five years in prison.