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Two Former Executive Board Members of Bus Drivers' Union Plead Guilty
in Manhattan Federal Court
to Extortion Conspiracy
PREET BHARARA, the United States Attorney for the
Southern District of New York, announced that NICK MADDALONE and
PAUL MADDALONE, two former executive board members and assistant
trustees of Local 1181 of the Amalgamated Transit Workers Union
("Local 1181"), pleaded guilty today in Manhattan federal court
to extortion conspiracy for their participation in a decades-long
scheme to obtain corrupt cash payments from the owners of various
bus companies that employed Local 1181 members.
According to the Indictment and other documents filed
in the case:
Local 1181 is a union which represents approximately
15,000 bus drivers and bus escorts who are employed by companies
that contract with the New York City Department of Education to
provide students with school bus transportation to public schools
throughout New York City. From at least the 1980s through 2006,
the Genovese Organized Crime Family—a criminal organization
that is part of La Cosa Nostra, commonly referred to as the
"mafia"—influenced and asserted control over Local 1181,
including by appointing certain individuals to serve as officers
for Local 1181. The defendants served as members, delegates,
executive board members, and assistant trustees of Local 1181—NICK MADDALONE from approximately 1984 through 2008, and PAUL
MADDALONE from approximately 1993 through 2008.
From at least the 1980s through 2006, various Local
1181 officers were involved in a wide-ranging scheme to solicit,
collect, and receive illegal cash payments of tens of thousands
of dollars from bus company owners and operators whose employees
were members of Local 1181, and from companies whose employees
were not Local 1181 members. The MADDALONES participated in this scheme with other Local 1181 officers, including SALVATORE
BATTAGLIA, who was the President of Local 1181 and a member of
the Genovese Organized Crime Family, and JULIUS BERNSTEIN, who
was Secretary-Treasurer of Local 1181 and an associate of the
Genovese Organized Crime Family. The MADDALONES and other
participants in the scheme used their union status and, as
needed, their organized crime status, as a means of extorting
tens of thousands of dollars in payments from bus company owners
through intimidation and threats.
NICK MADDALONE and PAUL MADDALONE are the fourth and
fifth high-ranking Local 1181 officials to be convicted in
Manhattan federal court as part of this investigation. BATTAGLIA
pleaded guilty in January 2008, to racketeering, extortion, and
labor law violations and was sentenced in June 2008 to 57 months
in prison. BERNSTEIN pleaded guilty in August 2006 to
racketeering, extortion, robbery, gambling, and obstruction of
justice, and died before a final judgment was issued in the
matter. Former Local 1181 Director of Pension and Welfare ANNE
CHIAROVANO pleaded guilty to the obstruction of the investigation
into the connection between Local 1181 and the Genovese Organized
Crime Family, and was sentenced in January 2007 to five months in
prison to be followed by five months of home confinement.
NICK MADDALONE, 54, of Staten Island, New York, and
PAUL MADDALONE, 60, of Neponsit, New York, each pleaded guilty to
one count of extortion conspiracy. Each faces a maximum sentence
of 20 years in prison on the extortion conspiracy charge.
Sentencing is scheduled for December 14, 2009, at 11 a.m.
Mr. BHARARA stated, "Today's guilty plea is a reminder
of the mafia's commitment to corrupt even the most basic
municipal services to enrich itself. Nick and Paul Maddalone
used their high-ranking union status and organized crime ties to
shake down bus company owners who transported the City's
children. This Office will continue to seek out members and
associates of the mafia throughout New York City who extort
honest and hardworking men and women."
Mr. BHARARA praised the work of the Federal Bureau of
Investigation; the United States Department of Labor, Office of
the Inspector General; the United States Department of Labor,
Office of Labor Management Standards; and the New York City
Police Department. He added that the investigation is
continuing.
Assistant United States Attorneys ELIE HONIG and
KENNETH POLITE are in charge of the prosecution, which is being
handled by the Office's Organized Crime Unit.
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