Ex-union official admits embezzling

5/12/2009

As business manager of Laborers Union Local 500, Steven Thomas was charged with looking after the union s financial welfare a trust he admitted Monday that he violated by embezzling thousands of dollars.

Thomas, 41, of 1935 Wellesley Drive, pleaded guilty in U.S. District Court in Toledo to one count of labor union embezzlement for using union money to pay for visits throughout 2004 to two strip clubs, where he spent about $17,500. He faces a maximum of five years in prison on the charge, but federal guidelines put his possible sentence in the 6-to-12-month range.

A second count of the charge will be dismissed when he is sentenced Aug. 4.

When asked by Judge Jack Zouhary why he started the criminal behavior, Thomas answered that he was the head of an organization for the first time and was going to contest the business manager office.

There was a political aspect to it, he said. He declined to comment after the hearing.

Mr. Thomas is a former member of the boards of Toledo Public Schools and the Toledo-Lucas County Public Library.

Questionable spending by Thomas and other Local 500 officials was first reported in 2006 by The Blade, which reported that Thomas drew a union salary of $130,638 a year, drove a union-provided luxury full-size sport utility vehicle, and had an expense account that exceeded $30,000 a year.

Subsequent stories detailed his and other union officials spending at area strip clubs at a time when they eliminated Christmas and Thanksgiving gifts of $15 each for members and retirees in what were called cost-cutting moves.

The federal charges against Thomas and a fellow former union officer, Thomas Leonard, followed a lengthy Department of Labor investigation. In 2006, the parent organization of Local 500, Laborers International Union of North America, filed disciplinary charges against the men and removed them from office.

Criminal indictments were filed against both men July 23, nearly two years after the allegations of embezzlement surfaced.

Assistant U.S. Attorney Thomas Karol said yesterday that from December, 2003, to December, 2004, Thomas charged drinks and entertainment at two strip clubs: Scarlett s Gentlemen s Club in Toledo and Kahoot s Gentlemen s Club in Columbus.

He used credit cards either paid directly by the union or for which he submitted receipts for reimbursement, Mr. Karol said.

On the charge statements, the names of the establishments were not listed, he added, so there was no indication that he was in fact making charges at strip clubs.

None of the purchases, Mr. Karol added, was for business purposes.

The second count, which will be dismissed, alleged that Thomas received cash advances for travel between September, 2001, and October, 2005, that equaled about $11,000, but for which he did not provide adequate receipts.

Although the count will be dropped, Thomas will be responsible for restitution for the travel expenses as part of the negotiated plea agreement.

According to the government, Thomas owes a total of about $28,000 in restitution, of which he has paid $10,000.

Defense attorney Jon Richardson said some of that figure has been contested, but a final restitution figure should be determined at the sentence.

Mr. Karol said after the hearing the agreement was made to dismiss one charge because it did not affect the amount of restitution or possible sentence.

Steven is determined to get this episode behind him, Mr. Richardson said after the hearing. What we did today is the first step in accomplishing that.

Thomas Leonard, the union s former recording secretary, has been sentenced.

He pleaded guilty Oct. 2 to using a credit card given to him by the construction union to pay $4,386 in expenses at the two strip clubs and was sentenced in January to one year of probation.

Since the discovery of the misspent funds, changes have been made that now require Local 500 business agents to complete daily activity reports of who they talk to and where they go. Credit card use also is monitored.

Contact Erica Blake at:eblake@theblade.com or 419-213-2134.