Thursday, December 19, 2013

Mob Wives: “Cooking The Books” South Philly Style

Some of the Real Housewives are putting out cookbooks, like Teresa Giudice, who has bragged about her 5 or 6 cookbooks all the while she is in trouble for bankruptcy fraud. And, even our own Graziano sisters, Renee, Lana and Jennifer, have their own cookbook coming out, “How To Use A Meat Clever,” in early February. They are including traditional Italian family recipes along with personal stories. Cookbooks are nothing new for reality personalities. But “cooking the books,” now that’s another story altogether. That distinction belongs to South Philly mob wife, Alicia DiMichele Garofalo.

We learned, on this season of Mob Wives, that the Feds indicted Alicia DiMichele Garofalo with embezzlement of pension funds from the trucking company she and her husband, Edward, owned. Apparently, the Feds discovered Alicia’s alleged “hobby” through the wire tapped conversations they had on her husband. Alicia claims she did nothing wrong and blames it all on Edward. Pension manipulation is just one of several ways to “cook the books.” It got me curious as to how one might cook a book. Maybe Alicia was cooking them and didn’t even know it?

The law states: “Any person who embezzles, steals, or unlawfully and willfully abstracts or converts to his own use or to the use of another, any of the moneys, funds, securities, premiums, credits, property, or other assets of any employee welfare benefit plan or employee pension benefit plan, or of any fund connected therewith, shall be fined under this title, or imprisoned not more than five years, or both. As used in this section, the term “any employee welfare benefit plan or employee pension benefit plan” means any employee benefit plan subject to any provision of title I of the Employee Retirement Income Security Act of 1974.”

Now, let’s get a few facts about pension plans in place. Pensions plans are defined to pay out a certain amount of money to employees at retirement AND they usually must have enough money in there to pay benefits to all employees should the company fold. The money is typically invested in high yielding stocks for growth. If the pension fund earns money beyond what is expected, the company can claim some of that money as profit for itself. If a company underestimates what the investment on the pension from stocks is expected to be, in order to claim a larger profit for itself, that is one way of “cooking the books.” Basically, the “earnings” on the investment are manipulated so that more money can be applied to asset/profit for the owners and the pension plan is underfunded.

Another way a pension plan can be fraudulently manipulated is to take money withheld from employee paychecks, intended for the pension plan, and using it for personal gain. This seems to be an easier way for a bookkeeper to “cook the books,” as a they are typically the ones to do the payroll and allocate the money contributed by employees to their pension plans. Basically, the money contributed never makes it into the pension plan, but into the pockets of the embezzlers.

Of course, I didn’t get a peek at the books, but the indictment on Alicia reads: “The indictment also charges Colombo associate Garofalo and his wife, Alicia Dimichelle, with embezzlement from the welfare benefit plan and pension benefit plan funds operated on behalf of union laborers of the International Brotherhood of Teamsters, Local 282. As described in the detention memorandum, Garofalo and Dimichelle engaged in a double-breasting scheme* in which they used Colombo-controlled non-union shell companies, including DM Equipment, Big R Trucking, T&E Leasing, and Roman Sand and Stone, to circumvent Local 282 collective bargaining agreement union benefit contribution requirements.” The entire indictment, a good read, can be found here: FULL INDICTMENT

*The “double breasting” scheme is defined in the indictment.

While Alicia says she did nothing wrong, she did plead guilty. She is supposed to be sentenced in January, 2014. I find it hard to believe she didn’t know or participate in the embezzlement scheme, but then plead guilty. I find it hard to believe the Feds would charge her without real evidence, which I think would be readily available in the “books,” and in her handwriting. I find it hard to believe a person who would allegedly sell designer knockoffs as originals. I find it hard to believe someone who would lie to a judge about visiting her son at his dorm in Virginia, and then ends up in Las Vegas…tweeting what a great time she is having. Is this the same Alicia who was disgusted with all the lies, lies, lies and chinese food, she heard on the wire taps? Makes you wonder, doesn’t it?

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