Sergio Acosta, Embezzlement, New Jersey 2018

TRENTON, N.J. – In a shocking case of union corruption, former Union Official Sergio Acosta, 65, of Utuado, Puerto Rico, has pleaded guilty to embezzling funds from the union’s employee benefit plan.

According to court documents, Acosta was the former president and a representative of United Auto Workers Local 2326, as well as a trustee of its health and welfare fund. He admitted to embezzling funds from the union’s employee benefit plan, specifically the United Auto Workers Local 2326 health and welfare fund.

The scheme, which dated back to 2001, involved Acosta and co-conspirator Lawrence Ackerman, 53, of Old Tappan, New Jersey. Ackerman allegedly formed Atlantic Business Associates (ABA) and other shell companies to use the Local 2326 welfare fund to provide medical insurance coverage to individuals who were not employees of ABA and therefore ineligible to participate in the union’s welfare fund.

These individuals were willing to pay excessive monthly premiums to obtain medical coverage provided by Local 2326 welfare fund because they were unable to get similar coverage elsewhere. Local 2326 was also obligated to pay contributions for its own staff employees to the welfare fund, which would in turn pay premiums to Blue Cross Blue Shield. However, based on the hundreds of ineligible enrollees that were recruited by Ackerman and permitted to use the Local 2326 fund, Acosta failed to pay premiums for his own staff employees that were still due to the fund from July 2011 through October 2012.

Acosta faces a maximum potential penalty of five years in prison and a $250,000 fine. Restitution will be determined at his sentencing, which is scheduled for Sept. 21, 2018. Acosta and Ackerman were originally charged by indictment with conspiracy to defraud Horizon Blue Cross Blue Shield and the Local 2326 health and welfare fund with fraudulent health care claims. Those charges against Acosta will be dismissed at sentencing.

The investigation into the scheme was conducted by special agents of the U.S. Department of Labor, Office of Inspector General, under the direction of Acting Special Agent in Charge Peter Nozka in New York; and the Office of Employee Benefit Security Act (EBSA), under the direction of Acting Regional Director Thomas Licetti in New York.

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