Investigations

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January 23, 2017

Two New York Contractors Sentenced in $11 Million Union Benefits Fraud Scheme

On January 23, 2017, Toni Thomson, the former owner of Greenwood 2, LLC, part of the Rainbow Transport Corporation, was sentenced in U.S. District Court, New York, to three years’ probation and ordered to pay $1 million in restitution. On January 25, 2017, William Taylor, a former Rainbow dispatcher, was sentenced to three years’ probation and ordered to pay $4,836.45 in restitution, a $7,500 fine, and forfeiture in the amount of $4,831.67. They were sentenced for their roles in a union benefits fraud scheme related to various New York metropolitan transportation projects funded by the Federal Transit Administration (FTA).
 
Thomson previously pleaded guilty to embezzlement of union funds, and Taylor pleaded guilty to health-care fraud. Both pleas followed a March 2012 indictment that charged them with conspiracy, embezzlement, providing and accepting unlawful payments from a union representative, and health-care fraud.
 
Rainbow Transport included multiple nonunion trucking companies—Nicholas J, Happy Time, Marky OG, and SDT Hauling. Rainbow allegedly entered into a scheme with Greenwood 2, a unionized trucking company with the International Brotherhood of Teamsters Local 282, to defraud union benefit funds from their employees on projects receiving DOT grant funds. Thomson and others underreported drivers’ hours and falsely attributed union trucking hours to nonunion companies to avoid paying approximately $11 million in required hourly wage and union benefits.
 
During the alleged scheme, Rainbow Transport was a subcontractor on the New York City Transit Authority Second Avenue Subway (SAS) project, and Greenwood 2 was a subcontractor on both the SAS and the Port Authority of New York & New Jersey World Trade Center Transportation Hub project. Both projects were funded in part by FTA.
 
DOT-OIG is conducting this investigation jointly with the U.S. Department of Labor (DOL) Office of Inspector General, DOL’s Employee Benefits Security Administration, and the New York City Business Integrity Commission.