New York Times - January 28, 2000 New York Times
Ex-Union Leader to Admit Ferrari Fraud
By STEVEN GREENHOUSE
Arthur Coia's love of Ferraris, including one that cost more than $1 million, proved his undoing.
Until recently the president of the national laborers' union, representing workers at the bottom of the construction pecking order, Mr. Coia has agreed to plead guilty to fraud charges for failing to pay about $100,000 in taxes on the purchase of not just one Ferrari, but three.
The United States attorney for Massachusetts, Donald K. Stern, said yesterday that Mr. Coia would plead guilty to several schemes to cheat his home state, Rhode Island, and the town of Barrington, R.I., out of sales taxes in the purchase of the Ferraris. Mr. Coia owns a large seaside house in Barrington.
In one scheme admitted by Mr. Coia, he bought a 1972 Ferrari Daytona for $1.05 million in 1990 and fraudulently registered it in Middletown, Conn., which has lower taxes on car purchases than Barrington. In that way, prosecutors say, he defrauded Barrington out of $57,865.01 in taxes.
In another scheme that Mr. Coia admitted, he bought a 1973 Ferrari 365 GTB/4 for $215,000 and obtained a fraudulent invoice from a dealer who leased cars to his union, indicating that the Ferrari cost only $2,160. In that way, he paid Rhode Island just $151.20 in taxes for the car, rather than the $15,050 he properly owed.
In the third scheme, Mr. Coia bought a 1991 Ferrari F-40 for $450,000, keeping the title in the name of a friendly auto dealer. Two years later, he repurchased it for $275,000, but he paid Rhode Island none of the 7 percent tax due on it, thus defrauding the state out of $19,250.
Mr. Coia was so fond of these Italian sports cars that in his office three blocks from the White House, he used a Ferrari coffee mug, had Ferrari toy cars and displayed Ferrari posters. Former union officials said that when union officials who disdained such high living visited his office, he would temporarily replace his Ferrari pictures with posters by Ralph Fasanella, a painter famous for his loving depictions of factories.
On Jan. 1, Mr. Coia, 56, retired as president of the Laborers' International Union of North America, saying he wanted to spend more time with his family and was tired of being hounded by investigators. He denied that his retirement had anything to do with the investigation of his Ferrari dealings, although several government and union officials said he was stepping down because of government pressure.
Mr. Coia's defenders said that whatever his faults, he left the 750,000-member union in far better shape than when he took it over in 1993.
When the Justice Department threatened in 1995 to file a civil racketeering lawsuit to take over the union, Mr. Coia persuaded the department to forgo the suit by agreeing to set up the most sweeping in-house cleanup any union had undertaken. An in-house prosecutor and in-house judge kicked out 220 corrupt union officials, including 127 found to be members or associates of organized crime.
Mr. Coia's father, who prosecutors say associated closely with Raymond A. Patriarca Jr., the longtime New England crime boss, once served as the union's secretary-treasurer and helped pave the way for his son's ascension to the presidency.
The union's in-house prosecutors spent four years investigating whether the younger Mr. Coia had ties to organized crime, but he was cleared. The prosecutors did, however, uncover Mr. Coia's tax-avoidance schemes for the Ferraris.
Mr. Stern, the prosecutor, said Mr. Coia and the government would recommend two years of probation, payment of about $100,000 in taxes owed and a $10,000 fine.
Mr. Coia also agreed to be barred from any decision-making role in the union. The agreement allows him to remain as the union's president emeritus, a ceremonial position giving him a salary of $250,000 a year, the same he earned as president.