July 7, 1980

UPI MIAMI, July 6 A Federal investigation of the Laborers International Union has uncovered evidence of multimillion dollar kickbacks to union officials and organized crime figures in the purchase of insurance for the union's 500,000 members, The Miami Herald reported today.

The Justice Department is preparing to file charges against several union leaders in south Florida, Chicago and New England, the newspaper said. "This is going to be the most important labor corruption case in recent years," an unidentified Federal investigator was quoted as saying.

The Herald said that the Justice Department had prepared charges against about 20 union officers and organized crime figures but had delayed issuing them because of bickering among prosecutors in south Florida and Boston over who should get credit for uncovering the alleged participation of Raymond Patriarca, a reputed New England crime leader.

The Federal Bureau of Investigation, the Justice Department's Organized Crime Strike Force, the Labor Department and the Internal Revenue Service have participated in the investigation, the newspaper said.

The investigation began in 1977 with the embezzlement convictions of two union officials and is based in large part on evidence given by Joseph Hauser, described as a convicted insurance swindler who said that he bribed Laborers Union officials for a decade.

Mr. Hauser illegally diverted $11.7 million in proceeds of life insurance sales to the union, a Senate committee report said, using parts of it to pay off union officials, to provide a $51,000 yacht for a Fort Lauderdale union official and to establish a Chicago insurance agency for the son of a union official.