Please note: As of January 20, 2021, information in some news releases may be out of date or not reflect current policies.

News Release

Federal Court Sentences Former Autoworkers’ Union Official After Guilty Plea for Health and Welfare Fund Embezzlement

NEW YORK – After an investigation by the U.S. Department of Labor's Employee Benefits Security Administration (EBSA), the U.S. District Court for the District of New Jersey has sentenced Sergio Acosta – the former president and a representative of United Auto Workers Local 2326 in Edison, New Jersey – to three years of probation, and ordered him to pay $32,000 in restitution for embezzling funds from the union's employee benefit plan.

The court sentenced Acosta - formerly of Passaic, New Jersey - after he pleaded guilty in April 2018 to a superseding information charging him with one count of theft, embezzlement, and conversion of money and funds of an employee welfare benefit fund.

EBSA investigators found Acosta served as a trustee of Local 2326's health and welfare fund. Insurance broker Lawrence Ackerman of Old Tappan, New Jersey, formed Atlantic Business Associates (ABA) and other shell companies in 2001 to use the union's 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 – who Ackerman recruited – paid excessive monthly premiums for medical coverage provided by Local 2326 welfare fund as they could not get similar coverage elsewhere.

Investigators found Acosta violated the Employee Retirement Income Security Act of 1974 when he withheld $32,000 in contributions from July 2011 through October 2012 to pay premiums to Blue Cross Blue Shield for his staff's medical insurance. Acosta had hoped the significant contributions to the welfare fund by ineligible enrollees' and administrative fees through his arrangement with Ackerman would hide his embezzlement.

Acosta and Ackerman were originally charged by indictment in January 2017 with two counts of conspiracy to commit healthcare fraud. Ackerman also pleaded guilty to one substantive count of healthcare fraud, and is scheduled to be sentenced in March 2019.

"The prosecution of theft and embezzlement from employee benefit plans supports the U.S. Department of Labor's mission to protect the rights of America's employees, including the right to receive benefits earned through employer sponsored retirement and health benefit plans," said Employee Benefits Security Administration Regional Director Darren Cohen, in New York. "EBSA will continue to aggressively investigate such crimes on behalf of employees nationwide."

EBSA's New York Regional Office, and the Department of Labor's Office of Inspector General (OIG) and Office of Labor-Management Standards (OLMS) investigated the case. Senior Litigation Counsel V. Grady O'Malley of the Organized Crime/Gangs Unit of the U.S. Attorney's Office in Newark prosecuted the case.

Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Additional information can be found at

Employee Benefits Security Administration
January 31, 2019
Release Number
Media Contact: Joanna Hawkins
Media Contact: Leni Fortson