Contractor with ties to Johnny Doc pleads guilty to tax fraud and defrauding union benefit fund

Donald “Gus” Dougherty, a close associate of Philadelphia union leader John “Johnny Doc” Dougherty, pleaded guilty Thursday in federal court to tax fraud and theft of employee benefits.

First Assistant U.S. Attorney Jennifer Arbittier Williams said that the 54-year-old Gus Dougherty — who is not related to the politically powerful union leader but has been a lifelong friend — agreed to pay $92,913 in taxes due to the IRS as a result of false business deductions for what were actually expenditures for Dougherty’s personal benefit.

Williams said Dougherty, the owner of Dougherty Electric Inc., also agreed to pay $266,000 in restitution to the International Brotherhood of Electrical Workers Local Union 5 in Pittsburgh because he failed to make $266,000 in contributions to Local 5′s employee benefit funds in violation of the collective bargaining agreement between Dougherty Electric and Local 5.

Dougherty, of Philadelphia, pleaded guilty before U.S. District Judge Michael M. Baylson to one count of filing a false federal income tax return and one count of theft of employee benefit funds.

In 2008, Dougherty pleaded guilty to defrauding John Dougherty’s IBEW Local 98 out of more than $500,000, and for providing $115,000 worth of free renovations to John Dougherty’s Philadelphia home.

Part of that plea deal included a provision to avoid testifying against John Dougherty. After Gus Dougherty was released from prison in 2010, Local 98 continued to provide his company funding. Prosecutors objected to the payments at the time, saying they appeared to be an attempt to help Gus Dougherty pay off his restitution debts.

On Thursday, Gus Dougherty agreed to pay all restitution still owed in the previous case.

“Donald Dougherty has a track record of trying to skirt the law and defraud hard-working individuals,” Williams said in a statement. “But the government also has a track record of convicting Dougherty for his crimes. And we will continue to do just that with every criminal who attempts this kind of scheme.”

Gus Dougherty’s plea deal follows his indictment less than two months ago.

His attorney, Eric W. Sitarchuk, declined to comment on the plea.

Sitarchuk said he may comment after Dougherty’s sentencing, which is tentatively scheduled for May 18.