Severe Penalties for Accountants: 419 Welfare Benefit 412i Retirement Plans

Severe Penalties for Accountants: 419 Welfare Benefit 412i Retirement PlansIN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

HILDA L. SOLIS, SECRETARY : CIVIL ACTION

OF LABOR, UNITED STATES :

DEPARTMENT OF LABOR :

:

v. :

:

JOHN J. KORESKO, V, et al. : NO. 09-988

TABLE OF CONTENTS

I. Summary Judgment Standard. . . . . . . . . . . . . . . . . 3

II. Factual Background.. . . . . . . . . . . . . . . . . . . . 5

A. The REAL VEBA Employee Benefit Arrangement. . . . . . 5

B. The Parties.. . . . . . . . . . . . . . . . . . . . . 8

C. The Decor Plan, the Cetylite Plan, and the Castellano

Plan. . . . . . . . . . . . . . . . . . . . . . . . . 9

D. The Alleged Fiduciary Violations. . . . . . . . . . 12

III. Threshold Questions. . . . . . . . . . . . . . . . . . . 19

A. ERISA Coverage. . . . . . . . . . . . . . . . . . . 21

B. Coverage of Fiduciary Responsibility Provisions: The

“Top Hat” Exception.. . . . . . . . . . . . . . . . 37

C. Fiduciary Status. . . . . . . . . . . . . . . . . . 43

IV. ERISA Fiduciary Duties.. . . . . . . . . . . . . . . . . 61

A. ERISA Section 403, 29 U.S.C. § 1103.. . . . . . . . 63

B. ERISA Section 404, 29 U.S.C. § 1104.. . . . . . . . 66

C. ERISA Section 406(a)(1)(D), 29 U.S.C. 

§ 1106(a)(1)(D).. . . . . . . . . . . . . . . . . . 70

D. ERISA Section 406(b)(1), 29 U.S.C. § 1106(b)(1).. . 73

V. Relief.. . . . . . . . . . . . . . . . . . . . . . . . . 75

iIN THE UNITED STATES DISTRI