ERISA Disability Elements of Proof
The following discussion was prepared by the Labor-Management Unit
of the Organized Crime and Racketeering Section and previously published
in Criminal Case Prosecutions Involving Employee Benefit Plans:
Prosecutor's Guide (United States Department of Labor, Pension and
Welfare Benefits Administration, 1994). In order to establish a
violation of 29 U.S.C. § 1111 for a disqualifying crime committed on
or after October 12, 1984, the government must allege and prove the
following essential elements:|
- The jurisdictional entity involved is an employee benefit plan
within the meaning of ERISA (29 U.S.C. § 1001 et seq.).
- The defendant is a disqualified person who serves or permits
another disqualified person to serve in any of the prohibited capacities
specified in the statute. See, for example, United States v.
Smith, 698 F. Supp. 589 (E.D.Pa. 1988), aff'd without
opinion, 872 F.2d 415 (3d Cir. 1989), which held that the prohibited
capacity of "consultant" is broadly defined and includes compensated,
indirect assistance to an employee benefit plan by means of employment
with service providers to the plan. In rejecting defendant's argument
that section 1111 only prohibited direct employment of convicted persons
by an ERISA plan itself, the court concluded that "certain convicted
felons were prohibited, irrespective of their precise employment status,
from receiving compensation for advising or consulting employee benefit
plans." Id. at 698 F. Supp. 594.
- The disqualified person was convicted of one of the crimes
described in the statute within the last thirteen years, or has been
released from imprisonment resulting from a disqualifying conviction
within the last thirteen years, whichever is later.
- The defendant intentionally serves in a prohibited capacity or
knowingly and intentionally permits a disqualified person to serve in a
Only TWO categories of crimes must be felony convictions:
The following categories of crimes may be felonies or misdemeanors:
- A felony violation of Federal or state law involving controlled
substances defined in the Federal Comprehensive Drug Abuse Prevention
and Control Act of 1970 (21 U.S.C. § 802(6)); or
- "Any felony involving abuse or misuse of such person's position or
employment in a labor organization or employee benefit plan to seek or
obtain an illegal gain at the expense of the members of the labor
organization or the beneficiaries of the employee benefit plan."
- Robbery, Fraud, Murder, Bribery, Grand Larceny, Rape, Extortion,
Burglary, Kidnapping, Embezzlement, Arson, Perjury, Assault with Intent
- Any crime described in the Investment Company Act of 1940 at 15
U.S.C. § 80a-9(a)(1) -- this category describes persons convicted
within 10 years of any felony or misdemeanor involving the purchase or
sale of a security or arising out of such person's conduct as an
underwriter, broker, investment adviser, etc. or as a person required to
be registered under the Commodity Exchange Act;
- Any crime in ERISA (includes 29 U.S.C. §§ 1111, 1131,
- A violation of 29 U.S.C. § 186 (prohibited payments to labor
unions, labor union officials, and employee representatives);
- A violation of Chapter 63 of Title 18, United States Code (18 U.S.C.
§ 1341, et seq.; mail fraud, wire fraud, et
- A violation of 18 U.S.C. §§ 1503, 1505, 1510, 1951 or 1954;
- A violation of any criminal provision of LMRDA (29 U.S.C. §§
439, 501(c), 502, 503, 504, 522, 530 involving crimes against labor
organizations in the private sector);
- Conspiracy or Attempt to commit any crime described in section 1111;
- A crime in which any of the crimes described in section 1111 is an
element. See Postma v. Teamsters Local 294, 229 F. Supp
655 (N.D.N.Y.), aff'd, 337 F.2d 609 (2d Cir. 1964).
A crime whose conduct is substantially equivalent to a crime
described in section 1111 will also disqualify the convicted person.
See discussion above of section 1111's parallel statute, 29
U.S.C. § 504.
Except for the category of felonies involving abuse or misuse of
labor organization or benefit plan employment, the generic disqualifying
crimes need not be related to labor union or benefit plan operations.
See Lippi v. Thomas, 298 F. Supp 242, 247 (M.D. Pa) 1969).
See this Manual at 2449 and 2450 for form indictments.
[cited in USAM 9-138.030]