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Wednesday, August 27, 2014

Maryland Man Pleads Guilty to Falsifying Employee Retirement Plan Documents to Avoid Contributing to Benefit Plans

An owner of an electrical contracting company pleaded guilty today to falsifying disclosure documents required under the Employee Retirement Income Security Act (ERISA), by intentionally under-reporting hours worked by employees to avoid contractually required contributions to employee benefit plans.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland, Special Agent in Charge Bill Jones of the Department of Labor Office of Inspector General, Office of Labor Racketeering and Fraud Investigations for the Washington, D.C. Regional Office and Director Mark Machiz of the Department of Labor’s Employee Benefits Security Administration Philadelphia Regional Office made the announcement.

At the plea hearing, Michael E. Sewell, 50, of Street, Maryland, admitted that the union agreement between his company, MESCO Inc., and the International Brotherhood of Electrical Workers Local 24 required him to make monthly contributions to seven employee health, welfare and pension benefit plans, and to file monthly remittance reports with the administrators of those plans.

Beginning in January 2009, however, Sewell began paying some wages earned by MESCO employees from the payroll of a second company he owned, Michael E. Sewell and Associates Inc., and failed to report those wages in monthly remittance reports to the administrator of the benefit plans. In addition, Sewell failed to make the required contributions to the employee benefit plans for those unreported wages. As a result, Sewell failed to contribute over $199,000 to the employee benefit plans. Sentencing is scheduled for Oct. 30, 2014.

This case was investigated by the Department of Labor and is being prosecuted by Trial Attorney Vincent Falvo Jr. of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Martin J. Clarke of the District of Maryland.

Press Release Number: 
Updated September 15, 2014