ERISA Civil Violations
Failing to operate the plan prudently and for the exclusive benefit of participants.
Using plan assets to benefit certain related parties to the plan, including the plan administrator, the plan sponsor, and parties related to these individuals.
Failing to properly value plan assets at their current fair market value, or to hold plan assets in trust.
Failing to follow the terms of the plan (unless inconsistent with ERISA).
Failing to properly select and monitor service providers.
Taking any adverse action against an individual for exercising his or her rights under the plan (e.g., being fired, fined, or otherwise being discriminated against).
ERISA Criminal Provisions
EBSA also conducts investigations of criminal violations regarding employee benefit plans such as embezzlement, kickbacks, and false statements under Title 18 of the U.S. Criminal Code. Prosecution of these criminal violations are handled by U.S. Attorneys' offices. Title 18 contains three statutes which directly address violations involving employee benefit plans:
Theft or Embezzlement from Employee Benefit Plan (18 U.S.C. Section 664)
False Statements or Concealment of Facts in Relation to Documents Required by the Employee Retirement Income Security Act of 1974 (18 U.S.C. Section 1027)
Offer, Acceptance, or Solicitation to Influence Operations of Employee Benefit Plan (18 U.S.C. Section 1954).
ERISA also contains the following criminal provisions:
Section 411, Prohibition Against Certain Persons Holding Certain Positions
Section 501, Willful Violation of Title I, Part 1
Section 511, Coercive Interference. Persons convicted of violations enumerated in section 411 are subject to a bar from holding plan positions or providing services to plans for up to 13 years.
Decisions to seek criminal action turn on a number of factors including:
The egregiousness and magnitude of the violation
The desirability and likelihood of incarceration both as a deterrent and as a punishment
Whether the case involves a prior ERISA violator.
If an investigation reveals a violation of the civil provisions of ERISA, EBSA takes action to obtain correction of the violation. It is EBSA's policy to promote voluntary compliance with ERISA whenever possible. Making corrections to plans includes paying amounts to restore losses, disgorging profits, and paying penalty amounts (when applicable). Labor Department attorneys work with field offices to provide every opportunity for fiduciaries to comply with ERISA. If the persons involved take the proper corrective action, the department will not bring a civil lawsuit with regard to the issues involved. When voluntary compliance is not achieved, EBSA may refer a case to Labor Department attorneys for litigation. Plan assets recovered by EBSA go directly back to the plans and participants involved.
Health Fraud/Multiple Employer Welfare Arrangements (MEWAs)
A Multiple Employer Welfare Arrangement (MEWA) is a welfare benefit plan or other arrangement which is set up to benefit the employees of two or more employers. When small employers are either unable to find or can't afford the cost of health care coverage for their employees, they may look to MEWAs for coverage. EBSA continues to find instances where MEWAs have been unable to pay claims as a result of insufficient funding and inadequate reserves, or in the worst situations, where they were operated by individuals who drained the MEWA's assets through excessive administrative fees or by outright theft. EBSA's emphasis is on abusive and fraudulent MEWAs created by unscrupulous promoters which sell the promise of inexpensive health benefit insurance, but default on their obligations.
EBSA also investigates related criminal activities involving welfare benefit plans. Numerous schemes investigated by EBSA in the last few years have involved mail fraud, wire fraud, bankruptcy fraud, and other ERISA crimes. These criminal MEWA cases, which are prosecuted for the department by U.S. Attorneys' offices, have resulted in jail sentences and court ordered restitution against fraudulent MEWA operators.
For More Information concerning Caleb's case please contact:
Catherine Oliver Murphy
Office of the Solicitor
U.S. Department of Labor
Suite 630E, The Curtis Center
170 S. Independance Mall West
( 215 ) 861 - 5139
Office of Labor Racketeering and Fraud Investigations
Thomas F. Farrell, Assistant Inspector General
Richard S. Clark, Deputy Assistant Inspector General
200 Constitution Avenue, NW
Washington, DC 20210
Telephone: (202) 693-5229
Main Address and Phone Number
Gordon S. Heddell, Inspector General
Daniel R. Petrole, Deputy Inspector General
Office of Inspector General
200 Constitution Avenue, NW
Washington, DC 20210
Telephone: (202) 693-5100
Employers and workers with questions or concerns regarding their private-sector pension and health plans can contact the EBSA Washington district office at 301 -713-2000 or EBSA’s toll-free number of
1.866.444 -3272 .