Most of our readers know that various penalties may be imposed for failure to file returns or information statements on a timely basis with either the IRS or the Department of Labor (DOL), the principal regulators of retirement and welfare benefit plans.But what about potential criminal liability for the unscrupulous – those who not only are remiss, but who willfully take advantage of plan participants and their retirement plans?It may be sufficient to merely establish that the defendant acted in "reckless disregard" of the interests of the plan.In one case, a jury instruction of "deliberate indifference" was upheld.In turn, ERISA section 501 makes it a crime for any person to willfully violate any of the reporting, disclosure, and record keeping provisions of ERISA Title I or any regulation or order issued under any such provisions.
There are unfortunate cases, however, and there are criminal sanctions in both federal and state law to deter and punish malfeasance, fraud, deception and other defined misdeeds.
If the intent to commit the crime can't be proven directly, it usually must be inferred from circumstantial evidence.
It is possible in most pension or benefit crimes to infer this intent from the fact that the actions were unauthorized or without benefit to the plan.
At the heart of the seemingly mundane tasks of compliance and reporting for ERISA covered plans, section 1027 of Title 18 makes it a crime to knowingly falsify documents or conceal or misrepresent facts required to be disclosed, published, filed, kept, or certified under ERISA Title I.
It also covers documents and facts that are necessary to verify, explain, clarify or check for accuracy of any such report or document.