Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
May 18 —Disbarred attorney and embattled benefit plan promoter John J. Koresko was jailed for ignoring court orders requiring him to turn over $1.7 million and certain real property.
The May 5 bench warrant follows a seven-year litigation effort by the Department of Labor, which seeks to hold Koresko and associated entities liable for mishandling millions of dollars held by the prototype welfare plans they sold to employers. After Koresko failed to show up at an April 26 contempt hearing, Judge Wendy Beetlestone issued a warrant for his arrest and scheduled a hearing for May 18.
According to court documents, Koresko will remain in jail until he turns over $1.7 million and legal title to several condo units on the Caribbean island of Nevis.
Koresko's legal difficulties stem from two voluntary employees' beneficiary associations created and marketed by Koresko and his company, PennMont Benefit Services Inc. The DOL filed an enforcement action challenging these VEBAs in 2009. The department contended that the Koresko defendants violated the Employee Retirement Income Security Act by taking out life insurance policies on the lives of plan participants and then using policy proceeds for their own benefit.
Last month, the U.S. Court of Appeals for the Third Circuit rejected Koresko's appeal seeking to undo court orders holding him and his associates liable for more than $38 million in diverted benefit plan assets (67 PBD, 4/7/16).
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Text of the court documents are at http://www.bloomberglaw.com/public/document/SOLIS_v_KORESKO_et_al_Docket_No_209cv00988_ED_Pa_Mar_06_2009_Cour/10.
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