__________________ 

__________________ 

__________________ 

__________________ 

________________ 

Nos. 16-3806 & 17-1140 

IN THE UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

JOHN J. KORESKO, V, 

Appellant 

v. 

R. ALEXANDER ACOSTA, SECRETARY, 

UNITED STATES DEPARTMENT OF LABOR, 

Appellee. 

On Appeal from the United States District Court 

for the Eastern District of Pennsylvania 

Brief of Appellee Secretary of Labor 

NICHOLAS C. GEALE THOMAS TSO 

Acting Solicitor of Labor Counsel for Appellate 

and Special Litigation 

G. WILLIAM SCOTT STEPHANIE B. BITTO 

Associate Solicitor Trial Attorney 

 for Plan Benefits Security U.S. Department of Labor 

Office of the Solicitor 

Plan Benefits Security Division 

200 Constitution Ave., NW 

Room N-4611 

Washington, DC 20210 
TABLE OF CONTENTS 

TABLE OF AUTHORITIES ....................................................................................iv 

STATEMENT OF JURISDICTION..........................................................................1 

STATEMENT OF RELATED CASES.....................................................................1 

STATEMENT OF THE ISSUES...............................................................................1 

STATEMENT OF THE CASE..................................................................................1 

1. The Contempt Order ......................................................................................3 

2. The Garnishment Order ...............................................................................14 

SUMMARY OF THE ARGUMENT ......................................................................15 

ARGUMENT ...........................................................................................................17 

I. The District Court Acted Within Its Discretion and in Accordance with the 

 Law When It Entered the Contempt Order and the Garnishment Order ..........17 

A. The District Court Met the Standards for Holding a Person in Contempt ..17 

1. The District Court Complied With All Requirements for a Contempt 

Order ......................................................................................................18 

a. Koresko Failed to Comply with Valid Court Orders and He Can 

 Not Collaterally Attack the Merits of Those Orders ......................19 

b. Koresko had Knowledge of the Orders ..........................................20 

c. Koresko Disobeyed the Orders.......................................................21 

i 
 TABLE OF CONTENTS-(continued) 

2. Koresko Has No Grounds for an Impossibility Defense ......................24 

3. The Contempt Order Was Based on Violations of Orders that Were 

 Not Supplanted by the Final Judgment ...............................................28 

B. Koresko is Not Imprisoned for Criminal Contempt or to Collect a Debt ..29 

1. Koresko's Identified "Attributes" Do Not Transform the Civil 

 Contempt Order into a Criminal Contempt Order ...............................30 

2. The Government Seeks the Recovery of Plan Assets .........................32 

3. The Contempt Order Was Not for Debt Collection but Compliance 

 with Court Orders ................................................................................35 

C. The Government Has Authority to Complete Collection Activities and the 

 Garnishment Order Was Proper .................................................................37 

II. The District Court Did Not Violate Koresko's Due Process Rights In Entering 

 The Contempt Order. .........................................................................................40 

A. Koresko was Provided Notice and Opportunity to Respond .......................40 

B. The District Court Did Not Deny Koresko Any Right to Counsel .............45 

III. The District Court Had Subject-Matter Jurisdiction To Enter The Contempt 

 Order and Over All Prior And Subsequent Proceedings ...................................48 

A. Koresko's Arguments Are Barred under the Law of the Case Doctrine ....48 

B. The Contempt Order is Not Based on ERISA ............................................51 

ii 
 

TABLE OF CONTENTS-(continued) 

CONCLUSION ........................................................................................................ 51 

CERTIFICATE OF COMPLIANCE 

CERTIFICATION PURSUANT TO LAR 31.1 

CERTIFICATE OF SERVICE 

iii 
TABLE OF AUTHORITIES 

Federal Cases: 

Adegbuji v. Fifteen Immigration & Customs Enf't Agents, 

169 F. App'x 733 (3d Cir. 2006) ...........................................................................27 

AL Tech Specialty Steel Corp. v. Allegheny Int'l Credit Corp., 

104 F.3d 601 (3d Cir. 1997) .................................................................................49 

Allen v. McCurry, 

449 U.S. 90 (1980) ................................................................................................49 

Am. Rivers v. U.S. Army Corps of Eng'rs, 

274 F. Supp. 2d 62 (D.C.Cir 2003) .......................................................................21 

Am. Sur. Co. v. Baldwin, 

287 U.S. 156 (1932) ..............................................................................................49 

Atl. Coast Demolition & Recycling, Inc. v. Bd. of Chosen Freeholders of Atl. City, 

112 F.3d 652 (3d Cir. 1997), amended, 

135 F.3d 891 (3d Cir. 1998) .......................................................................... 48, 49 

B & G Const. Co., Inc. v. Director, Office of Workers' Comp. Programs, 

662 F.3d 233 (3d Cir. 2011) ........................................................................ 40 n.11 

Bell v. Burson, 

402 U.S. 535 (1971) ..............................................................................................40 

Berne Corp. v. Gov't of the Virgin Islands, 

570 F.3d 130 (3d Cir. 2009) .................................................................................30 

Bessette v. W.B. Conkey Co., 

194 U.S. 324 (1904) ....................................................................................... 33 n.7 

iv 
Federal Cases-continued: 

Brown v. United States, 

508 F.2d 618 (3d Cir. 1974) ................................................................................. 48 

Camerons Hardware Inc. v. Indep. Blue Cross, 

363 F. App'x 197 (3d Cir. 2010) .............................................................. 25, 26, 45 

Chadwick v. Janecka, 

312 F.3d 597 (3d Cir. 2002) .......................................................................... 31, 32 

Chesemore v. Fenkell, 

829 F.3d 803 (7th Cir. 2016) ................................................................................ 34 

Clark v. Wilbur, 

913 F. Supp. 463 (S.D.W. Va. 1996), aff'd sub nom., 

 Clark v. Allen, 

139 F.3d 888 (4th Cir. 1998) ................................................................................ 38 

Doyle v. London Guar. & Accident Co., Ltd., 

204 U.S. 599 (1907) .............................................................................................. 33 

Elkin v. Fauver, 

969 F.2d 48 (3d Cir. 1992) ................................................................................... 30 

FTC v. Lane Labs-USA, Inc., 

624 F.3d 575 (3d Cir. 2010) .............................................................. 18, 22, 25, 35 

Gen. Motors Corp. v. New A.C. Chevrolet, Inc., 

263 F.3d 296 (3d Cir. 2001) ................................................................................. 49 

Goldberg v. Kelly, 

397 U.S. 254 (1970) .............................................................................................. 45 

v 
Federal Cases-continued: 

Gompers v. Buck's Stove & Range Co., 

221 U.S. 418 (1911) .............................................................................................. 31 

Greene v. McElroy, 

360 U.S. 474 (1959) .............................................................................................. 45 

Harley-Davidson, Inc. v. Morris, 

19 F.3d 142 (3d Cir. 1994) ................................................................................... 22 

Harris v. City of Phila., 

47 F.3d 1311 (3d Cir. 1995) ......................................................................... passim 

Hicks v. Feiock, 

485 U.S. 624 (1988) ...................................................................................... passim 

In re Application of Adan, 

437 F.3d 381 (3d Cir. 2006) ................................................................................. 27 

In re Gault, 

387 U.S. 1 (1967) ..................................................................................... 44, 45, 46 

In re Nevitt, 

117 F. 448 (8th Cir. 1902) ............................................................................. 34, 35 

In re Rubin, 

378 F.2d 104 (3d Cir. 1967) .......................................................................... 23 n.4 

Inmates of Allegheny Cnty. Jail v. Wecht, 

874 F.2d 147 (3d Cir. 1989), vacated on other grounds, 

493 U.S. 948 (1989) .............................................................................................. 25 

Int'l Union, United Mine Workers of Am. v. Bagwell, 

512 U.S. 821 (1994) ................................................................................. 18, 31, 40 

vi 
Federal Cases-continued: 

Interdynamics, Inc. v. Firma Wolf, 

653 F.2d 93 (3d Cir. 1981) ................................................................................... 40 

Lassiter v. Dep't of Soc. Servs. of Durham Cnty., 

452 U.S. 18 (1981) ................................................................................................ 46 

Latrobe Steel Co. v. United Steelworkers of Am., 

545 F.2d 1336 (3d Cir. 1976) .................................................................. 18, 30, 32 

Lundy v. Yost, 

405 F. App'x 690 (3d Cir. 2011) ........................................................................... 40 

Maggio v. Zeitz, 

333 U.S. 56 (1948) ....................................................................... 20, 23 n.4, 27, 29 

Marks Law Offices, LLC v. Mireskandari, 

2017 WL 3575237 (3d Cir. Aug. 18, 2017) .................................................. 26, 42 

Marshak v. Treadwell, 

595 F.3d 478 (3d Cir. 2009) .................................................................... 19, 20, 43 

McCrone v. United States, 

307 U.S. 61 (1939) ................................................................................... 34 n.9, 35 

McDonald's Corp. v. Victory Invs., 

727 F.2d 82 (3d Cir. 1984) ........................................................ 29, 30, 37 n.10, 51 

Mills v. Phila. Gas Works, 

264 F. App'x 239 (3d Cir. 2008) ........................................................................... 27 

vii 
Federal Cases-continued: 

NLRB v. Trans Ocean Exp. Packing, Inc., 

473 F.2d 612 (9th Cir. 1973) ................................................................................26 

Oriel v. Russell, 

278 U.S. 358 (1929) ..............................................................................................36 

Parham v. Johnson, 

126 F.3d 454 (3d Cir. 1997) .................................................................................45 

Perez v. Koresko, 

86 F. Supp. 3d 293 (E.D. Pa. 2015) .............................................................. passim 

Powell v. Alabama, 

287 U.S. 45 (1932) ................................................................................................47 

Robin Woods Inc. v. Woods, 

28 F.3d 396 (3d Cir. 1984) ............................................................................ 22, 23 

Roe v. Operation Rescue, 

919 F.2d 857 (3d Cir. 1990) .................................................................... 19, 30, 31 

Roe v. Operation Rescue, 

920 F.2d 213 (3d Cir. 1990) .................................................................................41 

Roe v. Operation Rescue, 

54 F.3d 133 (3d Cir. 1995) ...................................................................................17 

S.E.C. v. Gold Standard Mining Corp., 

2017 WL 760773 (C.D. Cal. Jan. 19, 2017) .........................................................38 

Sec'y U.S. Dep't of Labor v. Koresko, 

646 F. App'x 230 (3d Cir. 2016) ................................................................... passim 

viii 
Federal Cases-continued: 

Shillitani v. United States, 

384 U.S. 364 (1966) ....................................................................................... 18, 35 

Solis v. Koresko, 

884 F. Supp. 2d 261 (E.D. Pa. 2012) ...................................................................... 2 

Solis v. Koresko, 

2013 WL 5272815 (E.D. Pa. Sept. 17, 2013) ............................................... passim 

Turner v. Rogers, 

564 U.S. 431 (2011) ................................................................................. 40, 45, 46 

United States v. Abbey, 

2007 WL 216294 (E.D. Mich. Jan. 25. 2007) ...................................................... 44 

United States v. Asay, 

614 F.2d 655 (9th Cir. 1980) ................................................................................ 51 

United States v. Clayton, 

613 F.3d 592 (5th Cir. 2010) ................................................................................ 37 

United States v. Coles, 

558 F. App'x 173 (3d Cir. 2014) ........................................................................... 20 

United States v. Harris, 

582 F.3d 512 (3d Cir. 2009) ...................................................................... 8, 29, 31 

United States v. Kaplan, 

526 F. App'x 208 (3d Cir. 2013) .................................................................... 20, 21 

United States v. Palmer, 

609 F. Supp. 544 (E.D. Ten. 1985) ....................................................................... 38 

ix 
Federal Cases-continued: 

United States v. Rylander, 

460 U.S. 752 (1983) ..................................................................... 24, 27, 34 n.9, 35 

United States v. Spectro Foods Corp., 

544 F.2d 1175 (3d Cir. 1976) ........................................................................ 34 n.9 

United States v. Thornton, 

672 F.2d 101 (D.C. Cir. 1982) ..............................................................................38 

Vitek v. Jones, 

445 U.S. 480 (1980) ..............................................................................................46 

Federal Statutes: 

Title 28, Judiciary and Judicial Procedure: 

28 U.S.C. § 1291 ........................................................................................................1 

28 U.S.C. § 2413 ......................................................................................................38 

28 U.S.C. § 3205 ......................................................................................................38 

28 U.S.C. § 3205(a) .................................................................................................38 

28 U.S.C. § 3205(c)(4) .............................................................................................14 

Employee Retirement Income Security Act of 1974 (Title I), 

29 U.S.C. § 1001 et seq.: 

Section 409(a), 29 U.S.C. § 1109(a)........................................................ 37, 39, 49 

Section 410(a), 29 U.S.C. § 1110(a) .....................................................................12 

x 
 

 

 

 

 

 

Federal Statutes-continued: 

Section 502(a)(2), 29 U.S.C. § 1132(a)(2) .......................................... 1, 33, 39, 50 

Section 502(a)(5), 29 U.S.C. § 1132(a)(5) .......................................... 1, 33, 39, 50 

Section 502(e), 29 U.S.C. § 1132(e) ....................................................................... 1 

Section 502(e)(1), 29 U.S.C. § 1132(e)(1) ........................................................... 49 

Miscellaneous: 

Fed. R. App. Proc. 10(a) .......................................................................................... 27 

Fed. R. Civ. P. 4 .............................................................................................. 43 n.12 

 4.1 ........................................................................................... 43 n.12 

 5 .............................................................................................. 43 n.12 

 5(b)(1) ............................................................................................. 41 

5(b)(2)(D) ....................................................................................... 20 

Fed. R. Evid. 803(15) ............................................................................................... 44 

3d Cir. L.A.R. 24.3 (2011) ....................................................................................... 28 

30.3 (2011) ....................................................................................... 27 

E.D. Pa. Local Rule 5.1.2(4)(c) ............................................................................... 20 

xi 
STATEMENT OF JURISDICTION 

The Secretary of Labor brought this action under sections 502(a)(2) and 

(a)(5) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 

U.S.C. § 1132(a)(2), (a)(5). The district court had jurisdiction under 29 U.S.C. § 

1132(e). The district court orders appealed are the August 31, 2016 order denying 

the motion to reconsider the order of contempt issued April 26, 2016, and the 

December 5, 2016 order denying the motion to quash the writ of garnishment. The 

appeals were timely filed and consolidated. 

This court has jurisdiction of the appeal under 28 U.S.C. § 1291. 

STATEMENT OF RELATED CASES 

The Secretary is unaware of related cases pending in this Court. 

STATEMENT OF THE ISSUES 

1. Whether the district court properly exercised its discretion and acted in

accordance with law when it entered the orders of contempt and garnishment. 

2. Whether Appellant's due process rights were violated by the entering of the

order of contempt. 

3. Whether the district court had subject-matter jurisdiction to issue an order of

contempt. 

STATEMENT OF THE CASE 

After many years of investigation and litigation culminating in a bench trial, 
the district court found Appellant John J. Koresko ("Koresko") breached his 

fiduciary duties and misappropriated millions of dollars in plan assets from 

hundreds of employee benefit plans participating in a multiple-employer death 

benefit arrangement. Perez v. Koresko, 86 F. Supp. 3d 293 (E.D. Pa. 2015). 

On March 6, 2009, the Department of Labor brought suit against Koresko 

and others to redress violations of ERISA committed while administering the 

Regional Employers Assurance Leagues Voluntary Employees' Beneficiary 

Association ("REAL VEBA"), and the Single Employer Welfare Benefit Plan 

Trusts ("SEWBPT") (collectively, the "trusts" or "plans"). The district court found 

on partial summary judgment that Koresko committed fiduciary breaches and 

engaged in prohibited self-dealing in violation of ERISA by his mishandling and 

misappropriating plan assets. Solis v. Koresko, 884 F. Supp. 2d 261 (E.D. Pa. 

2012). 

In its final decision on the merits, the district court noted the "voluminous 

evidence" presented by the Secretary of numerous ERISA violations, including the 

diversion of tens of millions of dollars of plan assets, particularly into accounts 

which only Koresko controlled, and "the use of death benefit proceeds to purchase 

property in the Caribbean island of Nevis." Id. at 300 (emphasis added). On this 

basis, the court issued its final order "remov[ing] [Koresko] from any position of 

fiduciary authority and permanently bar[ring him] from ever serving as fiduciar[y] 

2 
or service provider[] to ERISA-covered plans," and holding Koresko and related 

entities liable for over $18,000,000 "in restitution for losses and disgorgement of 

profits." Id. 

On April 5, 2016, this Court affirmed the district court's rulings imposing 

liability on Koresko for breach of fiduciary duties and ordering Koresko to restore 

over $18,000,000 in misappropriated plan assets. Sec'y U.S. Dep't of Labor v. 

Koresko, 646 F. App'x 230 (3d Cir. 2016). 

1. The Contempt Order 

In June 2013, prior to the district court's final judgment on the merits, the 

Secretary sought a temporary restraining order, preliminary injunction, and an 

order removing Koresko from his fiduciary position and appointing an independent 

fiduciary to administer the plans and hold plan assets. SA-2-5 (Appl. for TRO and 

Prelim. Inj.); Perez v. Koresko, 86 F. Supp. 3d at 304. The Secretary supported the 

motion with evidence that Koresko used trust assets to purchase real property in 

the Caribbean island of Nevis, and moved $1.68 million from bank accounts in the 

United States containing trust assets to an account in Nevis. SA-3; Perez v. 

Koresko, 86 F. Supp. 3d at 304. With consent of the parties, the court froze money 

in certain Koresko-controlled bank accounts pending a hearing and enjoined 

Koresko from taking actions affecting the accounts except as ordered by the court. 

SA-6-8 (June 28, 2013 Interim Order); Perez v. Koresko, 86 F. Supp. 3d at 305. 

3 
 

At a hearing on July 8, 2013, Koresko admitted he used trust assets to 

purchase six condominium units in Nevis and transferred $1.68 million to Nevisian 

accounts in order purchase additional units. SA-12-13, -15 (Tr. of TRO Hr'g and 

Status Conference); SA-205 (Op. on Mot. for Recons.). To avoid an evidentiary 

hearing on the Secretary's application for a temporary restraining order and 

preliminary injunction, Koresko filed a number of motions for continuance, 

suggestions of bankruptcy, and even a series of appeals in this Court that were 

dismissed.1 Perez v. Koresko, 86 F. Supp. 3d at 304-07; Solis v. Koresko, No. 09-

988, 2013 WL 5272815, at *2-6 (E.D. Pa. Sept. 17, 2013) (same). During this 

period of delay lasting over three months, Koresko made numerous attempts to 

remove and hide funds from the trusts. Perez v. Koresko, 86 F. Supp. 3d at 306; 

Solis v. Koresko, 2013 WL 5272815, at *6. At a later hearing on the Secretary's 

motion on September 16, 2013, Koresko again testified that he used trust assets to 

purchase real property in Nevis. SA-30, 32-33 (Tr. of Mot. Hr'g); SA-205 (Op. on 

Mot. for Recons.). 

Accordingly, on September 16, 2013, the district court removed Koresko 

from positions of authority over the plans and the two trusts that held plan assets, 

and appointed an independent fiduciary to administer the plans and trusts. SA-17-

18 (Order); Solis v. Koresko, 2013 WL 5272815, at *7; Perez v. Koresko, 86 F. 

1 See Docket Nos. 13-3102, 13-3103, 13-3104, 13-3130, 13-3358, 13-3359 (3d 

Cir.). 

4 
Supp. 3d at 307. The court's order also required that Koresko turn over to the 

independent fiduciary all assets he had removed from the trusts, as well as property 

purchased with trust assets. SA-20-21; Solis v. Koresko, 2013 WL 5272815, at *7; 

Perez v. Koresko, 86 F. Supp. 3d at 307. The September 16, 2013 order included 

the trust assets that Koresko transferred to an account at the Scotia Bank in Nevis, 

and ordered Koresko to assign "all rights in the Nelson Springs condominiums" in 

Nevis to the independent fiduciary. SA-20; SA-205-206 (Op. on Mot. for 

Recons.). 

On September 27, 2013, the Department filed its first motion for contempt 

for Koresko's failure to comply with the September 16, 2013 order because he 

failed to provide information and documents about these assets to the independent 

fiduciary as required. Pl.'s Mot. for Adjudication of Civil Contempt, Perez v. 

Koresko, No. 09-cv-0988 (E.D. Pa. Sept. 27, 2013), ECF No. 518. On September 

30, 2013, the district court issued an order to show cause why Koresko should not 

be held in civil contempt and subject to sanctions for failure to comply. SA-34. 

While the contempt motion was pending, Koresko gave deposition testimony that 

"[t]he original intention was that [the purchase of the condominiums] was going to 

be a trust investment." SA-109 (Tr. of Dec. 18, 2013 Dep.). He also testified that 

he initially transferred $1.68 million in trust assets to the Scotia Bank in Nevis to 

facilitate construction on condominium properties. SA-105-112 (Tr. of Dec. 18, 

5 
2013 Dep.); SA-114 (Tr. of Jan. 7, 2014 Dep.). Critically, Koresko admitted he 

traveled to Nevis and transferred the plan funds held in the Scotia Bank to the 

Royal Bank of Trinidad and Tobago after the district court had ordered him to 

transfer the funds in Nevis to the independent fiduciary. SA-115-121 (Tr. of Jan. 

7, 2014 Dep.); Pl.'s Suppl. Mot. and Exs. in Supp. of Mot. for Adjudication of 

Civil Contempt and Req. for Show Cause Hr'g at 6-8, Perez v. Koresko, No. 09-cv0988 (E.D. Pa. March 10, 2014), ECF No. 726. 

At a second contempt hearing on April 1, 2014, the parties agreed on 

language to be included in a court order directing Koresko to sign letters 

authorizing the banks in Nevis to give information to the independent fiduciary as 

an alternative to the district court holding Koresko in contempt at that stage. SA41-42 (Order); SA-207 (Op. on Mot. for Recons.). In an order on June 27, 2014, 

the district court directed Koresko to wire transfer the funds in Nevis to an account 

used for the administration of the trusts by July 14, 2014. SA-44. Koresko filed a 

declaration with the court on July 11, 2014, stating the Royal Bank of Trinidad and 

Tobago would not wire the Nevis funds into the United States as requested. SA46. Accordingly, the Court granted leave for Koresko to travel to Nevis to arrange 

the transfer of funds to the independent fiduciary. SA-207 (Op. on Mot. for 

Recons.); Perez v. Koresko, 86 F. Supp. 3d at 309. Koresko claimed to have been 

in a car accident and unable to complete the transaction by the ordered time. SA6 
50-53 (Tr. of Aug. 12, 2014 Status Conference); SA-207 (Op. on Mot. for 

Recons.); Perez v. Koresko, 86 F. Supp. 3d at 309. 

On September 10, 2014, the district court denied the Secretary's motion for 

contempt "except with respect to Mr. Koresko's failure to transfer to the United 

States the accounts held in the Nevis branch of the Royal Bank of Trinidad and 

Tobago." SA-54. The district court then ordered Koresko to transfer the funds in 

the Nevis account to the United States by October 3, 2014, or face contempt. SA54. This deadline was extended due to Koresko's representations about his poor 

health, and the court ordered that if Koresko could not effectuate the transfer of 

funds by that date, he must "sign a power-of-attorney, providing the Independent 

Fiduciary (the 'IF') control of the accounts" by October 31, 2014. SA-56-57 (Oct. 

15, 2014 Order). 

Koresko drafted his own power of attorney, but it was deemed deficient 

under Nevisian law by Nevisian counsel for the independent fiduciary. SA-63-64 

(Tr. of Dec. 4, 2014 Telephone Conference); SA-208 (Op. on Mot. for Recons.). 

On December 4, 2014, Koresko was ordered to sign a power of attorney previously 

approved by Nevisian counsel for the independent fiduciary no later than 

December 8, 2014, or face contempt. SA-58. The district court delayed holding 

Koresko in contempt until December 15, 2014, when the court gave him three 

more days to sign the document and ordered him to surrender to the U.S. Marshals 

7 
if he failed to do so. SA-59-60. On December 15, 2014, Koresko's attorney 

informed the district court Koresko had executed the revised power of attorney, 

and on December 30, 2014, the independent fiduciary confirmed receipt. SA-61 

(Letter from L. McMichael); SA-65 (Letter from The Wagner Law Group). While 

a completed power of attorney was submitted as ordered, it is limited to a specific 

account and Koresko has not provided adequate information on the exact location 

of the plan funds. Therefore, the independent fiduciary cannot reach other 

accounts and real property. SA-173-175 (Tr. of June 16, 2016 Telephone Status 

Conference). 

In its February 6, 2015 judgment, the district court found the funds Koresko 

transferred first to Scotia Bank and then to the Royal Bank of Trinidad and Tobago 

were the plans' assets and that Koresko was the sole signatory on the accounts. 

Perez v. Koresko, 86 F.Supp.3d at 351-52; SA-208 (Op. on Mot. for Recons.). The 

district court also found that Koresko traveled to Nevis and transferred the assets 

from the Scotia Bank to the Royal Bank of Trinidad and Tobago after the court had 

taken away Koresko’s authority over the plans’ assets. Perez v. Koresko, 86 

F.Supp.3d at 351-52; SA-208 (Op. on Mot. for Recons.). In the final judgment 

entered on March 13, 2015, the court reiterated that Koresko must disgorge and 

surrender all trust assets and other misappropriated funds. Perez v. Koresko, 86 F. 

Supp. 3d at 393-96; SA-69 (Mar. 13, 2015 Mem. Op); SA-208 (Op. on Mot. for 

8 
Recons.). The total dollar amount of the final judgment for $38,417,109.63 was 

separate and apart from the funds that were moved to Nevis and the Royal Bank of 

Trinidad and Tobago and subject of the contempt order now on appeal. SA-67 n.2 

(stating the court reduced the total monetary liability by the "plan assets that Mr. 

Koresko had transferred to the Caribbean island of Nevis"). Accordingly, Koresko 

is liable for the $38,417,109.63 judgment, and he must comply with the court's 

orders to return to the trust the additional plan assets he illegally transferred. 

Because of the limited scope of the power of attorney and Koresko's failure 

to provide information regarding the assets, the independent fiduciary still could 

not reach the funds deposited in the Nevisian accounts and the property purchased 

with those funds; therefore, the Secretary filed a second motion for contempt on 

February 9, 2016. Secretary's Second Mot. for Contempt, Perez v. Koresko, No. 

09-cv-0988 (E.D. Pa. Feb. 9, 2016), ECF No. 1283. At a status conference on 

March 8, 2016, Koresko was represented by counsel. SA-122 (Order) (directing 

Koresko "through his counsel"). On March 31, 2016, the district court ordered 

Koresko to file a response to the contempt motion no later than April 14, 2016, and 

scheduled a hearing on the contempt motion on April 26, 2016. SA-124. Koresko 

and counsel received notice of the hearing and had an opportunity to be heard on 

the Secretary's second motion for contempt, but neither Koresko nor counsel 

appeared at the scheduled contempt hearing or filed a written opposition prior to 

9 
 

the hearing. On April 26, 2016, the district court held Koresko in contempt. A48-

49 (Apr. 26, 2016 Order) (hereinafter "Contempt Order"). The court found that 

Koresko violated its September 16, 2013 order and subsequent orders compelling 

him to turn over all assets of the plans, expressly including $1.68 million in trust 

assets that he had transferred to accounts in Nevis (first to the Scotia Bank and then 

to the Royal Bank of Trinidad and Tobago). Id. The court also ordered Koresko to 

assign all rights in the Nelson Springs Resort and Cliffdwellers condominiums in 

Nevis to the independent fiduciary, and to surrender to the U.S. Marshals within 

five days. Id. 

Based on its findings, the district court determined that the Secretary had 

produced clear and convincing evidence that: (i) Koresko had knowledge of the 

September 16, 2013 order and subsequent reaffirming orders directing him to turn 

over the trust funds originally held in a bank account in Nevis to the independent 

fiduciary and to assign all of his rights to the real property in Nevis to the 

independent fiduciary; (ii) Koresko disobeyed the district court's orders directing 

him to turn over the assets to the independent fiduciary; and (iii) Koresko has a 

present ability to comply with the orders. SA-148-152 (Tr. of Apr. 26, 2016 

Conference); SA-210-211 (Op. on Mot. for Recons.). 2 The Contempt Order 

2

 The district court reaffirmed the September 16, 2013 order on multiple 

occasions. SA-37-38 (Dec. 19, 2013 Order); SA-39-45 (Apr. 1, 2014 Order); SA10 
 

specifically directed Koresko to: (i) cause the transfer of $1.68 million to the courtappointed independent fiduciary; (ii) cause the transfer of title for the real property 

located at Nelson Springs Resort in Nevis, i.e., Condo Unit 3A, Condo Unit 5B, 

Condo Unit 5C, Condo Unit 6A, and Condo Unit 6B, to the independent fiduciary; 

and (iii) transfer the title of any lot of land held in the name of John Koresko at 

Cliffdwellers in Nevis to the independent fiduciary. A48-49; SA-154-156 (Tr. of 

Apr. 26, 2016 Conference). 

On May 2, 2016, Koresko provided a thirty-one page document that detailed 

his familial difficulties, objections to ERISA, conviction that the district court 

lacked jurisdiction over this matter, and allegations of constitutional violations. 

Letter from Koresko re: Resp. to Mot. for Contempt, Perez v. Koresko, No. 09-cv0988 (E.D. Pa. May 3, 2016), ECF No. 1310. Because Koresko failed to surrender 

himself as ordered, the court issued a bench warrant for Koresko's arrest, which 

resulted in his arrest and incarceration. A50 (May 5, 2016 Order); SA-126 (Arrest 

Warrant). Under the Contempt Order, Koresko is to remain incarcerated 

indefinitely until such time as he transfers identified plan assets and the title to 

specific real properties in Nevis to the independent fiduciary. A48-49. At the May 

18, 2016 status conference, Koresko's attorney represented Koresko in a motion to 

free him from his incarceration and to challenge the Contempt Order, which the 

44-45 (June 27, 2014 Order); SA-54-55 (Sept. 10, 2014 Order); SA-56-57 (Oct. 15, 

2014 Order); SA-58 (Dec. 4, 2014 Order); SA-59-60 (Dec. 15, 2014 Order). 

11 
court denied on June 1, 2016. SA-131-137 (Def.'s Mem. of Law in Supp. of Mot. 

for Relief); SA-181(Tr. of Status Conference); SA-160 (June 1, 2016 Order). 

Prior to March 31, 2016, the district court allowed Koresko's representation 

on the issue of contempt to be paid for by the trusts. However, because the district 

court found Koresko breached his fiduciary duties to the plans, the court explicitly 

held that "any plan indemnification provisions that purport to allow the plan itself, 

through plan assets, to indemnify" Koresko were void under ERISA section 

410(a), 29 U.S.C. § 1110(a). SA-80 (May 13, 2015 Mem. Op.). Therefore, 

indemnification of the cost of representation specifically relating to contempt was 

also impermissible. SA-125 (March 31, 2016 Order). Koresko's attorney 

withdrew his appearance on May 26, 2016. SA-158. 

The court held status conferences on June 1, June 16, and July 5, 2016, 

regarding Koresko's willingness to comply with the Contempt Order. SA-163-164 

(Tr. of June 1, 2016 Hr'g); SA-169 (Tr. of June 16, 2016 Telephone Status 

Conference); SA-212 (Op. on Mot. for Recons.). At the district court's suggestion, 

the Secretary deposed Koresko for the purpose of gathering relevant information 

and determining whether Koresko would cooperate in resolving the contempt 

issue. SA-166-167 (Tr. of June 1, 2016 Hr'g). After the deposition, the Secretary's 

counsel reported at a status conference on June 16, 2016, that the deposition 

yielded little useful information other than the inescapable conclusion that Koresko 

12 
refused to purge his contempt. SA-176 (Tr. of Telephone Status Conference). 

Specifically, Koresko refused to disclose information regarding the status of the 

real properties in Nevis and refused to identify the whereabouts of trust assets. 

SA-171-173 (Tr. of Telephone Status Conference). Koresko stated on multiple 

occasions that he would refuse to sign any instrument transferring the real 

properties in Nevis to the independent fiduciary. SA-196-197, -201 (Tr. of June 8, 

2016 Dep.). Koresko also refused to provide information regarding the location of 

relevant financial records. SA-198-199 (Tr. of June 8, 2016 Dep.). Koresko also 

admitted that, despite his claims to be unable to travel, he travelled to Nevis to 

transfer the funds into another bank account in his name rather than comply with 

the court's orders. Perez v. Koresko, 86 F. Supp. 3d at 351-52; SA-208 (Op. on 

Mot. for Recons.); SA-115-121 (Tr. of Jan. 7, 2014 Dep.); Pl.'s Suppl. Mot. and 

Exs. in Supp. of Mot. for Adjudication of Civil Contempt and Req. for Show 

Cause Hr'g at 6-8, Perez v. Koresko, No. 09-cv-0988 (E.D. Pa. March 10, 2014), 

ECF No. 726. 

On August 31, 2016, the district court considered numerous filings by 

Koresko to be a motion to reconsider the Contempt Order. SA-203 n.1. Finding 

Koresko had not offered a basis for reconsideration, the district court denied the 

motion for reconsideration of the order of contempt. SA-218. 

13 
2. The Garnishment Order 

On April 21, 2016, the Secretary's representative recorded the final judgment 

in this case for restitution of losses and disgorgement of profits in the amount of 

$38,417,109.63 with the Oklahoma County Clerk in the State of Oklahoma, based 

on information that Koresko held funds in escrow in the County of Oklahoma that 

could be used towards satisfying Koresko's liability. SA-222 (Abstract of J.). The 

Secretary had reason to believe that Koresko deposited funds from his personal 

accounts with Jetstream Escrow & Title Services, Inc. ("Jetstream Escrow") 

located in Oklahoma City, Oklahoma, which Koresko confirmed during his June 8, 

2016 deposition. SA-194-195 (Tr. of June 8, 2016 Dep.). On September 23, 2016, 

the district court issued a writ of continuing garnishment (hereinafter "Garnishment 

Order") for these funds, SA-223-225, which the Secretary's counsel served upon 

Jetstream Escrow and Koresko, SA-226-227 (Correspondence). Under the district 

court's order appointing an independent fiduciary, Wilmington Trust is entitled to 

receive and hold for the benefit of the plans the funds currently held in the 

possession, custody, or control of Jetstream Escrow. SA-68 (Mar. 13, 2015 J. and 

Order); SA-91(Aug. 4, 2015 Order). 

On October 17, 2016, Jetstream Escrow filed an answer to the Garnishment 

Order, as required by 28 U.S.C. § 3205(c)(4), which identified $50,000 held in an 

escrow account in which Koresko has a substantial, non-exempt interest belonging 

14 
 

and due to Koresko that the garnishee had in its possession or under its control at 

the time of the service of the Garnishment Order. SA-219-221 (Answer of the 

Garnishee). On November 10, 2016, Koresko filed a motion to quash. Mot. to 

Quash Writ of Attach., Perez v. Koresko, No. 09-cv-0988 (E.D. Pa. Nov. 10, 

2016), ECF No. 1415. 

On December 5, 2016, the district court issued an order denying Koresko’s 

motion. A45.3 

SUMMARY OF THE ARGUMENT 

This Court should affirm the Contempt Order and the Garnishment Order 

because Koresko failed to demonstrate that the district court abused its discretion, 

made a clearly erroneous factual finding, incorrectly decided any question of law, 

or lacked jurisdiction. 

1. The district court did not abuse its discretion in entering the Contempt 

Order or the Garnishment Order. 

a. Courts possess the inherent authority to hold persons in contempt and 

the district court properly exercised its authority against Koresko when it found 

that the Secretary had proved by clear and convincing evidence that valid orders of 

the court existed, Koresko had knowledge of the orders, and Koresko disobeyed 

3

 On December 7, 2016, the district court amended the Garnishment Order by 

vacating a portion of the order unrelated to Koresko's motion to quash and this 

appeal. SA-228. 

15 
the orders despite several opportunities to comply. 

In response, Koresko cannot legitimately defend his failure to comply with 

the district court's orders based on his frivolous argument that the underlying 

merits of the orders are somehow defective. Koresko was made aware of the 

orders that are the basis for the contempt, through his personal attendance at 

hearings and electronic service. Koresko's failure to perform as the court 

specifically directed leaves "no question" that Koresko failed to comply with the 

orders. Koresko also has not established his defense of impossibility by clearly 

demonstrating an inability to comply. Nor can Koresko compare this Contempt 

Order to criminal contempt or debt collection. The district court properly and 

clearly entered an order of civil contempt, the purpose of which is remedial and 

coercive, to force compliance with court orders and obtain the rightful return of 

assets to the plans. 

b. Additionally, Koresko's challenge to the Garnishment Order must fail. 

This Court held that Koresko committed fiduciary breaches in overseeing the 

plans, and on this basis, he is personally liable for restoring the resulting losses to 

the plans out of his assets. Therefore, the Secretary has authority under ERISA to 

pursue monetary relief against Koresko for his breaches of fiduciary duties through 

a properly executed garnishment. 

2. Koresko alleges broad due process violations, but he received 

16 
adequate notice of the contempt proceedings, was given opportunities to respond in 

writing and appear at a hearing, and was represented by counsel in challenging the 

Contempt Order. The requirements of due process for a civil contempt proceeding 

were satisfied. 

3. Koresko also raises a broad jurisdictional argument. The district court 

clearly had jurisdiction to enter the Contempt Order and over all prior and 

subsequent proceedings. The entirety of Koresko's arguments to the contrary 

merely repeats arguments previously briefed, argued, and rejected by this Court in 

Secretary United States Department of Labor v. Koresko, 646 F. App'x 230 (3d 

Cir. 2016). The orders at issue in this appeal concern the ability of the district 

court to enforce its own orders and judgment; thus, Koresko's argument that they 

are jurisdictionally invalid as outside the scope of ERISA is entirely misplaced. 

ARGUMENT 

I. THE DISTRICT COURT ACTED WITHIN ITS DISCRETION AND 

IN ACCORDANCE WITH THE LAW WHEN IT ENTERED THE 

CONTEMPT ORDER AND THE GARNISHMENT ORDER 

A. The District Court Met the Standards for Holding a Person in 

Contempt 

This Court has held that an order for contempt is reviewed for an abuse of 

discretion and "will only be disturbed if there is an error of law or a clearly 

erroneous finding of fact." Harris v. City of Phila., 47 F.3d 1311, 1321 (3d Cir. 

1995) (citation omitted); see also Roe v. Operation Rescue, 54 F.3d 133, 137 (3d 

17 
Cir. 1995). 

The district court properly exercised its inherent authority to hold persons in 

contempt. Courts may deploy "a variety of weapons" to coerce compliance with 

court orders, including "an indeterminate period of confinement which may be 

brought to an end only by the contemnor's ultimate adherence to the court order." 

Latrobe Steel Co. v. United Steelworkers of Am., 545 F.2d 1336, 1344 (3d Cir. 

1976); see also Shillitani v. United States, 384 U.S. 364, 370 (1966); Int'l Union, 

United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 828 (1994); United States 

v. Harris, 582 F.3d 512, 514 (3d Cir. 2009); Harris, 47 F.3d at 1328. Specifically, 

"civil contempt may be employed to coerce the defendant into compliance with the 

court's order and to compensate for losses sustained by the disobedience." 

McDonald's Corp. v. Victory Invs., 727 F.2d 82, 87 (3d Cir. 1984) (citations 

omitted). 

1. The District Court Complied With All Requirements for a 

Contempt Order 

In denying Koresko's motion for reconsideration of the Contempt Order, the 

district court held that the Secretary proved "by clear and convincing evidence" 

that valid orders of the court existed, that Koresko had knowledge of the orders, 

and that Koresko disobeyed the orders. SA-152 (Tr. of Apr. 26, 2016 Conference); 

SA-218 (Op. on Mot. for Recons.). These three criteria are all that is required to 

prove contempt. See FTC v. Lane Labs-USA, Inc., 624 F.3d 575, 582 (3d Cir. 

18 
2010); Marshak v. Treadwell, 595 F.3d 478, 485 (3d Cir. 2009) (same). 

a. Koresko Failed to Comply with Valid Court Orders and 

He Can Not Collaterally Attack the Merits of Those 

Orders 

On February 9, 2016, the Secretary filed a second motion for contempt. 

Secretary's Second Mot. for Contempt, Perez v. Koresko, No. 09-cv-0988 (E.D. Pa. 

Feb. 9, 2016), ECF No. 1283. Upon consideration of this motion, the district court 

held Koresko in contempt, finding he violated the district court's September 13, 

2013 injunctive order, SA-17, and subsequent related orders affirming the directive 

that Koresko to turn over to the appointed independent fiduciary all assets he had 

removed from the trust, all property purchased with trust assets, expressly 

including "all rights in the Nelson Springs condominiums" in Nevis, and the 

proceeds of loans taken against insurance policies held by the trusts for the benefit 

of the plans and their participants and beneficiaries. SA-20-21 (Sept. 16, 2013 

Order); Solis v. Koresko, 2013 WL 5272815, at *7; Perez v. Koresko, 86 F. Supp. 

3d at 307. The district court found as a matter of fact that these orders constituted 

valid orders of the court and a basis for a finding of contempt. SA-148-149 (Tr. of 

Apr. 26, 2016 Conference). 

Koresko cannot legitimately defend his failure to comply with the district 

court's orders on the grounds that he believes that the substantive merits of the 

orders are somehow defective. See Roe v. Operation Rescue, 919 F.2d 857, 871 

19 
(3d Cir. 1990) ("[T]he validity of the order may not be collaterally challenged in a 

contempt proceeding for violating the order.") (citation omitted); see also Maggio 

v. Zeitz, 333 U.S. 56, 69 (1948) ("It would be a disservice to the law if we were to 

depart from the long-standing rule that a contempt proceeding does not open to 

reconsideration the legal or factual basis of the order alleged to have been 

disobeyed and thus become a retrial of the original controversy."). This Court has 

stated that "a party who is alleged to be in contempt of a court order may not 

challenge the substantive merits of that order within contempt proceedings." 

Marshak, 595 F.3d at 486 (citation omitted). Accordingly, valid orders were the 

basis for the district court's Contempt Order against Koresko. 

b. Koresko had Knowledge of the Orders 

The district court found that in addition to his physical presence at hearings, 

Koresko was made aware of the district court's September 16, 2013 order, and 

subsequent orders reaffirming it, through the court's Case Management/Electronic 

Case Filing ("CM/ECF") system. SA-206, 216 (Op. on Mot. for Recons.); SA-150 

(Tr. of Apr. 26, 2016 Conference); see E.D. Pa. Local Rule 5.1.2(4)(c) 

("Registration as an ECF Filing User constitutes agreement to receive and consent 

to make electronic service of all documents as provided in these ECF Procedures in 

accordance with Rule 5(b)(2)(D) of the Federal Rules of Civil Procedure."); see 

also United States v. Coles, 558 F. App'x 173, 182-83 (3d Cir. 2014); United States 

20 
v. Kaplan, 526 F. App'x 208, 216-17 (3d Cir. 2013). 

Koresko also submitted a declaration acknowledging the September 16, 

2013 order and, as mentioned, appealed the order to this Court. SA-46 (Decl. of 

John J. Koresko, V); SA-102-103 (May 4, 2015 Order, No. 13-3827). Specifically, 

Koresko's own submissions, under penalty of perjury, after the issuance of the 

September 16, 2013 order show he knew he was required to transfer the assets in 

Nevis to the independent fiduciary. See, e.g., SA-46 (Decl. of John J. Koresko, V) 

at ¶ 1 ("I was advised that an order would be entered requiring the transfer of the 

Nevis funds to the United States"). There is no dispute that Koresko had 

knowledge of the underlying orders that were the basis for the finding of contempt. 

c. Koresko Disobeyed the Orders 

The district court found as a matter of fact that Koresko directly disobeyed 

the court's orders. SA-151-152 (Tr. of Apr. 26, 2016 Conference). The district 

court found that Koresko had the ability "to transfer these funds" and "assign 

whatever rights he has in the properties to the Independent Fiduciary, but has 

refused to do so." SA-210 (Op. on Mot. for Recons.); SA-151 (Tr. of Apr. 26, 

2016 Conference). The failure to perform as the court specifically directed leaves 

"no question" that Koresko failed to comply with the orders. See Am. Rivers v.

U.S. Army Corp of Eng'rs, 274 F. Supp. 2d 62, 66 (D.C. Cir. 2003). 

Koresko’s unsupported allegation that his failure to comply was not in bad 

21 
 

faith is irrelevant. Willfulness is not an element of civil contempt, and good faith 

efforts to comply are, at most, mitigating factors to be considered when weighing 

the imposition of contempt sanctions. See Lane Labs-USA, Inc., 624 F.3d at 582; 

Harley-Davidson, Inc. v. Morris.,19 F.3d 142, 148-49 (3d Cir. 1994); Robin 

Woods Inc. v. Woods, 28 F.3d 396, 399 (3d Cir. 1984). Moreover, far from 

indicating good faith, Koresko's actions demonstrate he not only consistently failed 

to comply with the court's orders, but deliberately evaded compliance through a 

pattern of delay and disobedience. Nor can Koresko legitimately defend his 

violation as a technical or inadvertent failure to comply. Id. His violation of the 

orders was not inadvertent; he repeatedly chose not to convey the assets or 

property rights to the independent fiduciary. The district court specifically found 

that: 

[the]first order to turn over the Nevisian assets was issued in September of 

2013. In the intervening two and a half years defendant Koresko has 

squandered this Court's patience and disregarded countless opportunities to 

comply with the subsequent orders. At various points the Court has 

appointed counsel for defendant Koresko, paid the costs of the legal 

representation from trust accounts, granted extensions due to his medical 

issues, and awaited his compliance long past the deadlines to do so. 

Nevertheless, defendant Koresko has refused to comply with the Court's 

many orders to transfer these assets to the independent fiduciary, has failed 

to respond to the Secretary's motion for contempt, and has failed to appear. 

SA-152-153 (Tr. of Apr. 26, 2016 Conference). The Contempt Order itself also 

delineates in clear terms what Koresko must do to no longer be held in contempt. 

A48-49. Koresko has never asserted, nor could he, that he complied with the 

22 
 

directives of the court that are the basis of the Contempt Order. In multiple filings 

in this appeal, he still has not provided any evidence that he intends to fully 

comply. 

Koresko asserts that the September 16, 2013 order was imprecise as to what 

assets he must return. But the plain, unambiguous language of that order clearly 

states what was required of Koresko to comply, and the district court properly 

found that Koresko had not done so. Appellant Br. 24-25, 28-30; see Robin

Woods Inc., 28 F.3d at 399. In support of his claim that specific property was not 

identified in the order, Koresko cites to a number of inapposite cases that he claims 

require a finding of possession before one can be found in violation of an order to 

surrender property. Appellant Br. 31-34.4

 But the record is filled with explicit 

references, including Koresko's own admissions, to the trust assets deposited in 

Nevis and the property purchased by Koresko in Nevis with trust assets leaving no 

4

 The cases deal with turnover orders pursuant to the bankruptcy code and the 

surrender of property within that very specific statutory scheme inapplicable here. 

See Maggio, 333 U.S. at 68; In re Rubin, 378 F.2d 104, 109 (3d Cir. 1967) 

(holding appellants should not have been found in contempt where there was 

question as to whether a property right existed at all or was property of the debtor). 

Specifically, in Maggio, the Supreme Court found that the Court of Appeals did 

not believe Maggio was able to comply with the order and the district court felt 

compelled to order commitment only in deference to Court of Appeal's precedent. 

Maggio, 333 U.S. at 77. In direct contrast, here, the district court found explicitly 

that Koresko was in violation of its order and had the ability "to transfer these 

funds" and "assign whatever rights he has in the properties to the Independent 

Fiduciary, but has refused to do so." SA-210 (Op. on Mot. for Recons.); SA-151 

(Tr. of Apr. 26, 2016 Conference). 

23 
question that Koresko was aware of the assets and property being demanded. E.g., 

SA-2 (Appl. for TRO and Prelim. Inj.); SA-12-13, -15 (Tr. of July 8, 2013 TRO 

Hr'g and Status Conference); SA-30, -32-33 (Tr. of Sept. 16, 2013 Mot. Hr'g); SA105-112 (Tr. of Dec. 18, 2013 Dep.); SA-115-121 (Tr. of Jan. 7, 2014 Dep.). The 

district court repeatedly demanded the surrender of these assets and gave Koresko 

numerous opportunities to comply. See, e.g., SA-44-45 (June 27, 2014 Order); 

SA-54-55 (Sept. 10, 2014 Order). There was no confusion or ambiguity 

surrounding the directive issued to Koresko, nor did he at any point ask for 

clarification. Koresko's belated claim of ignorance is another baseless attempt to 

further avoid the return to the plans assets that were wrongly taken. 

In short, Koresko disobeyed the court's September 16, 2013 order and the 

subsequent orders reaffirming it. He never transferred title or assigned ownership 

in the Nevis properties to the independent fiduciary; nor did he surrender the trust 

assets that he transferred first to the Scotia Bank and then, in blatant violation of 

court orders, transferred to the Royal Bank of Trinidad and Tobago. He flouted 

these orders. 

2. Koresko Has No Grounds for an Impossibility Defense 

The defense of impossibility is not available to Koresko because it requires 

the defending party to clearly establish an inability to comply with the court order. 

See United States v. Rylander, 460 U.S. 752, 757 (1983); Hicks v. Feiock, 485 

24 
U.S. 624, 638 n.9 (1988). Impossibility "refers to physical impossibility beyond 

the control of the alleged contemnor," and the court can only excuse Koresko's 

contempt if he was incapable of compliance in spite of his best efforts. Inmates of 

Allegheny Cnty. Jail v. Wecht, 874 F.2d 147, 152 (3d Cir. 1989), vacated on other 

grounds, 493 U.S. 948 (1989); see Lane Labs-USA, Inc. 624 F.3d at 590; Harris, 

47 F.3d at 1324. 

Koresko's execution of documents and previous transfers of the plan assets 

in Nevis show his ability to comply with the district court's orders, whether 

through his own action or through the actions of representatives and agents. See 

e.g., Pl.'s Suppl. Mot. and Exs. in Supp. of Mot. for Adjudication of Civil 

Contempt and Req. for Show Cause Hr'g at 3-4, 6-8, Perez v. Koresko, No. 09-cv0988 (E.D. Pa. March 10, 2014), ECF No. 726; Perez v. Koresko, 86 F. Supp. 3d at 

351-52; SA-61 (Letter from L. McMichael); SA-63-64 (Tr. of Dec. 4, 2014 

Telephone Conference); SA-105-112 (Tr. of Dec. 18, 2013 Dep.); SA-115-121 (Tr. 

of Jan. 7, 2014 Dep.). Furthermore, the district court found that Koresko had the 

ability "to transfer these funds" and "assign whatever rights he has in the properties 

to the Independent Fiduciary, but has refused to do so." SA-210 (Op. on Mot. for 

Recons.); SA-151 (Tr. of Apr. 26, 2016 Conference). Koresko has not established 

any circumstances that prevented compliance with the district court's orders. 

Contrary to Koresko's assertions, the burden of proving a defense of impossibility 

25 
 

is on Koresko, not the Department of Labor. Appellant's Br. 34-38; Camerons 

Hardware Inc. v. Independence Blue Cross, 363 F. App'x 197, 201 (3d Cir. 2010) 

("the party raising the impossibility defense has the burden of proving it"). The 

burden is only met by introducing evidence "beyond 'a mere assertion of inability,' 

and [showing] that [the contemnor] has made 'in good faith all reasonable efforts to 

comply.'" Harris, 47 F.3d at 1324 (citation omitted); see also NLRB v. Trans

Ocean Exp. Packing, Inc., 473 F.2d 612, 616 (9th Cir. 1973); Hicks, 485 U.S. at 

638 n.9; Marks Law Offices, LLC v. Mireskandari, No. 15-3014, 2017 WL 

3575237, at *5 (3d Cir. Aug. 18, 2017). 

If Koresko was not capable of complying, he could have presented evidence 

of impossibility at numerous stages in the proceedings, including at his 

depositions, various status hearings, or in a response to the second motion to 

compel, but he did not. Despite his claim of impossibility now on appeal, Koresko 

did not clearly establish impossibility through evidence at the hearing on 

September 16, 2013, in response to the Secretary's first motion for contempt, or at 

the deposition on June 8, 2016.5 Appellant's Br. 35-36; SA-26 (Tr. of Mot. Hr'g); 

SA-193 (Tr. of June 8, 2016 Dep.). In fact, the district court's findings support the 

opposite conclusion, because Koresko repeatedly admitted, through testimony and 

5

 Koresko refers to evidence offered during "six hours of questioning" on June 8, 

2017. As the district court's docket does not include any hearing held that day it is 

assumed he is referring to the deposition that occurred on June 8, 2016. SA-193. 

26 
his own actions, that he had the ability to transfer and control the assets, including 

by travelling to Nevis to transfer the funds held in the Scotia Bank to the Royal 

Bank of Trinidad and Tobago after the district court had ordered transfer to the 

independent fiduciary. See, e.g., SA-115-121 (Tr. of Jan. 7, 2014 Dep.). 

Koresko's implausible assertions of impossibility do not satisfy his burden of 

proof. See Maggio, 333 U.S. at 75–76. His alleged inability to comply based on 

his own assertions of obstacles without any evidence is inadequate. As in United 

States v. Rylander, cited by Koresko, he has failed to introduce any evidence in 

support of his claim that he is in unable to convey the assets. Appellant's Br. 34-

36; Rylander, 460 U.S. at 757. 

Even now, Koresko cannot establish that compliance with the Contempt 

Order is impossible. Appellant's Br. at 34-38. Koresko's unsuccessful motions in 

this Court requesting relief and immediate release do not satisfy the requirements 

for impossibility. See, e.g., Orders dated March 15, May 2, May 3, May 9, and 

Aug. 18, 2017. The self-serving and unsubstantiated lawyer's report and 

declaration submitted by Koresko for the first time in this Court are not in the 

record on appeal. Fed. R. App. Proc. 10(a) (defining the record on appeal); 3d Cir. 

L.A.R. 30.3 (2011). This Court does not consider new evidence presented for the 

first time on appeal. Adegbuji v. Fifteen Immigration & Customs Enf't Agents, 

169 F. App'x 733, 736 (3d Cir. 2006); In re Application of Adan, 437 F.3d 381, 

27 
389 n.3 (3d Cir. 2006); Mills v. Phila. Gas Works, 264 F. App'x 239, 241 (3d Cir. 

2008). Additionally, Koresko relies on the granting of in forma pauperis status as 

evidence of impossibility. Appellant's Br. 36. However, in forma pauperis status 

in no way establishes a lack of possession or control of the plan assets at issue in 

the contempt proceeding, only that "appellant qualifies for in forma pauperis 

status." 3d Cir. L.A.R. 24.3 (2011); see Clerk Order, March 30, 2017 ("Appellant 

is advised that the Court may reconsider in forma pauperis status or request 

additional information at any time during the course of this appeal."). Koresko has 

not met his burden to prove the defense of impossibility to excuse his failure to 

comply with the district court's orders. 

3. The Contempt Order Was Based on Violations of Orders that 

Were Not Supplanted by the Final Judgment 

Koresko's attempts to excuse his repeated violation of court orders by 

declaring that the final judgment did not explicitly demand "surrender" of the 

assets taken from the trusts are meritless. Appellant Br. 30-31. The final order 

issued by the district court, and upheld by this Court, demands that Koresko return 

all assets of the trust in his possession. SA-69 (Mar. 13, 2015 J. and Order); Sec'y 

U.S. Dep't of Labor v. Koresko, 646 F. App'x 230, 245-46 (3d Cir. 2016). The 

final order and judgment specifically notes that the total liability of the monetary 

judgment ($38,417,109.63) does not include the amount of plan assets Koresko 

transferred to Nevis, the assets at issue in the Contempt Order. SA-67 n. 2. 

28 
Koresko is liable for the total monetary judgment, and he must also comply with 

the court's orders to return to the trust the plan assets he illegally transferred. This 

appeal concerns only the Contempt Order, which found Koresko failed to comply 

with those orders. Accordingly, the final order and judgment in no way supersedes 

the Contempt Order. See Maggio, 333 U.S. at 69 ("when it has become final, 

disobedience cannot be justified by re-trying the issues as to whether the order 

should have issued in the first place"). 

Koresko is incorrect that the final judgment "swallowed up" the prior orders 

of the district court requiring Koresko restore to the trusts the assets he was found 

to have taken. Appellant's Br. 38. In fact, this Court has held that "contempt 

orders are not mooted by the termination of the underlying proceeding." Harris, 

582 F.3d at 516. The Contempt Order executed by the district court is based in the 

district court's authority "to coerce the defendant into compliance with the court's 

order." McDonald's Corp., 727 F.2d at 87 (citations omitted). This appeal 

addresses the ability of the district court to enforce its own valid orders. As 

Koresko has not complied with the court's valid orders, he was, and remains, in 

contempt. 

B. Koresko Is Not Imprisoned for Criminal Contempt or to Collect a 

Debt 

As this Court held in United States v. Harris, contempt is proper where a 

person disobeys a court order, and coercive imprisonment, which may be purged 

29 
 

by obeying conditions set by the court, is a proper form of civil contempt. 582 

F.3d 512, 519 (3d Cir. 2009). The court has wide discretion to tailor the most 

effective remedy to obtain compliance. See Harris v. City of Philadelphia, 47 F.3d 

1311, 1328 (3d Cir. 1995); Elkin v. Fauver, 969 F.2d 48, 52 (3d Cir. 1992). In 

exercising that discretion, the court may deploy "a variety of weapons" to coerce 

compliance, including "an indeterminate period of confinement which may be 

brought to an end only by the contemnor's ultimate adherence to the court order." 

Latrobe Steel Co., 545 F.2d at 1344. 

1. Koresko's Identified "Attributes" Do Not Transform the Civil 

Contempt Order into a Criminal Contempt Order 

Koresko purports to identify a number of "attributes" that indicate the 

Contempt Order at issue was criminal in nature and thus improper. Appellant's Br. 

45-47. The record plainly shows, however, that the district court issued an order of 

civil contempt.6

 "The dichotomy between criminal and civil contempt lies in the 

function of the order." McDonald's Corp., 727 F.2d at 86; Roe, 919 F.2d at 868. 

Civil contempt orders are issued to coerce present compliance with a court order, 

while criminal contempt orders are intended to punish past violations of a court 

order. Hicks, 485 U.S. at 631; see also Berne Corp. v. Gov't of the Virgin Islands, 

570 F.3d 130, 139 (3d Cir. 2009) (holding the district court's order was intended to 

6

 Koresko's discussions of his solitary confinement are not relevant to this appeal 

as prison conditions are at the discretion of the U.S. Bureau of Prisons and have no 

impact on the legality of the Contempt Order. See, e.g., Appellant's Br. 46. 

30 
coerce compliance with a previous order, not to impose punishment for refusing to 

abide by it); Gompers v. Buck's Stove & Range Co., 221 U.S. 418, 441–42 (1911) 

("It is not the fact of punishment, but rather its character and purpose, that often 

serve to distinguish between the two classes of cases."). The district court 

understood this distinction. SA-212 n.4 (Op. on Mot. for Recons.) 

When the relief ordered is imprisonment, the contempt remains civil in 

nature "if the defendant stands committed unless and until he performs the 

affirmative act required by the court's order." Roe, 919 F.2d at 868 (internal 

quotations marks omitted) (citation omitted); see Chadwick v. Janecka, 312 F.3d 

597, 608 (3d Cir. 2002); Harris, 582 F.3d at 519; Int'l Union, 512 U.S. at 828. 

Koresko has not complied with the court orders by transferring the plan funds and 

the indicia of ownership in the Nevis properties to the independent fiduciary; 

therefore, his continuing incarceration is a proper application of civil contempt. 

A48-49 (Apr. 26, 2016 Order). 

In fact, this Court has held that "a valid order of civil contempt does not 

become punitive simply because the contemnor persists in punishing himself." 

Harris, 582 F.3d at 520. An order of civil contempt only becomes punitive, and 

therefore criminal, if the circumstances are such that the court is maintaining 

contempt for an impermissible punitive purpose. Harris, 582 F.3d at 520. As in 

Harris, here the Court should not "'dissolve a lawful order . . . merely because the 

31 
contemnor persists in violating it.'" Id. at 519 (citation omitted) (upholding 

incarceration for over five years); see also Chadwick, 312 F.3d at 611–12. 

Koresko has the ability to prevent his incarceration, but he simply refuses to 

exercise that ability. Accordingly, there is no punitive intent and the Contempt 

Order is civil. 

2. The Government Seeks the Recovery of Plan Assets 

The district court entered the Contempt Order against Koresko for a 

remedial and coercive purpose – seeking the rightful return of assets to the plans. 

Koresko admitted he used trust assets to purchase condominiums and transferred 

$1.68 million dollars in plan assets to Nevis. SA-12-13, -15 (Tr. of July 8, 2013 

TRO Hr'g and Status Conference); SA-30, -32-33 (Tr. of Sept. 16, 2013 Mot. 

Hr'g); SA-105-112 (Tr. of Dec. 18, 2013 Dep.); SA-114 (Tr. of Jan. 7, 2014 Dep.); 

SA-205 (Op. on Mot. for Recons.). In its order on September 16, 2013, and in the 

Contempt Order, the district court demanded Koresko return these plan assets in 

order to make the plans whole again, not to collect a monetary judgment against 

Koresko. SA-20-21 (Sept. 16, 2013 Order); A48-49 (Apr. 26, 2016 Order); SA154-156 (Tr. of Apr. 26, 2016 Conference); Solis v. Koresko, 2013 WL 5272815, 

at *7; Perez v. Koresko, 86 F. Supp. 3d at 307. The Contempt Order intends to 

coerce Koresko to return the identified assets to the plans and in doing so "look[s] 

to the future and [is] designed to aid the plaintiff by bringing a defiant party into 

32 
 

compliance with the court order." Latrobe Steel Co., 545 F.2d at 1344. 

In the instant case, the Secretary is seeking the recovery of misappropriated 

plan assets, not imposing a penalty for misconduct, and numerous orders of the 

court, including the final judgment, have been issued toward that end. SA-20-21 

(Sept. 16, 2013 Order); SA-37-38 (Dec. 19, 2013 Order); SA-39-43 (Apr. 1, 2014 

Order); SA-44-45 (June 27, 2014 Order); SA-54-55 (Sept. 10, 2014 Order); SA56-57 (Oct. 15, 2014 Order); SA-58 (Dec. 4, 2014 Order); SA-59-60 (Dec. 15, 

2014 Order); SA-66-71 (Mar. 13, 2015 J. and Order); A48-49 (Apr. 26, 2016 

Order). The Secretary of Labor has the authority to sue on behalf of plans and 

beneficiaries to recover assets to correct wrongs committed by fiduciaries under 

sections 502(a)(2) and (a)(5) of ERISA, 29 U.S.C. § 1132(a)(2), (a)(5). The 

Secretary's action and the district court's orders are not seeking restitution for the 

benefit of the Secretary or the court, and neither are the payees of the assets 

demanded. Appellant's Br. 40-42, 44. Instead, as in Doyle v. London Guar. & 

Accident Co., Ltd., cited by Koresko, the monetary remedy enforced here is for the 

benefit of private parties (the plans and their participants and beneficiaries) through 

the return to the plans of the assets misappropriated by Koresko.7 204 U.S. 599, 

7 Unlike Bessette v. W.B. Conkey Co., cited by Koresko, the Contempt Order does 

not concern a non-party or a fine payable to the United States. 194 U.S. 324, 338 

(1904). Here, the district court is demanding that Koresko return assets that this 

Court has held belong to the plans and must be returned. 

33 
 

 

606-07 (1907) (holding the contempt order was civil in nature as the proceeding 

was "to enforce an order seeking the protection of rights of the party to the suit for 

whose benefit it was made" and compliance with the order avoided the 

incarceration). "It's well established that an equitable [order] in an ERISA case 

may be enforced by contempt." SA-214 (Op. on Mot. for Recons.) (quoting 

Chesemore v. Fenkell, 829 F.3d 803, 817 (7th Cir. 2016)). 

Accordingly, the Contempt Order would pass the so-called "government 

interest test" asserted by Koresko to distinguish criminal versus civil contempt.8 

Appellant's Br. at 42-44 (citing In re Nevitt, 117 F. 448, 458-59 (8th Cir. 1902)). 

Even if such a test applies, the Contempt Order was not based on a governmental 

interest in the specific assets, because the ultimate party in interest here is the plans 

that have been wronged by Koresko.9

 Most importantly, the Supreme Court has 

8

 Koresko claims that United States v. Spectro Foods Corp. supports his 

application of a "government interest" test. Appellant's Br. 44. In that case, 

however, this Court did not discuss the role of the government as a party but 

vacated the contempt order because it had punitive elements, namely a flat fine for 

past misconduct. United States v. Spectro Foods Corp., 544 F.2d 1175, 1182–83 

(3d Cir. 1976). The Contempt Order here is purely coercive and there is no 

evidence that the order serves as punishment for past conduct, only to enforce 

compliance with a valid order. 

9

 The other two cases cited by Koresko support that contempt orders may be civil 

in a case involving the Government. Rylander, 460 U.S. at 761 (upholding an 

order of civil contempt for failure to comply with an IRS summons "until he either 

produces the documents which the District Court found to be in his possession, or 

adduces evidence as to his present inability to comply with that order"); McCrone 

v.United States, 307 U.S. 61(1939) (upholding an order of contempt for refusal to 

34 
 

clarified that "the mere presence of the United States as a party, acting through its 

agents, does not impress upon the controversy the elements of a criminal 

proceeding." McCrone v. United States, 307 U.S. 61, 64 (1939). This Court and 

the Supreme Court have upheld orders of civil contempt where the United States or 

its representative is a party in the action. United States v. Rylander, 460 U.S. 752, 

757 (1983); Shillitani, 384 U.S. at 370-71; Lane Labs-USA, Inc., 624 F.3d at 582, 

591; Harris, 582 F.3d at 520. Therefore, the Contempt Order serves to protect the 

rights of the plans and their participants and beneficiaries, as the parties in interest, 

by enforcing compliance with the court's orders and is thereby entirely civil. 

Nevitt, 117 F. at 456 (finding contemnors were "imprisoned for the purpose of 

protecting or enforcing the private rights and remedies of parties to civil suits," and 

thus the contempt was civil). 

3. The Contempt Order Was Not for Debt Collection but 

Compliance with Court Orders 

Koresko also falsely alleges he is improperly imprisoned for a debt owed. 

Appellant's Br. at 48-52. He is imprisoned only for disobeying orders to return 

assets that belonged to his victims, not to repay a debt. SA-20-21 (Sept. 16, 2013 

Order); SA-39-43 (Apr. 1, 2014 Order); SA-44-45 (June 27, 2014 Order); SA-54-

55 (Sept. 10, 2014 Order); SA-56-57 (Oct. 15, 2014 Order); SA-58 (Dec. 4, 2014 

testify in a proceeding under the Internal Revenue laws because the proceeding 

was civil and not criminal). 

35 
Order); SA-59-60 (Dec. 15, 2014 Order); SA-69 (Mar. 13, 2015 J. and Order); 

A48-49 (Apr. 26, 2016 Order). These are assets that Koresko admitted belonged to 

the plans, he deposited in accounts, and used to purchase property outside of the 

country. SA-12-13, -15 (Tr. of July 8, 2013 TRO Hr'g and Status Conference); 

SA-30, -32-33 (Tr. of Sept. 16, 2013 Mot. Hr'g); SA-105-112 (Tr. of Dec. 18, 2013 

Dep.); SA-114 (Tr. of Jan. 7, 2014 Dep.); SA-205 (Op. on Mot. for Recons.). Both 

the judgment upheld by this Court and the Contempt Order require the return of 

assets belonging to the plans. SA-69 (Mar. 13, 2015 J. and Order); Sec'y U.S. 

Dep't of Labor v. Koresko, 646 F. App'x at 245-46; A48-49 (Apr. 26, 2016 Order); 

see Trans Ocean Exp. Packing, Inc., 473 F.2d at 615–16 (finding a contempt order 

to compel the production of records cannot be analogized to proceedings for 

enforcement of a debt under federal statute); Oriel v. Russell, 278 U.S. 358, 365– 

66 (1929) (citation omitted) ("'Actual or virtual imprisonment for debt has ceased, 

but imprisonment to compel obedience to a lawful judicial order (if it appear that 

obedience is being willfully refused) has not yet ceased, and ought not to cease, 

unless it should be thought expedient to destroy all respect for the courts by 

stripping them of power to enforce their lawful decrees.'"). Federal and state 

statutes regarding imprisonment for debt are completely irrelevant, and Koresko is 

in no way entitled to bail based on a state provision he cites. Appellant's Br. at 48-

51; see Hicks, 485 U.S. at 630 (recognizing that federal, not state, law governs 

36 
 

 

 

federal contempt proceedings).10 

C. The Government Has Authority to Complete Collection Activities and 

the Garnishment Order Was Proper 

Separately, Koresko also challenges the court's Garnishment Order. 

Garnishment orders are reviewed for an abuse of discretion. See United States v.

Clayton, 613 F.3d 592, 595 (5th Cir. 2010). The Garnishment Order is the result 

of the Secretary's efforts to collect on the final judgment for losses and 

disgorgement of profits in the amount of $38,417,109.63, separate from the 

recovery of specific plan assets that is the focus of the Contempt Order. SA-69-70 

(Mar. 13, 2015 J. and Order). The district court denied Koresko's Motion to Quash 

Writ of Attachment and ordered that Jetstream Escrow pay the sum of $50,000 to 

the independent fiduciary. See A45 (Dec. 5, 2016 Order). The Garnishment Order 

was valid, and it was properly served. 

The Secretary has authority under ERISA to pursue monetary relief against 

Koresko for his breaches of fiduciary duties. Both the district court and this Court 

have held that Koresko committed fiduciary breaches in overseeing the plan, and 

on this basis, he is personally liable to disgorge his profits and restore losses to the 

plans out of his personal assets. See 29 U.S.C. § 1109(a) (a breaching fiduciary 

Koresko's citation to McDonald's Corp. v. Victory Investments is inapposite. 

There, the court invoked contempt for the defendant's failure to pay attorney fees 

as required by court order. McDonald's Corp., 727 F.2d at 86; Appellant's Br. at 

48-49. The court, in fact, did not reach the merits of whether imprisonment was 

permitted. McDonald's Corp., 727 F.2d at 86-87. 

37 

10 
"shall be personally liable to make good to such plan any losses to the plan 

resulting from each such breach"); Perez v. Koresko, 86 F. Supp. 3d at 393 

(finding defendants liable for restitution and disgorgement to the plans as 

breaching fiduciaries). This Court upheld the district court's judgment and damage 

calculation. Sec'y U.S. Dep't of Labor v. Koresko, 646 F. App'x 230 (3d Cir. 

2016). The Secretary made a demand for payment of this outstanding judgment, 

and, pursuant to 28 U.S.C. § 3205, the Garnishment Order was executed. SA-223-

225 (Writ of Continuing Garnishment). 

In response, Koresko provides an inaccurate citation to and discussion of the 

"Debt Collection Act." Appellant's Br. at 53. The Federal Debt Collection 

Procedures Act permits the government to garnish "property . . . in which the 

debtor has a substantial nonexempt interest." 28 U.S.C. § 3205(a). The Secretary 

is able to execute garnishment under the long-arm execution statute, 28 U.S.C. § 

2413, bypassing any local registration requirement for immediate implementation. 

See, e.g., S.E.C. v. Gold Standard Mining Corp., 2017 WL 760773, at *2 (C.D. 

Cal. Jan. 19, 2017); United States v. Palmer, 609 F. Supp. 544, 548 (E.D. Ten. 

1985); United States v. Thornton, 672 F.2d 101, 104 (D.C. Cir. 1982); see Clark v. 

Wilbur, 913 F. Supp. 463, 465–66 (S.D.W. Va. 1996), aff'd sub nom. Clark v. 

Allen, 139 F.3d 888 (4th Cir. 1998). The Secretary followed the required 

procedures under those statutes. The Secretary's representative recorded the final 

38 
judgment with the Oklahoma County Clerk in the State of Oklahoma, based on 

information that Koresko had funds from his personal accounts held in escrow in 

the County of Oklahoma. SA-222 (Abstract of J.). The district court issued the 

Garnishment Order for these funds, SA-223-225, which the Secretary's counsel 

served upon both Jetstream Escrow and Koresko, SA-226-227. Jetstream Escrow 

acknowledged service and waived any objection to personal jurisdiction when it 

filed an answer without raising any objections. SA-219-221 (Answer of the 

Garnishee). The Department of Labor therefore had the requisite authority to 

collect on the garnishment on behalf of the plans and its participants and 

beneficiaries for the $50,000 deposited by Koresko with Jetstream Escrow. 

Koresko's argument turns on the misconception that the Secretary is seeking 

to recover a government debt. However, the garnishment order was not to collect 

any debt owed to the Department of Labor or the independent fiduciary, as 

Koresko asserts, but enforcing a recovery on behalf of the plans and its participants 

and beneficiaries. Appellant's Br. at 51-52; 29 U.S.C. § 1132(a)(2), (a)(5). The 

Secretary is executing a monetary judgment against Koresko, a fiduciary under 

ERISA section 409(a), 29 U.S.C. § 1109(a), for restitution for losses and 

disgorgement of profits, and the plan cannot be made whole until that judgment is 

satisfied. 

This Court should affirm the Contempt Order and the Garnishment Order 

39 
 

because Koresko failed to demonstrate that the district court abused its discretion, 

made a clearly erroneous factual finding, or incorrectly decided any question of 

law. 

II. THE DISTRICT COURT DID NOT VIOLATE KORESKO'S DUE 

PROCESS RIGHTS IN ENTERING THE CONTEMPT ORDER 

A. Koresko was Provided Notice and Opportunity to Respond 

Koresko contends that the district court violated his right to due process 

when it entered the Contempt Order. For civil contempt sanctions, due process is 

satisfied by notice and a hearing appropriate to the nature of the case. Harris, 47 

F.3d at 1322; Interdynamics, Inc. v. Firma Wolf, 653 F.2d 93, 97 (3d Cir. 1981); 

see Bell v. Burson, 402 U.S. 535, 541-42 (1971) (finding the hearing required by 

due process must be appropriate to the nature of the case). Because they are nonpunitive and avoidable through obedience to the court, civil contempt sanctions 

require fewer procedural protections under the Fifth and Fourteenth Amendments' 

Due Process Clause than would be required for criminal contempt and may be 

imposed through a normal civil proceeding.11 Turner v. Rogers, 564 U.S. 431, 442 

(2011); Int'l Union, 512 U.S. at 827, 831; Lundy v. Yost, 405 F. App'x 690, 695 

11 As this Court noted in B & G Const. Co., Inc. v. Director, Office of Workers' 

Compensation Programs, 662 F.3d 233, 246 n.14, 253 (3d Cir. 2011), while the 

Appellant relies on procedural "due process" cases concerning the Fourteenth 

Amendment, this claim in federal court concerns the Fifth Amendment. As in B & 

G Const., this brief assumes the cited cases relying on the Fourteenth Amendment 

are applicable to this Fifth Amendment claim.

40 
(3d Cir. 2011). The district court found that because Koresko and counsel received 

adequate notice of the proceedings, were given an opportunity to respond in 

writing and appear at a hearing, and Koresko had the option of privately retaining 

counsel, the requirements of due process in a civil contempt proceeding were met. 

Appellant's Br. 60-67; SA-147-148 (Tr. of Apr. 26, 2016 Conference). Moreover, 

Koresko was represented by counsel at the time of the hearing, which neither 

Koresko nor his counsel decided to attend despite ample notice. Nor does 

Koresko's failure to appear at the hearing result in a violation of due process. As 

this Court held in Roe v. Operation Rescue, 920 F.2d 213, 217-19 (3d Cir. 1990), 

default judgment may be entered if, after adequate notice, a defendant fails to make 

a timely appearance in a civil contempt proceeding. 

Koresko has not shown that he was denied due process in any way. First, 

Koresko alleges he was not afforded notice of the hearing. Appellant's Br. 60-63. 

As the district court found, from October 2013 through May 26, 2016, Koresko 

was represented by counsel. See SA-215 (Op. on Mot. for Recons.); SA-35 (Entry 

of Appearance of Lawrence McMichael); SA-158 (Notice of Withdrawal of 

Dilworth Paxson LLP). This period covers the events leading up to and after the 

contempt hearing. If a party is represented by an attorney, service "must be made 

on the attorney unless the court orders service on the party." Fed. R. Civ. P. 

5(b)(1). The district court found the Department of Labor served Koresko's 

41 
attorney with the second motion for contempt and Koresko himself was properly 

served as a participant in the CM/ECF system. Supra Sec. I.A.1.b; SA-216 (Op. on 

Mot. for Recons.); Mem. of Law in Supp. of Secretary's Second Mot. for Contempt 

at 20, Perez v. Koresko, No. 09-cv-0988 (E.D. Pa. Feb. 9, 2016), ECF No. 1283-1. 

Koresko entered an appearance on his own behalf in April 2009 in this matter and 

from that date received notifications from the CM/ECF system. SA-216 (Op. on 

Mot. for Recons.); SA-1 (Entry of Appearance by John J. Koresko, V). Indeed, 

Koresko admitted in a hearing on May 18, 2016, that he received email notices 

related to the case. SA-189-191 (Tr. of Status Conference). Therefore, Koresko 

was afforded actual notice and his discussion of legal standards for failed attempts 

of notice is irrelevant. Appellant's Br. 62-63. Koresko also received service of the 

motion and order as indicated by a document he filed with the district court in 

response to the Contempt Order on May 2, 2016, after the issuance of the 

Contempt Order on April 26, 2016, and before a bench warrant was issued for his 

arrest on May 5, 2016. See Letter from Koresko re: Resp. to Mot. for Contempt, 

Perez v. Koresko, No. 09-cv-0988 (E.D. Pa. May 3, 2016), ECF No. 1310; SA-211 

(Op. on Mot. for Recons.). 

Accordingly, Koresko has not established the district court’s factual findings 

that Koresko received notice of the hearing and service of the motion and order 

were clearly erroneous, and this Court should affirm them. SA-215-216 (Op. on 

42 
 

 

Mot. for Recons.); Mireskandari, 2017 WL 3575237, at *4 (non-precedential) 

(finding evidence defendants had actual notice satisfied due process).

12 

Koresko also claims with conclusory assertions that one letter from the 

condominium holding company concerning Koresko's ownership of condominium 

property in Nevis admitted to support the finding of contempt was hearsay. 

Appellant's Br. at 59-60. First, the letter was merely cumulative of other evidence. 

The district court relied on Koresko's own admissions to find the same facts 

recorded in the letter and ample other evidence was provided to establish Koresko's 

purchase of property in Nevis including a certificate of title. SA-205-206 (Op. on 

Mot. for Recons.); Exs. to Secretary's Second Mot. for Contempt, Perez v. 

Koresko, No. 09-cv-0988 (E.D. Pa. Feb. 9, 2016), ECF No. 1283. The 

overwhelming evidence provided in support of the Secretary's second motion for 

contempt went far beyond the specific letter Koresko objects to and satisfied the 

district court that "clear and convincing" standard required for an order of 

contempt was met. Supra I.A.1; SA-152 (Tr. of Apr. 26, 2016 Conference); SA218 (Op. on Mot. for Recons.); Lane Labs-USA, Inc., 624 F.3d at 582; Marshak, 

12 Contrary to Koresko's arguments, personal service of the civil contempt filings 

was not required under Federal Rules of Civil Procedure 4, 4.1, or 5 as these rules 

are not strictly applicable to the contempt proceedings, and Koresko consented to 

electronic service for regular filings. Appellant's Br. 61-63; see Fed. R. Civ. P. 4; 

Fed. R. Civ. P. 4.1; Fed. R. Civ. P. 5 (applicable to the service of pleadings, 

including service "by electronic means if the person consented in writing"). 

43 
595 F.3d at 485; Harris, 47 F.3d at 1321, 1326. Second, the document would be 

admissible hearsay under the exception contained in Federal Rule of Evidence 

803(15). Fed. R. Evid. 803(15) ("A statement contained in a document that 

purports to establish or affect an interest in property if the matter stated was 

relevant to the document’s purpose — unless later dealings with the property are 

inconsistent with the truth of the statement or the purport of the document."); 

United States v. Abbey, 2007 WL 216294 (E.D. Mich. Jan. 25. 2007). For all 

these reasons, Koresko's hearsay objection has no merit. 

Koresko argues that some form of affidavit was required to be in evidence 

by citing to the standards for seizure of property, but the standards for seizure of 

property are not relevant to the legality of the Contempt Order requiring Koresko 

to return plan assets that are not his property. Appellant's Br. 57-58. Because he 

was given notice of the contempt proceeding and a hearing was held, Koresko's 

arguments that his procedural due process rights were violated are unsupportable. 

Appellant's Br. at 55-57. The cases cited by Koresko in support of his assertion 

that additional procedures were required are all distinguishable from the instant 

case. In Gault, the Supreme Court determined that juveniles who had been arrested 

as delinquents and sentenced to imprisonment were afforded certain procedural 

protections. In re Gault, 387 U.S. 1 (1967) (discussing the procedural protections 

owed under the statutory scheme for juvenile case adjudication). However, the 

44 
Court explicitly stated that the Gault standards relied upon by Koresko were 

"concerned only with a proceeding to determine whether a minor is a 'delinquent' 

and which may result in commitment to a state institution." In re Gault, 387 U.S. 

at 44. The other two cases Koresko cites were also limited by the statutory context 

of the procedures under review, i.e., the termination of welfare benefits and the 

revocation of a government security clearance, but even if they were to apply, 

Koresko was afforded the right of an evidentiary hearing to dispute any evidence 

before contempt was ordered. Goldberg v. Kelly, 397 U.S. 254, 255 (1970) 

(welfare); Greene v. McElroy, 360 U.S. 474, 508 (1959) (security clearance). 

This Court may not invalidate a civil contempt order on the basis of the due 

process standards that apply to different proceedings. Hicks, 485 U.S. at 638. 

Affording Koresko with an opportunity to respond to the contempt motion in 

writing and at a hearing satisfied the district court's obligation to provide Koresko 

with notice and opportunity to be heard before imposing the contempt sanction. 

B. The District Court Did Not Deny Koresko Any Right to Counsel 

Koresko also alleges he was deprived of the right to counsel. The Contempt 

Order at issue is not criminal and, therefore, the Sixth Amendment right to counsel 

is not implicated in this case. Camerons Hardware Inc., 363 F. App'x at 200 n.6. 

"The Supreme Court has not recognized nor has the court of appeals found a 

constitutional right to counsel for civil litigants." Parham v. Johnson, 126 F.3d 

45 
 

454, 456 (3d Cir. 1997). The cases cited by Koresko, particularly Turner v. 

Rogers, do not support Koresko's argument that he was deprived of a right to 

counsel under the Fifth Amendment's Due Process Clause based on cases 

discussing that right under the Fourteenth Amendment.13 Appellant's Br. 64-67; 

see Turner, 564 U.S. at 442-43 (finding no right to counsel under the Fourteenth 

Amendment when incarceration is threatened in civil contempt proceedings related 

to child support orders); Vitek v. Jones, 445 U.S. 480, 496–497 (1980) (finding no 

right to counsel under the Fourteenth Amendment in a proceeding to transfer a 

prison inmate to a hospital for the mentally ill); Lassiter v. Dep't of Soc. Servs. of 

Durham Cnty., 452 U.S. 18, 31-32 (1981) (finding no right to counsel in a civil 

proceeding leading to a loss of parental rights). In Turner, the Supreme Court 

explicitly held that "the Due Process Clause does not always require the provision 

of counsel in civil proceedings where incarceration is threatened." Turner, 564 

U.S. at 446. The safeguards discussed in Turner are not relevant to the instant case 

as the Contempt Order is not concerned with Koresko's financial ability to pay a 

debt, but the return of plan assets he admittedly deposited outside of the country. 

See supra Sec. I.B.3. The cases cited by Koresko that found a right to counsel are 

readily distinguishable, because they involved juveniles or criminal prosecutions. 

See In re Gault, 387 U.S. at 35–42 (finding a right of counsel in a juvenile 

13 Supra note 11. 

46 
delinquency proceeding which may result in commitment to a state institution); 

Powell v. Alabama, 287 U.S. 45, 73 (1932) (finding a due process violation in 

denial of the right to counsel in criminal prosecutions). 

Koresko has repeatedly asserted that the Secretary and the district court 

deprived him of counsel paid by the plans or the court. Appellant's Br. 63-67. The 

district court, however, did not deny Koresko counsel at any stage. At most, the 

district court only determined that, as a matter of law, under ERISA, Koresko was 

not entitled to be indemnified by the trusts for the cost of his defense after he was 

found to have breached his fiduciary duties. SA-78-82 (May 13, 2015 Mem. Op.); 

SA-125 (Mar. 31, 2016 Order). Koresko's counsel withdrew from representation, 

but not until after the Contempt Order was in place. SA-181-188 (Tr. of May 18, 

2016 Status Conference); SA-158 (Notice of Withdrawal of Dilworth Paxson 

LLP). The district court did not bar Koresko from being represented; it merely 

followed the law by not permitting Koresko to pay for his representation with 

money from the trusts that he wronged. Most importantly, as Koresko himself 

concedes in his brief, his attorney presented numerous arguments against the 

second motion for contempt before the finding of contempt, see Appellant's Br. 16-

17, and after he was found in contempt, see Appellant's Br. 21 ("motion to set aside 

the order of contempt"). See also SA-131 (Def.'s Mem. of Law in Supp. of Mot. 

for Relief from Civil Contempt Order); SA-181 (Tr. of May 18, 2016 Status 

47 
Conference). Both Koresko and his counsel received notice of the hearing but 

neither decided to appear. SA-124 (Mar. 31, 2016 Order); SA-148 (Tr. of Apr. 26, 

2016 Conference); SA-209-210 (Op. on Mot. for Recons.). Furthermore, as his 

counsel remained counsel of record throughout this period, Koresko was never 

denied a right to counsel. See SA-215 (Op. on Mot. for Recons.); SA-35 (Entry of 

Appearance of Lawrence McMichael); SA-158 (Notice of Withdrawal of Dilworth 

Paxson LLP). 

In conclusion, Koresko's contention that he was denied due process is 

meritless. 

III. THE DISTRICT COURT HAD SUBJECT-MATTER JURISDICTION 

TO ENTER THE CONTEMPT ORDER AND OVER ALL PRIOR 

AND SUBSEQUENT PROCEEDINGS 

A. Koresko's Arguments Are Barred under the Law of the Case Doctrine 

The entirety of Koresko 's jurisdictional argument is barred by the law of the 

case, as these issues were previously briefed, argued, and decided by this Court in 

Secretary, United States Department of Labor v. Koresko, 646 F. App'x 230 (3d 

Cir. 2016). Appellant's Br. 68-86; Brown v. United States, 508 F.2d 618, 630 (3d 

Cir. 1974). Under the law of the case doctrine, the "reconsideration of issues 

previously resolved by an earlier panel" is barred. Atl. Coast Demolition & 

Recycling, Inc. v. Bd. of Chosen Freeholders of Atl. City, 112 F.3d 652, 663 (3d 

Cir. 1997) (citations omitted), amended, 135 F.3d 891 (3d Cir. 1998). These 

48 
arguments are also precluded under res judicata as the issues were decided in a 

final adjudication on the merits in this Court between the same parties. See, e.g., 

Am. Sur. Co. v. Baldwin, 287 U.S. 156, 166 (1932) ("The principles of res judicata 

apply to questions of jurisdiction as well as to other issues."); Allen v. McCurry, 

449 U.S. 90, 94 (1980); Gen. Motors Corp. v. New A.C. Chevrolet, Inc., 263 F.3d 

296, 336 n. 25 (3d Cir. 2001). 

Koresko has not asserted that any of the traditional exceptions to the law of 

the case doctrine or res judicata apply, giving no reason to revisit any of these 

issues. Atl. Coast Demolition & Recycling, Inc., 112 F.3d at 663; AL Tech 

Specialty Steel Corp. v. Allegheny Int'l Credit Corp., 104 F.3d 601, 605 (3d Cir. 

1997). No underlying defects in any action of the district court invalidated the 

subsequent proceedings, including the Contempt Order and Garnishment Order. 

Contrary to Koresko's repeated arguments, the district court had and retained 

jurisdiction over this matter. Appellant's Br. 78, 80-82, 85-86; U.S. Dep't of Labor 

v. Koresko, 646 Fed. App'x at 232 (addressing this argument); 29 U.S.C. § 

1132(e)(1). In 2013, the district court had jurisdiction under ERISA, and therefore 

had the authority to remove Koresko and other defendants as fiduciaries and direct 

the appointment of an independent fiduciary to take control of the plans and trusts 

at issue. See Sec'y U.S. Dep't of Labor v. Koresko, 646 F. App'x at 236, 240; 29 

USC § 1109(a). Similarly, despite Koresko's recurring assertions, the Department 

49 
of Labor has standing to sue on behalf of the plan and/or plan beneficiaries. 

Appellant's Br. 81-82; 29 U.S.C. § 1132(a)(2), (a)(5). 

Furthermore, in Secretary United States Department of Labor v Koresko, 

646 F. App'x 230 (3d Cir. 2016), this Court explicitly determined that the plans at 

issue were covered by ERISA, that the plan amendment Koresko relies upon for 

absolution was invalid, and that indemnification of Koresko was not permitted. 

Sec'y U.S. Dep't of Labor v. Koresko, 646 Fed. App'x at 236, 240, 243, 244-45. 

Koresko, however, again raises these issues, despite the clear prior determination 

from this Court. Appellant's Br. 68-69, 76-82; Sec'y U.S. Dep't of Labor v. 

Koresko, 646 Fed. App'x 230 (3d Cir. 2016). Koresko has already argued and this 

Court has already determined in a prior appeal that the plan documents themselves 

did not absolve Koresko of liability. Appellant's Br. 69-7;Sec'y U.S. Dep't of 

Labor v. Koresko, 646 Fed. App'x at 236, 238 (addressing this argument). 

Furthermore, the plan documents in no way empowered Koresko to remove funds 

from the plans for his own personal use and gain. See Sec'y U.S. Dep't of Labor v. 

Koresko, 646 Fed. App'x at 245. 

The remedy in the underlying action was also upheld by this Court and 

Koresko's collateral attack on the judgment is impermissible. Appellant's Br. 81-

82, 85-86; Sec'y U.S. Dep't of Labor v. Koresko, 646 Fed. App'x at 245-46 

(addressing this argument). 

50 
 

B. The Contempt Order is Not Based on ERISA 

The orders at issue in this appeal deal with the ability of the district court to 

enforce its own orders and judgment. See supra Part I.A. Therefore, Koresko's 

argument that they are invalid because they are outside the scope of ERISA is 

entirely misplaced. Appellant's Br. 80, 82-85. The Contempt Order is based not 

on ERISA, but on the district court's authority "to coerce the defendant into 

compliance with the court's order." McDonald's Corp., 727 F.2d at 87 (citations 

omitted); United States v. Asay, 614 F.2d 655, 660 (9th Cir. 1980) (finding a civil 

contempt order was not one arising under the Internal Revenue Code, but "imposed 

under the court's inherent contempt power" to provide an orderly judicial process 

not "dependent upon authorization from any outside source"). Koresko's 

discussion of ERISA remedies and limitations is not relevant to the validity of the 

Contempt Order, and this Court has already upheld the remedies under ERISA. 

Appellant's Br. 82-85; Sec'y U.S. Dep't of Labor v. Koresko, 646 Fed. App'x at 

245-46. 

CONCLUSION 

For the foregoing reasons, the Secretary respectfully requests that this Court 

affirm the orders of the district court. 

51 
 

 

 

Respectfully Submitted, 

 NICHOLAS C. GEALE 

 Acting Solicitor of Labor 

G. WILLIAM SCOTT 

Associate Solicitor for Plan Benefits Security 

 THOMAS TSO 

Counsel for Appellate and Special Litigation 

 /s Stephanie B. Bitto___________ 

 STEPHANIE B. BITTO 

 Trial Attorney 

U.S. Department of Labor 

Office of the Solicitor 

Plan Benefits Security Division 

200 Constitution Ave., N.W. 

Room N-4611 

Washington, D.C. 20210 

(202) 693-5616 

52 
CERTIFICATE OF COMPLIANCE 

I, Stephanie B. Bitto, hereby certify that this brief complies with the typevolume limitations of Fed. R. App. P. 27(d)(2)(A). This brief contains 12,839 

words, exclusive of the caption, tables, and certifications. This word count was 

provided by the Microsoft Word 2010 software program with which the brief was 

produced. 

Date: October 18, 2017 

 /s Stephanie B. Bitto___________ 

 STEPHANIE B. BITTO 
 

CERTIFICATION PURSUANT TO LAR 31.1 

I, Stephanie B. Bitto, hereby certify that the electronic version of this brief 

was scanned with McAfee Virus Scan Enterprise ver. 8.8 virus scanning software 

and was found to be free of any currently known viruses. 

I further certify that the text of this electronic version of this brief is identical 

to the paper copies to be filed. 

Date: October 18, 2017 

 /s Stephanie B. Bitto___________ 

 STEPHANIE B. BITTO 
 

CERTIFICATE OF SERVICE 

I, Stephanie B. Bitto, hereby certify that on this 18th day of October, I 

caused a true and correct copy of the foregoing written response to be filed 

electronically with the court using the CM/ECF filing system, and that an identical 

paper copy has also been sent to the following via first class mail, postage prepaid: 

JOHN J. KORESKO #67892-066 

PHILADELPHIA 

FEDERAL DETENTION CENTER 

700 Arch Street 

P.O. Box 562 

Philadelphia, PA 19105 

 /s Stephanie B. Bitto___________ 

 STEPHANIE B. BITTO