Opinion ID: 3191566
Heading Depth: 1
Heading Rank: 1

Heading: introduction

Text: Since we write only for the benefit of the parties, we set forth only those facts necessary to inform our analysis.2 This appeal arises out of a suit brought in March 2009 1 Koresko’s arguments on appeal do not discuss each of these rulings. To the extent Koresko has not discussed why a particular ruling was improper, we deem him to have abandoned and waived the issue on appeal. See Kost v. Kozakiewicz, 1 F.3d 176, 182 (3d Cir. 1993). 2 by the Secretary against Koresko and several entities he controls in connection with a multi-employer employee death benefit program. (App. 1184–88). Koresko and his brother Lawrence Koresko ran an “unincorporated association of unrelated employers called the Regional Employers Assurance Leagues” (“REAL,” “League”), which offered employee welfare benefit plans, including death benefit plans, to employers through the REAL Voluntary Employees’ Beneficiary Association (“REAL VEBA”) Trust. (Id. at 8).3 Participating employers executed an adoption agreement in order to join the League and subscribe to the trusts. (Id. at 9); see, e.g., (id. at 465).4 In joining the League, employers agreed to be bound by the governing documents including the Master Trust Agreement, Plan Document, and their individual adoption agreement. (Id. at 9–10). PennMont Benefit Services, Inc. (“PennMont”) was the administrator of the plans; Koresko is the president and CEO of PennMont. (Id. at 11, 138). Employers who joined the League could select the type and amount of benefits to offer and set eligibility requirements for employees. (Id. at 9). Eligible employees of adopting employers could 2 The District Court conducted an extensive review of this case in granting the Secretary partial summary judgment and in its opinion following a bench trial against Koresko. (App. 8–22, 97–251). 3 This case also involves the Single Employer Welfare Benefit Plan Trust (“SEWBPT”), which Appellant acknowledges is essentially identical to the REAL VEBA Trust. (App. 139); (Appellant’s Br. 7 n.1) (“The operative documents of the Trusts are essentially identical, as are their structural arrangements.”). Our explanation of the REAL VEBA Trust applies to the SEWBPT as well. The REAL VEBA Trust and SEWBPT are referred to collectively as “trusts.” 4 The participating employers’ individual employee welfare benefit plans are referred to herein as “plans.” The employers who joined the League and executed adoption agreements are referred to as “adopting employers.” 3 then participate in the benefit program. (Id.). The trusts consisted of employer contributions, which the adoption agreements require, and life insurance policies taken out on the lives of participating employees to fund the benefits. (Id.). Benefits were then paid according the adopting employers’ individual adoption agreement and the governing documents for the trust. (Id. at 9–10). The suit brought by the Secretary was against Koresko, several companies he owned, the trusts, an employee of Koresko, and the trustees. (Id. at 1185–88). The Secretary alleged a breach of fiduciary duties with respect to many individual employee welfare benefit plans. (Id. at 1195–202). In August 2012, the U.S. District Court for the Eastern District of Pennsylvania (McLaughlin, J.), granted the Secretary partial summary judgment with respect to three specific plans. (Id. at 81–82). The Court proceeded to remove Koresko from his positions of authority with respect to the trusts, and appointed a temporary independent fiduciary to administer the plans and trusts in September 2013. (Id. at 1448–455). The District Court then conducted a three-day bench trial that concerned additional employee welfare benefit plans. This resulted in a memorandum opinion in February 2015 that detailed Koresko’s violations of ERISA. (Id. at 97–322).5 The Court found that at least 419 employee welfare benefit plans were ERISA-covered plans. (Id. at 156, 257).6 The Court entered judgment in accordance with this opinion in 5 The nature of Koresko’s breach of fiduciary duties is not at issue on appeal, therefore we will not discuss the extent of his ERISA violations. 6 As discussed infra, under federal regulations, employee welfare benefit plans in which there are no non-owner employees are exempt from ERISA coverage. 29 C.F.R. § 2510.3-3(b). Therefore, this calculation is based on the number of plans the District Court 4 March 2015, ordering the permanent removal of the fiduciaries. (Id. at 323–28). The Court also ordered Koresko to pay restitution and disgorgement of the remaining diverted assets. (Id. at 323). Koresko’s motion for a new trial was denied by the Court in May 2015. (Id. at 329). Koresko timely appealed. (Id. at 1).7 After Koresko appealed the Court’s March 2015 order, the Court issued an order on August 4, 2015 appointing a permanent independent fiduciary. (Id. at 1621–22). In addition to appointing a permanent independent fiduciary, the Court required that Koresko bear the costs of the fiduciary’s appointment. (Id. at 1631). The Court stated: “[h]ad the Koresko Defendants complied with their fiduciary duties, there would be no need to appoint an Independent Trustee in this case.” (Id.). The costs of the appointment would initially be paid from trust assets. (Id.). The Court retained jurisdiction in order to enforce the order and explained that it would “issue a separate order specifying the total amount the Koresko Defendants are liable to the Plans to restore on account of this appointment.” (Id.). Appellant also appeals this order. (Id. at 1616).