Opinion ID: 747836
Heading Depth: 2
Heading Rank: 2

Heading: Union Property

Text: 17 LaBarbara next argues that his conviction for embezzlement of union property under 29 U.S.C. § 501(c) should be reversed because the union headquarters he caused to be mortgaged was not owned by the union. 2 LaBarbara did not raise this argument in the district court and bases a claim of constitutionally ineffective assistance of counsel on this omission. 18 LaBarbara's argument is wholly frivolous. The unchallenged testimony at trial was that Local 66 owned the Building Corporation, which was only a shell intended to shield the union from liability. By mortgaging the assets of the Building Corporation to enrich himself and his family, LaBarbara clearly diverted assets--the value of the building and therefore the value of the Building Corporation--to himself in violation of Section 501(c). 19 LaBarbara's argument to the contrary rests on a misreading of Reich v. Compton, 57 F.3d 270 (3d Cir.1995). The court in Compton held that ERISA's prohibitions against certain indirect transactions between a plan and a party in interest under Section 406(a)(1) of ERISA, 29 U.S.C. § 1106(a)(1), do not automatically prohibit transactions between a plan and an alter ego of a party in interest. 57 F.3d at 278. Unlike the instant case, Compton was concerned with alter egos of a party in interest, not alter egos of an entity to which the defendant owes a fiduciary duty. More importantly, Compton is about 29 U.S.C. § 1106(a)(1), not about Section 501(c). The fact that ERISA's prohibitions against certain indirect transactions have been held not to apply automatically to alter egos of parties in interest under 29 U.S.C. § 1106(a)(1) hardly leads to the conclusion that a union official can embezzle from an alter ego of the union without running afoul of 29 U.S.C. § 501(c).