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Trustee Faces Prison For Accepting Motorcycle

When an ERISA fiduciary accepts a gratuity from a plan’s consultant or other service-provider, he not only breaches his fiduciary duty under ERISA, he also commits a federal crime. Under the federal criminal code, it is illegal to give or accept bribes in connection with the operation of an ERISA plan. A recent case in Rockford, Illinois, shows that federal prosecutors take this law seriously. When an ERISA fiduciary accepts a gratuity from a plan’s consultant or other service-provider, he not only breaches his fiduciary duty under ERISA, he also commits a federal crime. Under the federal criminal code, it is illegal to give or accept bribes in connection with the operation of an ERISA plan. A recent case in Rockford, Illinois, shows that federal prosecutors take this law seriously.

The case, U.S. v. Schreier, involved a trustee of a multiemployer pension plan. He pled guilty to accepting a $19,000 Harley-Davidson motorcycle from the plan’s consultant in return for certain actions he had taken in his capacity as trustee. He now faces the prospect of up to three years in prison and a fine of up to $250,000.

Though the facts in this case may be somewhat unusual, the case does serve as a reminder that ERISA fiduciaries must take seriously their obligation to act solely in the interest of plan participants and beneficiaries. Certainly, accepting a gratuity in any significant amount runs contrary to that obligation. When in doubt, the safer course of action is always to decline an offered gratuity — no matter how well-intentioned on the part of a plan’s service-provider.