470 F.3d 434 Daniel E. CARPENTER, Plaintiff, Appellant, v. UNITED STATES DEPARTMENT OF JUSTICE, United States Attorney for the District of Massachusetts, Defendants, Appellees. No. 06-1489. United States Court of Appeals, First Circuit.
Heard October 4, 2006. Decided December 12, 2006. Malik W. Ghachem for appellant.
Peter D. Keisler, Assistant Attorney General, with whom Michael Sullivan, United States Attorney, Leonard Schaitman and Steve Frank, Attorneys, Appellate Staff, Civil Division, Department of Justice, were on brief for appellees.
Before LIPEZ, Circuit Judge, CYR, Senior Circuit Judge, and SINGAL,* District Judge.
SINGAL, District Judge.
Plaintiff, Daniel Carpenter ("Carpenter"), filed a Freedom of Information Act ("FOIA"), 5 U.S.C. § 552 (2006), request with the United States Attorney's Office ("USAO") for the District of Massachusetts 9 Because Carpenter has failed to establish a valid public interest in the disclosure of the requested documents and Exemption 7(C) protects the privacy interest of Koresko, we hold that Exemption 7(C) warrants that the requested documents be withheld in their entirety.
10 Because the lack of a public interest is determinative, we turn only briefly to Carpenter's additional arguments regarding the Vaughn index and segregation of exempt portions of the record.
C. The Vaughn Index and Segregation
11 To provide for the broadest possible disclosure and further the adversary process, courts often require the withholding agency to provide a "Vaughn" index.13 Church of Scientology Int'l, 30 F.3d at 228; Providence Journal Co., 981 F.2d at 556. Generally, a Vaughn index provides a broad description of the requested material or information, and the agency's reason for withholding each document or portion of a document. See Church of Scientology Int'l, 30 F.3d at 228. Nonetheless, a more detailed statement of the requested materials may not be necessary where the statement would reveal the very information sought to be protected. See Maynard, 986 F.2d at 557.
12 The Vaughn index provided to the plaintiff and the court in this case consisted of a declaration by John F. Boseker ("Boseker declaration"), an Attorney Adviser in the Executive Office for the United States Attorneys, United States Department of Justice. The Boseker declaration set forth the Government's Glomar response, asserted that the requested documents were not required to be disclosed under Exemption 7(C) and provided that there were no reasonably segregable portions of the materials. Because Carpenter failed to assert a cognizable public interest, the government was not obligated to provide additional detail. See id. Even if Carpenter had asserted a valid public interest, the appropriate method for a detailed evaluation of the competing interests would have been through an in camera review because a standard Vaughn index might result in disclosure of the very information that the government attempted to protect. Id. ("When, as here, the agency, for good reason, does not furnish publicly the kind of detail required for a satisfactory Vaughn index, a district court may review documents in camera.").
13 The FOIA further mandates that "any reasonably segregable portion of a record shall be provided to
FEBRUARY 18, 2015 Fiduciaries to Pay $39M for Raiding Death Benefit Plans; Outcry Over DOL Rule Continues Law firm Debevoise latest to complain about DOL fiduciary redraft, but AFR’s Stanley says concerns are ‘hypothetical scare stories’
The defendants were found to have improperly transferred money out of employee death benefit plans. The defendants were found to have improperly transferred money out of employee death benefit plans. Just as more complaints roll in regarding the Department of Labor’s planned release of revised fiduciary rules for retirement accounts, a federal district court in Philadelphia has ruled in favor of a DOL fiduciary breach suit brought in 2009, levying a $39.8 million judgment in the case.
After nearly six years of litigation, the court on Feb. 6 entered a $39.8 million judgment, protecting the rights of workers who participated in more than 400 death benefit plans mismanaged by lawyer John J. Koresko V and the companies he controlled, as well as a former associate, Jeanne Bonney.
MORE ON LEGAL & COMPLIANCE from The Advisor's Professional Library Updating Form ADV and Form U4 When it comes to disclosure on Form ADV, RIAs should assume information would be material to investors. When in doubt, RIAs should disclose information rather than arguing later with securities regulators that it was not material. Books and Records Rule Thorough and complete books and records enable RIAs to demonstrate that they have fulfilled their fiduciary obligations to clients and complied with applicable rules and regulations. The judge ruled that Koresko of Bridgeport, Pennsylvania, and other defendants diverted tens of millions of dollars in plan assets through more than 21 accounts using more than 18 different entities at more than eight different banks.
“Spanning more than 12 years, the scheme saw assets from the plans’ trusts, used for real estate purchases in South Carolina and the Caribbean island of Nevis, to pay outside attorneys, lobbying expenses, operational expenses of Penn-Mont Benefit Services Inc., and Koresko’s law firms, and for Koresko’s personal expenses, such as boat rentals and utilities,” the order states.
“The defendants completely disregarded the duty of loyalty they owed to the employee benefit plans and the workers who rely on them,” said Phyllis Borzi, Assistant Secretary of Labor for Employee Benefits Security, in a statement. “In an ideal world, this does not happen. When it does, there is justice in undoing this massive fraud, and in banning the defendants from coming anywhere near employee benefits again.”
The plans primarily provided death benefits to participants nationwide and were established in connection with Koresko’s Regional Employers’ Assurance Leagues Voluntary Employees’ Beneficiary Association and Single Employer Welfare Benefit Plan, the order states.
The court found that Koresko and the following defendants, all fiduciaries, transferred plan assets out of the plans’ trusts, in violation of the Employee Retirement Income Security Act:
Penn-Mont Benefit Services, Inc., of Bridgeport, which is owned by Koresko; Koresko’s current and former law firms; Jeanne Bonney, an attorney formerly associated with the law firms; and Penn Public Trust, a company controlled by Koresko. Nearly $20 million of the amount due to the plans is frozen in accounts under the control of an independent fiduciary, after a July 2013 court order. The Feb. 6 decision found the defendants, with the exception of Bonney, liable for $19,852,114 in restitution for losses and disgorgement of profits, which represents the remaining balance of the total diverted assets.
The DOL’s redraft of its rule to amend the definition of fiduciary under ERISA is expected to be filed at the Office of Management and Budget for a 90-day review an
470 F.3d 434
ReplyDeleteDaniel E. CARPENTER, Plaintiff, Appellant,
v.
UNITED STATES DEPARTMENT OF JUSTICE, United States Attorney for the District of Massachusetts, Defendants, Appellees.
No. 06-1489.
United States Court of Appeals, First Circuit.
Heard October 4, 2006.
Decided December 12, 2006.
Malik W. Ghachem for appellant.
Peter D. Keisler, Assistant Attorney General, with whom Michael Sullivan, United States Attorney, Leonard Schaitman and Steve Frank, Attorneys, Appellate Staff, Civil Division, Department of Justice, were on brief for appellees.
Before LIPEZ, Circuit Judge, CYR, Senior Circuit Judge, and SINGAL,* District Judge.
SINGAL, District Judge.
Plaintiff, Daniel Carpenter ("Carpenter"), filed a Freedom of Information Act ("FOIA"), 5 U.S.C. § 552 (2006), request with the United States Attorney's Office ("USAO") for the District of Massachusetts
9
Because Carpenter has failed to establish a valid public interest in the disclosure of the requested documents and Exemption 7(C) protects the privacy interest of Koresko, we hold that Exemption 7(C) warrants that the requested documents be withheld in their entirety.
10
Because the lack of a public interest is determinative, we turn only briefly to Carpenter's additional arguments regarding the Vaughn index and segregation of exempt portions of the record.
C. The Vaughn Index and Segregation
11
To provide for the broadest possible disclosure and further the adversary process, courts often require the withholding agency to provide a "Vaughn" index.13 Church of Scientology Int'l, 30 F.3d at 228; Providence Journal Co., 981 F.2d at 556. Generally, a Vaughn index provides a broad description of the requested material or information, and the agency's reason for withholding each document or portion of a document. See Church of Scientology Int'l, 30 F.3d at 228. Nonetheless, a more detailed statement of the requested materials may not be necessary where the statement would reveal the very information sought to be protected. See Maynard, 986 F.2d at 557.
12
The Vaughn index provided to the plaintiff and the court in this case consisted of a declaration by John F. Boseker ("Boseker declaration"), an Attorney Adviser in the Executive Office for the United States Attorneys, United States Department of Justice. The Boseker declaration set forth the Government's Glomar response, asserted that the requested documents were not required to be disclosed under Exemption 7(C) and provided that there were no reasonably segregable portions of the materials. Because Carpenter failed to assert a cognizable public interest, the government was not obligated to provide additional detail. See id. Even if Carpenter had asserted a valid public interest, the appropriate method for a detailed evaluation of the competing interests would have been through an in camera review because a standard Vaughn index might result in disclosure of the very information that the government attempted to protect. Id. ("When, as here, the agency, for good reason, does not furnish publicly the kind of detail required for a satisfactory Vaughn index, a district court may review documents in camera.").
13
The FOIA further mandates that "any reasonably segregable portion of a record shall be provided to
FEBRUARY 18, 2015
ReplyDeleteFiduciaries to Pay $39M for Raiding Death Benefit Plans; Outcry Over DOL Rule Continues
Law firm Debevoise latest to complain about DOL fiduciary redraft, but AFR’s Stanley says concerns are ‘hypothetical scare stories’
The defendants were found to have improperly transferred money out of employee death benefit plans.
The defendants were found to have improperly transferred money out of employee death benefit plans.
Just as more complaints roll in regarding the Department of Labor’s planned release of revised fiduciary rules for retirement accounts, a federal district court in Philadelphia has ruled in favor of a DOL fiduciary breach suit brought in 2009, levying a $39.8 million judgment in the case.
After nearly six years of litigation, the court on Feb. 6 entered a $39.8 million judgment, protecting the rights of workers who participated in more than 400 death benefit plans mismanaged by lawyer John J. Koresko V and the companies he controlled, as well as a former associate, Jeanne Bonney.
MORE ON LEGAL & COMPLIANCE
from The Advisor's Professional Library
Updating Form ADV and Form U4
When it comes to disclosure on Form ADV, RIAs should assume information would be material to investors. When in doubt, RIAs should disclose information rather than arguing later with securities regulators that it was not material.
Books and Records Rule
Thorough and complete books and records enable RIAs to demonstrate that they have fulfilled their fiduciary obligations to clients and complied with applicable rules and regulations.
The judge ruled that Koresko of Bridgeport, Pennsylvania, and other defendants diverted tens of millions of dollars in plan assets through more than 21 accounts using more than 18 different entities at more than eight different banks.
“Spanning more than 12 years, the scheme saw assets from the plans’ trusts, used for real estate purchases in South Carolina and the Caribbean island of Nevis, to pay outside attorneys, lobbying expenses, operational expenses of Penn-Mont Benefit Services Inc., and Koresko’s law firms, and for Koresko’s personal expenses, such as boat rentals and utilities,” the order states.
“The defendants completely disregarded the duty of loyalty they owed to the employee benefit plans and the workers who rely on them,” said Phyllis Borzi, Assistant Secretary of Labor for Employee Benefits Security, in a statement. “In an ideal world, this does not happen. When it does, there is justice in undoing this massive fraud, and in banning the defendants from coming anywhere near employee benefits again.”
The plans primarily provided death benefits to participants nationwide and were established in connection with Koresko’s Regional Employers’ Assurance Leagues Voluntary Employees’ Beneficiary Association and Single Employer Welfare Benefit Plan, the order states.
The court found that Koresko and the following defendants, all fiduciaries, transferred plan assets out of the plans’ trusts, in violation of the Employee Retirement Income Security Act:
Penn-Mont Benefit Services, Inc., of Bridgeport, which is owned by Koresko;
Koresko’s current and former law firms;
Jeanne Bonney, an attorney formerly associated with the law firms; and
Penn Public Trust, a company controlled by Koresko.
Nearly $20 million of the amount due to the plans is frozen in accounts under the control of an independent fiduciary, after a July 2013 court order. The Feb. 6 decision found the defendants, with the exception of Bonney, liable for $19,852,114 in restitution for losses and disgorgement of profits, which represents the remaining balance of the total diverted assets.
The DOL’s redraft of its rule to amend the definition of fiduciary under ERISA is expected to be filed at the Office of Management and Budget for a 90-day review an