U.S. v. S & Vee Cartage Co., Inc.

• Decision Date: 14 April 1983
• Docket Number: No. 81-1801,81-1801
• Citation: 704 F.2d 914
• Parties: 4 Employee Benefits Ca 1361 UNITED STATES of America, Plaintiff-Appellee, v. S & VEE CARTAGE COMPANY, INC., Silverio Vitello aka Sal Vitello, and Anna Vitello, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 914

704 F.2d 914

4 Employee Benefits Ca 1361

UNITED STATES of America, Plaintiff-Appellee, v. S & VEE CARTAGE COMPANY, INC., Silverio Vitello aka Sal

Vitello, and Anna Vitello, Defendants-Appellants.

No. 81-1801.

United States Court of Appeals, Sixth Circuit.

Argued Jan. 31, 1983.

Decided April 14, 1983.

David F. DuMouchel (argued), Detroit, Mich., for defendants-appellants.

Leonard R. Gilman, U.S. Atty., Walter Kozar (argued), Detroit, Mich., for plaintiff-appellee.

Before LIVELY, Circuit Judge, and PHILLIPS and BROWN, Senior Circuit Judges.

PHILLIPS, Senior Circuit Judge.

Defendants S & Vee Cartage Company, Inc., Silverio Vitello and Mrs. Anna Vitello appeal from jury convictions on charges of knowingly making false statements in documents required to be kept by employee welfare and pension funds (18 U.S.C. Secs. 1027 and 2 (1976)); conspiracy to make false statements in these documents (18 U.S.C. Sec. 371 (1976); and mail fraud (18 U.S.C. Sec. 1341 (1976). The principal issue raised on appeal is whether 18 U.S.C. Sec. 1027 was intended by Congress to cover employers. Other contentions are that the District Court improperly instructed the jury as to the mens rea required to violate 18 U.S.C. Sec. 1027; that a corporation may not be convicted of conspiring with its officers; and that there was insufficient evidence to sustain the conviction of defendant Silverio Vitello. We find all of appellants' arguments to be without merit and affirm their convictions.

I

S & Vee Cartage Company (S & Vee) is a steelhauling business located in Detroit and Warren, Michigan. Defendant Silverio Vitello is the president, treasurer and chief operating officer of the company. His wife, Mrs. Anna Vitello, is the sole shareholder, the vice president and the secretary of the company. The corporation has no other officers or directors.

In 1973, S & Vee became a party to certain collective bargaining agreements with Locals 299 and 124 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Pursuant to these agreements, S & Vee was required to make contributions for all its regular employees to the Central States Southeast and Southwest Areas Pension Fund (Pension Fund), and the Michigan Conference of Teamsters Welfare Fund (Welfare Fund). The mechanism by which S & Vee was required to report its eligible employees and the amount of contributions due the Pension Fund was the Employee Billing Changes and Corrections forms (EBCC forms). S & Vee was required to complete and send these forms to the Pension Fund each time there was a material change in the status of its employees. A similar mechanism was used for reporting to the Welfare Fund. S & Vee was required to complete and send to the Welfare Fund Monthly Contribution Reports (MCRs).

The evidence presented at the trial showed, to the satisfaction of the jury, that the defendants-appellants conspired to devise, and carried out, a scheme to defraud the Pension Fund, the Welfare Fund and its employees of contributions owed by S & Vee to these funds. Specifically, defendants S & Vee and Anna Vitello falsified a November 6, 1978, EBCC form sent to the Pension Fund by understating the number of its eligible employees. During 1979, defendant S & Vee falsified six MCRs that were sent to the Welfare Fund by understating again the number of eligible employees, understating the amount of contributions due, and naming two individuals as eligible employees when they were not eligible. In addition, all three defendants falsified an August 6, 1979, form which ultimately was sent to the Pension Fund by understating the number of eligible employees and by listing, as terminated, employees who were added after a March 1979 Pension Fund audit of S & Vee and who remained active and eligible beyond August 6, 1979.

After the jury verdicts, the District Court fined S & V a total of $25,000. Mr. and Mrs. Vitello each were sentenced to a total of two years imprisonment, and fined $10,000 and $11,000 respectively.

II

The question concerning whether 18 U.S.C. Sec. 1027 covers employers appears to be one of first impression. The statute provides as follows:

Whoever, in any document required by title I of the Employee Retirement Income Security Act of 1974 (as amended from time to time) to be published, or kept as part of the records of any employee welfare benefit plan or employee pension benefit plan, or certified to the administrator of any such plan, makes any false statement or representation of fact, knowing it to be false, or knowingly conceals, covers up, or fails to disclose any fact the disclosure of which is required by such title or is necessary to verify, explain, clarify or check for accuracy and completeness any report required by such title to be published or any information required by such title to be certified, shall be fined not more than $10,000, or imprisoned not more than five years, or both. (Emphasis supplied.) 18 U.S.C. Sec. 1027 (1976).

Appellants contend that they, as employers, are not covered by this section because Congress intended it to cover only fiduciaries of employee welfare and pension funds, and also because the forms and reports sent by them to the funds involved in the present case are not the types of documents referred to in the statute. Relying first on the legislative history behind Sec. 1027 and the acts it was designed to enforce, appellants note the frequent references to welfare and pension plan fiduciaries and the concern expressed for dealing with abuses in the administration of these types of funds. See H.R.Rep. 93-533, 93rd Cong., 2nd Sess., reprinted in 1974 U.S.Code Cong. & Ad.News 4639, 4639-43; H.R.Rep. 998, 87th Cong., 2nd Sess. reprinted in 1962 U.S.Code Cong. & Ad.News 1532, 1532-51; S.Rep. No. 1440, 85th Cong., 2nd Sess. reprinted in 1958 U.S.Code Cong. & Ad.News 4137-47. Second, they focus on the fact that the few reported cases involving prosecutions brought under Sec. 1027 have dealt with fiduciaries of employee benefit funds. See United States v. Tolkow, 532 F.2d 853 (2nd Cir.1976); United States v. Santiago, 528 F.2d 1130 (2d Cir.), cert. denied, 425 U.S. 972, 96 S.Ct. 2169, 48 L.Ed.2d 795 (1976); United States v. McCrae, 344 F.Supp. 942 (E.D.Pa.1972). Third, with respect to the types of documents involved, they point out that the statute refers to false statements made in documents required "to be published, or kept as part of the records of any employee welfare benefit plan or employee pension benefit plan, or certified to the administrator of any such plan...." EBCC forms and MCRs, they contend, do not fall into any of these categories.

We find the arguments of appellants to be unimpressive. The statute, 18 U.S.C. Sec. 1027, provides in broad language, unequivocally and without limitation, that "[w]hoever" knowingly makes any false statement or conceals facts in any documents required by Title I of the Employee Retirement Income Security Act of 1974 (E.R.I.S.A.) to be published, or kept by an employee benefit plan or certified to the administrator of any such plan, may be held criminally culpable. No differentiation is made between an employer or a fiduciary of an employee benefit or welfare fund.

The rule of statutory construction in such a situation was stated by the Supreme Court in United States v. Turkette, 452 U.S. 576, 580, 101 S.Ct. 2524, 2527, 69 L.Ed.2d 246 (1981):

In determining the scope of a statute, we look first to its language. If the statutory language is unambiguous, in the absence of "a clearly expressed legislative intent to the contrary, that language must ordinarily be regarded as conclusive." Consumer Product Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980).

"Whoever" clearly is sufficiently broad to include employers as well as fiduciaries. We conclude that appellants, as an "employer," are included within the provisions of Sec. 1027.

The only relevant limitation found in Sec. 1027 deals with the type of documents containing false statements. Although EBCC reports and MCRs are not required "to be published" or "certified to an administrator" of an employee benefit plan, the evidence establishes that they are covered by Sec. 1027 because they are required "to be kept" under Sec. 107 of E.R.I.S.A., 29 U.S.C. Sec. 1027 (1976).

29 U.S.C. Sec. 1027, entitled "Retention of Records," provides as follows:

Every person subject to a requirement to file any description or report or to certify any information therefor under this subchapter or who would be subject to such a requirement but for an exemption or simplified reporting requirement under section 1024(a)(2) or (3) of this title shall maintain records on the matters of which disclosure is required which will provide in sufficient detail the necessary basic information and data from which the documents thus required may be verified, explained, or clarified, and checked for accuracy and completeness, and shall include vouchers, worksheets, receipts, and applicable resolutions, and shall keep such records available for examination for a period of not less than six years after the filing date of the documents based on the information which they contain, or .... 29 U.S.C. Sec. 1027 (1976).

The EBCC forms and MCRs must be retained under this section because they contain the necessary information and data from which annual reports, required under 29 U.S.C. Secs. 1023(a)(2)(A) and 1024(a) (1976) to be published and sent by the administrator of a fund to the Secretary of Labor, "may be verified, explained, or clarified, and checked for accuracy and completeness...." The evidence shows that these documents constitute the primary source, if not the sole source, available to trustees of pension and welfare funds with respect to the names of the employees covered and the amount of contributions made by employers.

A federal regulation, 29 C.F.R. Sec. 486(3)(c) (1982)...