Perez v. Koresko (86 F. Supp. 3d 293, 2015)

MEMORANDUM

McLAUGHLIN, District Judge.

TABLE OF CONTENTS

I. Procedural History. .300

A. Administrative Enforcement Proceedings.300

B. Initial Complaint .301

C. Motion for Summary Judgment. 302

D. Supplemental Complaint.303

E. Motion for Temporary Restraining Order and Preliminary Injunction.304

F. September 16 Hearing and Appointment of the Independent Fiduciary.307

G. Discovery and Contempt Proceedings .307

H. IF Reports ...310

I. Jeanne Bonney.310

J. Pretrial Proceedings.311

K. Trial.312

L. Posh-Trial.312

II. Findings of Fact.

A. The Defendants and Their Relationships to One Another.

B. The Trustees and the Plan Administrator.

C. Participating Employers in the REAL VEBA or SEWBP Trust

D. Transfers from the Trust.•.

E. Establishment of “Death Benefit” Accounts.

F. Depositing Death Benefit Proceeds into KLF’s Account.

G. Transfer of Death Benefit Proceeds into a Second Account_

H. Transfer of Death Benefit Proceeds to Nevis and to KLF.

I. Loans on Insurance Policies ..

J. Transfer of Loan Proceeds into Mr. Koresko’s Escrow Account .

K. Transfer of Death Benefit and Loan Proceeds to an IOLTA Account

L. Transfer of Funds to Nevis .

M. Transfer of Death Benefit and Loan Proceeds to the Pershing Account

N. The Creation and Use of the 1187 Account.

O. Deposit of Plan Assets into the 1195 Account and the Subsequent Transfer of Those Assets. 05 CO

P. The Creation and Use of the 1146 Account. H CO

Q. The Creation and Use of the 1112 Account. (M CO

R. The Creation and Use of the Penn Public Trust, Inc., SPC, Account ^ CO

S. The Creation and Use of an Account in the Name of CTC, the Former Trustee. LO CO

T. Depositing of Plan Assets into a Separate Account After the Court’s Freeze Orders and After the Installation of the IF. ÍO CO

U. Transfer of Moneys from Employers to the 8384 Account. 05 CD CO

V. Depositing of Plan Assets into Yet Another Account, After the Court Instructed to Return Loan Proceeds . o CO

W. Total Amount of Diverted Plan Assets at Issue . 1-1 t> CO

III. Conclusions of Law . co

A. ERISA Coverage. Co

B. Fiduciary Status. Co

C. ERISA Fiduciary Duties . CO

D. Relief. CO

1. Removal as Fiduciaries... CO

2. Restitution and Disgorgement. CO

3. Prejudgment Interest. CO

This action arises out of alleged violations of fiduciary duties under the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., in connection with a multiple-employer employee death benefit arrangement. The Secretary of Labor (“the Secretary” or “DOL”) brought this suit against the Koresko Defendants, Jeanne Bonney, Community Trust Company, the Regional Employers Assurance Leagues Voluntary Employees’ Beneficiary Association Trust (“REAL VEBA Trust”), and the Single Employer Welfare Benefit Plan Trust (“SEWBPT”) (together, • “the Trusts”). The Secretary alleges that the defendants have violated Sections 403, 404, and 406 of ERISA, 29 U.S.C. §§ 1103,1104, and 1106. The Secretary also seeks to find certain parties liable for co-fiduciary liability under Section 405 of ERISA, 29 U.S.C. § 1105.

The Secretary requests a permanent injunction against the Koresko Defendants and Jeanne Bonney, barring each of them from serving as a trustee or fiduciary, or as a representative in any capacity, to any employee benefit plan. The Secretary also seeks a permanent injunction against those defendants from serving in any capacity that involves decisionmaking authority or custody or control of the assets of any employee benefit plan. Finally, the Secretary seeks over fifty million dollars in restitution and disgorgement to the Trusts.

The Court held a three-day bench trial on June 9 through June 11, 2014. The Court had previously granted the Secretary’s motion for partial summary judgment on August 3, 2012, and the Court incorporates that decision into this memorandum. Solis v. Koresko, 884 F.Supp.2d 261 (E.D.Pa.2012). This memorandum and the Court’s earlier decision on partial summary judgment comprise the Court’s findings of fact and conclusions of law. The Court finds for the Secretary on all claims.

The Court concludes that the plans at issue are employee welfare benefit plans as defined by ERISA; that the plans have plan assets in the form of employee contributions, insurance policy proceeds, and earnings therefrom; and that the defendants are ERISA fiduciaries with respect to those plan assets.

The Secretary presented voluminous evidence of many violations of ERISA by the defendants, including: (1) the diversion of tens of millions of dollars of plan assets through more than 21 accounts in the names of more than 18 different entities (all the creation of Mr. Koresko) at 8 or more different banks; (2) the transfer of millions of dollars of plan assets into accounts which only Mr. Koresko controlled and which were out of the reach of the Trustee; (3) the taking out of over $35 million in loans on the Trusts’ insurance policies, and the transfer of the resulting monies to accounts which only Mr. Kores-ko controlled and which were out of the reach of the Trustee; (4) the creation and subsequent depositing of plan assets into various IOLTA accounts and accounts in Mr. Koresko’s personal name; (5) the transfer of millions of dollars of plan assets to law firms and consulting firms, from which neither the plans nor the beneficiaries benefitted, and only the defendants benefitted; (6) the use of death benefit proceeds to purchase property in the Caribbean island of Nevis and in South Carolina in Mr. Koresko’s personal name; (7) the use of plan assets to pay Mr. Koresko’s expenses, including utility bills and boat rentals; and (8) the use of plan assets to pay the defendants directly.

The Court, therefore, removes the defendants from any position of fiduciary authority and permanently bars the defendants from ever serving as fiduciaries or service providers to ERISA-covered plans. The Court also finds the Koresko Defendants liable for $19,852,114.88 in restitution for losses and disgorgement of profits.

Although the Court grants a permanent injunction against Ms. Bonney and finds that she did violate her fiduciary obligations, the Court will not order restitution or disgorgement from Ms. Bonney. Ms. Bonney did not personally benefit from the diversion or mishandling of the plan assets and acted only under the direction of Mr. Koresko. She therefore cannot be found financially liable. In addition, Ms. Bonney was seriously ill during most of the litigation and was represented primarily by Mr. Koresko — who the Court ultimately found had a non-waivable conflict of interest with respect to that representation.

I. Procedural History

A. Administrative Enforcement Proceedings

The Secretary issued subpoenas to Mr. Koresko and certain of the Koresko Defendants in 2004 in connection with an investigation into possible ERISA violations. The Secretary then filed two administrative enforcement actions related to those subpoenas, each of which were assigned to me: Chao v. Koresko, No. 04-mc-74 (E.D.Pa. filed Apr. 19, 2004), and Chao v. Koresko, No. 06-mc-192 (E.D. Pa. filed Oct. 12, 2006). In the first Chao ease, the Court granted the DOL’s petition on August 23, 2004, to enforce the subpoenas. The Third Circuit subsequently affirmed the Court’s orders. Because Mr. Koresko refused to comply with the subpoenas, the Court ordered him to be incarcerated until he - produced the documents requested. The day before he was to be put in jail, Mr. Koresko complied with the subpoenas.

The second administrative enforcement proceeding was based on new subpoenas issued by the DOL in 2006. The Court ordered enforcement for five of the six categories of requested documents on December 8, 2008. In an April 26, 2010, non-precedential opinion, the Third Circuit affirmed orders in both the '04 and '06 Chao cases and recommended that “all of the Koresko litigation be assigned to one district judge.” Opinion at 4, Secretary of Labor v. Koresko, 377 Fed.Appx. 238, 240 (3d Cir.2010).

B. Initial Complaint

While appeals from decisions in the administrative enforcement actions were pending, the Secretary instituted this civil suit against the Koresko Defendants on March 6, 2009. The Secretary also sued Jeanne Bonney and Community Trust Company, and it named the Trusts as defendants. This case was initially assigned to the Honorable C. Darnell Jones,. II.

Within days of the filing of the complaint, the Koresko Defendants, Ms. Bon-ney, and the Trusts filed emergency motions, requesting that the case be placed under seal and other injunctive relief, in response to a press release issued by the Secretary (Docket Nos. 6, 7). The Court concluded that the moving defendants did not meet their burden to justify a seal of the record in this case. Furthermore, the Court declined to enter injunctive relief because the defendants had not filed any responsive pleadings (Docket No. 15). The Court also denied a motion for reconsideration of that order (Docket No. 22). The defendants appealed, and that decision was affirmed by the Third Circuit on April 28, 2010, in a second non-precedential opinion. Opinion, Secretary of Labor v. Koresko, 378 Fed.Appx. 152 (3d Cir.2010).

On July 14, 2009, the Secretary filed an application for a temporary restraining order (“TRO”) and preliminary injunction (Docket No. 63). The Secretary sought an order prohibiting the Koresko Defendants from removing F & M Trust as trustee and from directing the transfer of any trust assets to themselves. Judge Jones held a TRO hearing on July 17, 2009, during which he denied the TRO request (Docket Nos. 71, 75). Prior to the TRO hearing, the defendants filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) (Docket No. 69). Judge Jones denied that motion in its entirety on August 31, 2009, 2009 WL 2776630 (Docket Nos. 107,108).

Judge Jones held a preliminary injunction hearing on September 2 and 3, 2009, and on October 6, 2009. On January 15, 2010, the Court denied without prejudice the Secretary’s motion for a preliminary injunction because “the DOL has not made the significantly high required showing to succeed in securing injunctive relief at this stage.” Order at 2 (Docket No. 195). The Court also permitted transfer of the corpus of the Trusts to Penn Public Trust, which became the sole trustee.

At the defendants’ request, on March 17, 2010, the Court stayed this case for sixty days due to Ms. Bonney’s serious medical condition (Docket No. 210).

On May 3, 2010, as a result of the Third Circuit’s recommendation that all of the Koresko litigation be assigned to one judge, then-Chief Judge Bartle reassigned the DOL’s civil case to me (Docket No. 213), along with several other cases involving Mr. Koresko and the Trusts.

On December 10, 2010, the Court placed this action in suspense for sixty days for the. parties to pursue settlement. (Docket No. 244). In February 2011, the parties filed status reports indicating that settlement talks continued. At that time, the DOL stated that it would request that the cases be removed from civil suspense if no progress was made (Docket No. 252). The Court removed the case from suspense in January 2012 and held a status conference on February 10, 2012 (Docket No. 260). The Court issued a scheduling order on February 13, 2012.

C. Motion for Summary Judgment

On February 28, 2012, the Secretary filed a motion for partial summary judgment (Docket Nos. 267-269). The Secretary sought to prove ERISA violations by Mr. Koresko, Ms. Bonney, PennMont, Ko-resko Law Firm, and Koresko & Associates with regard .to three of the employee welfare benefit plans participating in the Trusts.

The Court issued a decision on August 3, 2012', granting partial summary judgment in favor of the DOL (Docket Nos. 314, 315). The Court concluded that Mr. Ko-resko, Ms. Bonney, and PennMont had violated Sections 403, 404, and 406 of ERISA as to certain employee welfare benefit plans participating in the REAL VEBA Trust. Although the Court deferred its decision on the relief requested by the Secretary, it stated that it would consider a request for narrower, more limited injunctive relief.

The Court also made the following conclusions that are relevant to this decision. First, although the master REAL VEBA Trust is not an employee welfare benefit plan, the Domenic M. Castellano, D.D.S., P.A. Plan, the Cetylite Industries, Inc. Plan, and the Décor Coordinates, Inc. Plan are employee welfare benefit plans under ERISA. Solis v. Koresko, 884 F.Supp.2d 261, 274 (E.D.Pa.2012), appeal dismissed (Aug. 19, 2013). ERISA fiduciary responsibility provisions applied to the Cetylite, Décor, and Castellano plans, and those plans had “plan assets” to which ERISA fiduciary responsibilities could attach. Id. at 285. The Court also ruled that the July 29, 2009, Amendment to the REAL VEBA Plan Document, which purported to eliminate non-owner employees (“NOEs”) from the arrangement altogether, was invalid. Id. at 280.

In addition, the Court made several conclusions as to liability, not just to the structure of the REAL VEBA arrangement. First, the Court concluded that PennMont, Mr. Koresko, and Ms. Bonney are fiduciaries of the three plans at issue, and they each violated their fiduciary duties under Section 403(a) of ERISA by holding assets of the three plans even though they were not trustees of those plans. Id. at 290, 292. Furthermore, the Court held that those three defendants violated the fiduciary duty of loyalty and duty of care under Section 404(a)(1) of ERISA by directing or permitting plan assets to be diverted into accounts subject to their sole control. Id. at 294.

Lastly, the Court also held that Penn-Mont, Mr. Koresko, and Ms. Bonney violated Section 406(b)(1) of ERISA as to the Cetylite plan. Section 406 prohibits fiduciaries from engaging in transactions that involve a transfer of plan assets to a party in interest. The Court concluded that, as fiduciaries, PennMont, Mr. Koresko, and Ms. Bonney were parties in interest as defined by ERISA. PennMont directed that certain insurance proceeds related to the Cetylite plan be transferred to an account held in the name of Ms. Bonney and Mr. Koresko. Id. at 295-97.

D. Supplemental Complaint

As discovery progressed in this case, the Secretary filed a supplemental complaint on November 8, 2012 (Docket No. 349). Although the Secretary did not change his request for relief, the Secretary added new claims against Mr. Koresko and Penn Pufilic Trust as well as new allegations of co-fiduciary liability against Mr. Koresko, Penn Public Trust, PennMont, and Koresko Law Firm. These allegations involve loans taken out against insurance policies held by the Trusts for the benefit of the plans.

The Secretary alleges that, from July 9, 2009, until January 15, 2010, Mr. Koresko and Penn Public Trust applied for and received insurance policy loans on the policies that insured the lives of participants in the plans. Although the checks were made payable to the Trusts and the plans, the checks were deposited into an account in Mr. Koresko’s name. The Secretary alleges that beneficiaries will now receive less from those insurance policies where loans were taken out. The Secretary alleges that these actions by Mr. Koresko and Penn Public Trust constituted another violation of Sections 404 and 406 of ERISA. Supplemental Compl. ¶¶ 43-48, 55 (Docket No. 349).

On January 30, 2013, the Court held a status conference with the parties. At that conference, the parties requested the assistance of a judge for settlement negotiations. On March 19, 2013, the Court referred the case to the Honorable William H. Yohn, Jr. for settlement (Docket No. 360). Through May 2013, the Court decided several discovery motions, and the parties negotiated settlement with Judge Yohn. No settlement was reached.

E. Motion for Temporary Restraining Order and Preliminary Injunction

On June 19, 2013, the Secretary filed another application for a TRO and prelitni-nary injunction (Docket No. 377). At that time, the Secretary presented evidence and argued that the Koresko Defendants had diverted death benefit proceeds totaling approximately $2.5 million for their own use and benefit. There was also evidence that the Koresko Defendants had diverted $35 million in loans on insurance policies owned by the Trusts for the benefit of the plans and employer arrangements participating in the Trusts to accounts titled to entities other than the plans’ trustee. Finally, the Secretary alleged that the Koresko Defendants had misappropriated at least $3.5 million of these loan proceeds for their own use and benefit. Ultimately, the Secretary asserted that the Koresko Defendants dissipated and misappropriated over $6.8 million in loan and death benefit proceeds. The Secretary sought the appointment of an independent fiduciary to administer the plans, pay out benefit claims, and repay the loans.

The Court scheduled an evidentiary hearing on the motion for July 8, 2013. The Koresko Defendants filed a motion under seal for a continuance of the eviden-tiary hearing (Docket No. 388). That motion was based on Mr. Koresko being physically unwell, and it attached an affidavit by a neurologist, Dr. Christopher Bradley. Dr. Bradley’s opinion was based primarily on Mr. Koresko’s complaints to him and not on Dr. Bradley’s independent medical examination of Mr. Koresko. Dr. Bradley explained that he had ordered Mr. Koresko to undergo EEG and MRI testing during the next week.

On June 28, 2013, the Court held an on-the-record telephone conference with counsel in the case to discuss Mr. Koresko’s request for a continuance and the potential for interim relief during that four-week continuance, among other items (Docket No. 420). After the call, the Court issued a follow-up order, which stated that the July 8 hearing would not be a full eviden-tiary hearing, but instead the Court would hear arguments regarding interim relief and discuss with counsel the scheduling of an evidentiary hearing (Docket No. 391).

The Court also directed Mr. Koresko’s counsel to submit further medical documentation on or before the July 8 hearing, including:

a second declaration from Dr. Bradley that describes the results of Mr. Kores-ko’s MRI and EEG and any other diagnostic tests performed on Mr. Koresko up to that point as well as Dr. Bradley’s diagnosis of Mr. Koresko and opinion regarding Mr. Koresko’s ability to participate in a deposition and evidentiary hearing; accident reports and other documentation regarding Mr. Koresko’s automobile accident; and medical records regarding Mr. Koresko’s concussion sustained approximately five years ago that the recent automobile accident is alleged to have exacerbated

(Docket No. 391).

Lastly, with the consent of the parties, the Court entered an interim order on June 28 freezing sixteen bank accounts pending a hearing on the motion for a TRO (Docket No. 392). The Court allowed PennMont and Penn Public Trust to pay the insurance premiums on the pending life insurance policies out of a certain account.

On the morning of the July 8 hearing, Montgomery, McCracken, Walker & Rhoads LLP (“Montgomery McCracken”), who had previously been representing the defendants, notified the Court of its intention to file a motion to withdraw as counsel. Mr. Koresko was not present because he had not attended the hearing. The Court therefore provided Mr. Koresko with the opportunity to come to the courtroom or to participate by phone. Mr. Koresko chose to participate in the proceedings by phone and objected to Montgomery McCracken’s motion to withdraw. The Court discussed the motion with Montgomery McCracken and Mr. Koresko in chambers ex parte.

After the discussion in chambers, the scheduled hearing proceeded in the courtroom. The Court considered only whether to continue, narrow, or expand the interim order regarding the frozen accounts, which had already been put into place with the consent of counsel, as discussed above. At the end of the hearing, the Court scheduled another hearing for August 12, with the concurrence of Mr. Koresko, to allow him the opportunity to appear in person.

On July 9, 2013, the Court entered a modified interim order, removing three bank accounts included in the frozen accounts but otherwise continuing the temporary freeze (Docket No. 407). On July 22, 2013, the Court denied the Koresko Defendants’ motion to postpone the August 12 evidentiary hearing (Docket No. 434). The Court also issued a third interim order on July 23, following a telephonic hearing on July 22, in response to the Koresko Defendants’ attempts after the July 8 evidentiary hearing to remove cash value from the insurance policies at issue (Docket No. 436).

In the July 23 interim order, the Court concluded that the Secretary and the private litigants had shown a likelihood of success on the merits of the ERISA violation and breach of fiduciary duty claims and that there was a probability of irreparable injury to the public, plan participants, and beneficiaries. The Court enjoined the Koresko Defendants from expending or otherwise disposing of the cash value, or reducing the value, of any life insurance policies owned by or for the benefit of Trusts or the plans. The Court also ordered the Koresko Defendants to produce certain documents related to the policy loans, to withdraw their pending requests to remove cash value from the policies, and to restore any cash value removed after July 8, 2013.

Two days later, on July 25, 2013, the Koresko Defendants filed a suggestion of bankruptcy (Docket No. 441). The Court ruled that the case would remain active and proceed because the Secretary’s action was exempt from the automatic stay under 11 U.S.C. § 362(b)(4), which excepts actions to enforce a governmental unit’s police or regulatory power (Docket No. 446). The Koresko Defendants filed a motion for reconsideration of that order on July 30 (Docket No. 449). The Court continued the hearing scheduled for August 12 (as well as depositions scheduled for early August) in light of the motion for reconsideration (Docket No. 457).

The Court ultimately denied the Kores-ko Defendants’ motion for reconsideration on August 28, 2013, and ordered the parties to file proposed schedules for the outstanding depositions and the preliminary injunction hearing (Docket Nos. 474, 475). The Court then scheduled a hearing for September 16, 2013, to hear arguments on motions to modify the freeze orders and on whether the appointment of an independent fiduciary was appropriate (Docket No. 486).

F. September 16 Hearing and Appointment of the Independent Fiduciary

At the September 16, 2013, hearing, the Court appointed the Independent Fiduciary (“IF”), The Wagner Law Group. Based on input from the parties, the Court issued an order on September 16 concluding that the Secretary had shown a likelihood of success on the merits on his ERISA claims and that there was the probability of irreparable injury to the public, plan participants, and beneficiaries absent the relief requested (Docket No. 496; see also Docket Nos. 502, 515).

In the September 16 Order, the Court also issued an injunction removing the Ko-resko Defendants and their agents from any position they held at that time with regard to the Trusts and prohibiting them from serving as any type of representative of the plans or employer arrangements participating in the Trusts. The IF was ordered to administer the plans, employer arrangements, and the Trusts and was given full authority and control with respect to the management or disposition of the assets of the plans, employer arrangements, and the Trusts. The IF was also directed to inventory the assets of the Trusts and the plans or employer arrangements, as well as to create a listing of diverted assets. The IF was also ordered to develop a process for day-to-day administration of the Trusts. The Court ordered an initial status report from the IF by the end of October 2013. Lastly, Mr. Koresko was ordered to turn over all assets of the plans, employer arrangements, and the Trusts to the IF as well as to provide the IF with the name, account number, and location of any bank accounts containing plan assets (Docket No. 496).

G. Discovery and Contempt Proceedings

Mr. Koresko did not comply with the September 16 order, which spawned numerous motions for contempt and contempt hearings in the following months. The Secretary filed his initial motion for contempt on September 27, 2013 (Docket No. 518). In that motion, the Secretary detailed how Mr. Koresko had made clear that he did not intend to comply with the September 16 order to provide the IF with (1) all documentation related to the plans and employer arrangements; (2) the name, account number, and location of any accounts containing plan assets; and (3) all records relating to the finances and administration of the plans and an accounting of all transfers, payments, and expenses paid in connection with the plans. In communications to the IF, Mr. Koresko stated that he would not permit his employee to answer queries about the Trusts, that he himself would not answer such questions, and that he would not provide any documents to the IF. Because Mr. Koresko appealed the September 16 order, he told the DOL that he need not comply with it.

The Court scheduled a contempt hearing for October 2, 2013, at which time the Koresko Defendants were to show cause why they should not be held in civil contempt and subject to sanctions for their failure to comply with the September 16 order (Docket No. 522). Much of the hearing on October 2 discussed the possible retention of Lawrence. McMichael, Esq., from Dilworth Paxson LLP (“Dil-worth”), on behalf of Mr. Koresko for purposes of the contempt hearing, and whether Mr. McMichael could be paid a retainer from a certain account that had been frozen by the bank.

The Court hesitated to find Mr. Koresko in contempt, stating that it “would like to attempt to see if we can’t get this order complied with without” having to “find people in contempt and the sanctions that come with that civil contempt which includes incarceration.” 10/2/13 Hr’g Tr. at 37:7-37:11 (Docket No. 534).

The following day, as the contempt hearing continued, Mr. McMichael produced to the DOL and IF an inventory, created by Mr. Koresko the night before, of insurance policies, insurance policy loans, and cash assets of the Trusts. The remainder of the hearing was spent establishing processes for obtaining further information on other bank accounts and for the ex parte freezing of appropriate bank accounts (Docket No. 536). Following Mr. McMi-chael’s submission to the Court, the Court approved Dilworth’s representation of Mr. Koresko in the contempt proceedings on October 4 and authorized a retainer to be paid from one of the frozen accounts (Docket No. 530).

On October 7, the Court issued an order referring the September 16 order regarding the IF to Judge Hey in order to monitor its implementation (Docket No. 532). After the parties held several telephone conferences with Judge Hey, the Court scheduled another contempt hearing for November 18 and 19, 2013, to take stock of the parties’ progress (Docket No. 616). The Court then issued a number of orders, including the establishment of a procedure for the IF to review and for Mr. Koresko to produce files from Mr. Koresko’s office and offsite storage (Docket No. 604).

Mr. Koresko’s deposition was taken on December 17 and 18, and January 7 and 8, in the Court’s jury room, with Dilworth’s representation. Several third-party depositions were also taken during these months.

On February 27, 2014, the Court directed the DOL to inform the Court of any outstanding contempt issues. On March 10, the DOL filed a supplemental memorandum and exhibits that focused on the refusal of the Koresko Defendants to turn over certain trust assets to the IF, particularly with regard to certain condominiums on the Caribbean island of Nevis and a property in South Carolina. At this point, Mr. Koresko also refused to turn over more than $1 million held in a Nevis offshore account. The DOL emphasized how, since the Court ordered the transfer of those funds on September 16, Mr. Koresko had flown to Nevis and moved the money from Scotia Bank into a new account at the Royal Bank of Trinidad and Tobago in the name of Koresko Law Firm (Docket No. 726). Mr. Koresko, represented by Dil-worth, responded in opposition to the DOL’s supplemental motion for contempt on March 17, 2014 (Docket No. 736).

The Court held a subsequent contempt hearing on April 1. Rather than holding Mr. Koresko in contempt, the parties agreed on language in an order permitting the IF to engage Nevisian counsel to obtain written guidance on certain issues of Nevisian law (Docket No. 762). The Court also ordered Mr. Koresko to sign letters authorizing the Nevis banks to give information to the IF about the accounts held at those banks, which Mr. Koresko did sign.

The IF obtained the requested information from Nevisian counsel and submitted a letter to the Court on June 4, 2014 (Docket No. 834). The Court held a conference with counsel for Mr. Koresko and the DOL on June 25, 2014, concerning the Nevis condominiums and bank account. On June 27, 2014, the Court ordered Mr. Koresko to wire transfer the Nevis funds by July 14 to a frozen account, used for the administration of the Trusts and in the control of the IF (Docket No. 898).

On July 11, 2014, Mr. Koresko filed a declaration that the Royal Bank of Trinidad and Tobago would not wire the Nevis funds into the United States as requested (Docket No. 912). As a result, it was agreed to that Mr. Koresko would travel to Nevis, along with Ms. Catherine Pappas, an associate at Dilworth, to arrange for the transfer in person (Docket No. 945). While Mr. Koresko was visiting Florida, however, evidently driving to the Miami Airport in preparation for his travel to Nevis, he became involved in a single-car accident on the early morning of July 16, 2014 (Docket No. 977). His plans to travel to Nevis were indefinitely postponed due to continuing health issues.

On September 10, 2014, the Court denied the Secretary’s motion for contempt except with respect to Mr. Koresko’s failure to transfer to the United States the accounts held in the Nevis branch of the Royal Bank of Trinidad and Tobago (Docket No. 990). The Court provided Mr. Ko-resko until October 3, 2014, to transfer the Nevis accounts or face contempt by the Court. However, given Mr. Koresko’s purported health concerns, the Court allowed Mr. Koresko to submit medical documentation by a treating physician, in lieu of transferring the accounts himself, which would explain “with sufficient specificity” how Mr. Koresko’s condition inhibits him from transferring the accounts (Id.).

On October 10, 2014, Mr. Koresko chose to submit medical documentation instead of transferring the accounts (Docket No. 1026). The documentation submitted, however, did not meet the Court’s directive that Mr. Koresko submit documentation of “sufficient specificity” (Docket No. 1033). In fact, the Court found that the filed physician letters were “contradictory” and “fail[ed] to include any supporting results from physical examinations, clinical findings, or supporting tests,” instead “repeating] the claims made by Mr. Koresko himself’ (Id.).

As a result, the Court ordered that Mr. Koresko transfer the accounts from Nevis by October 31, 2014, or sign a power of attorney providing the IF control of the accounts by the same date (Id.). The Court also authorized Mr. Koresko to draft his own power of attorney, but, if Mr. Koresko chose to do so, the Court directed that the new version be “similar in effect to the IF’s draft” in order for Mr. Koresko to avoid the Court’s contempt (Id.).

Mr. Koresko chose to draft his own power of attorney, which, according to Nevi-sian counsel, was technically defective (Docket No. 1108). Subsequently, the Court ordered Mr. Koresko to sign the power of attorney by December 8, 2014, as already approved by Nevisian counsel, or face contempt of the Court (Docket No. 1087). On December 15, 2014, after Mr. Koresko’s counsel informed the Court that it was “unable to reach Mr. Koresko despite multiple efforts to determine the status” of the power of attorney (Docket No. 1094) — and after a full week elapsed since the last Court imposed deadline — the Court held Mr. Koresko in contempt (Docket No. 1098). The Court provided Mr. Koresko three days to purge himself of contempt before he would be required to surrender himself to the Office of the United States Marshal (Id.). On the morning of the day that Mr. Koresko was to surrender himself, his counsel informed the Court that Mr. Koresko had executed the revised power of attorney (Docket No. 1102). On December 30, 2014, the IF confirmed that it had received the signed power of attorney, executed by Mr. Kores-ko and witnessed by a notary (Docket No. 1115).

H. IF Reports

In the September 16 order, the IF was directed to report to the Court on the status of its work by October 28, 2013 (Docket No. 496). After an extension, the IF submitted its report and exhibits to the Court on October 31, 2013. The Court docketed that report under seal (Docket Nos. 566, 567, 573).

On February 4, the Court ordered the IF to submit a supplemental report by March 14, 2014, to serve as a final report on the IF’s tasks (Docket No. 681). On March 3, the Court directed the IF to draft the report in a way that participant-specific information could be redacted, if necessary (Docket No. 712). The IF submitted its March 14 report in a timely fashion, and that report was docketed under seal (Docket Nos. 738, 739).

On March 26, 2014, the Court directed the IF to submit a supplementary report by March 31. The Court ordered the IF to provide additional information, as requested by the DOL, to assist the Court in making determinations as to coverage, outstanding loans, and the assets and liabilities of the plans (Docket No. 750). The March 31 report was timely received and docketed under seal (Docket Nos. 760, 761).

I. Jeanne Bonney

On February 19, 2014, the Secretary filed a motion requesting that the Court reconsider its earlier order directing that this case proceed without the participation of Ms. Bonney (Docket No. 704). The Secretary filed this motion seeking to depose Ms. Bonney, and he requested that the Court order Ms. Bonney to inform the Court about her current ability to participate in the litigation and to submit documentary evidence to substantiate her medical conditions. The Secretary also moved to have Mr. Koresko disqualified as Ms. Bonney’s attorney due to a non-waivable conflict of interest.

The Court issued an order on April 22, 2014, granting the Secretary’s motion, allowing the DOL to depose Ms. Bonney, and disqualifying Mr. Koresko as Ms. Bon-ney’s attorney (Docket No. 782). The Court then received a detailed affidavit from Ms. Bonney on May 5, which discussed her health. Based on that affidavit, the Court reconsidered its decision as to Ms. Bonney and concluded that Ms. Bon-ney had adequately shown that she is unable to participate in these proceedings (Docket No. 795).

On June 2, at the Court’s request, the DOL responded as to its position on proceeding against Ms. Bonney. The DOL also submitted a response to Ms. Bonney’s affidavit on June 7. Both of these letters are filed under seal (Docket Nos. 865, 866). The Court also held several on-the-record telephone conferences with Ms. Bonney and the DOL as to whether Ms. Bonney was able to be deposed.

Prior to the start of trial, Ms. Bonney informed the Court that she would be willing to agree to be permanently disbarred in return for dismissal of the case against her. The DOL would not agree to those terms. Ms. Bonney’s deposition was held on July 80 at the courthouse ip Montgomery County, Pennsylvania, with Judge Hey presiding. In large part, the Court accepted the facts presented in Ms. Bonney’s deposition as true, per the findings of fact below.

J. Pretrial Proceedings

On March 3, 2014, the Court issued a trial scheduling order (Docket No. 720). The trial was scheduled to begin June 9, 2014, potentially running through June 20. The Court scheduled the final pretrial conference for June 2, 2014. Deadlines for pretrial memoranda, pretrial motions, and the exchange of exhibits were also set in that order. The Court also ruled that Mr. Koresko would not be represented at trial by counsel paid from funds in the frozen accounts, although Mr. Koresko could represent himself, or retain counsel using his own funds, for the trial and pretrial proceedings (Docket No. 720).

On May 19, the Secretary timely filed a motion in limine to admit summaries of voluminous documents (Docket No. 813). Mr. Koresko did not timely respond by May 27, as required by the trial scheduling order. Mr. Koresko also failed to. submit a pretrial memorandum.

On June 2, the Court held the final pretrial conference. Although the final pretrial conference was scheduled to be held in person, Mr. Koresko did not appear and participated by phone only after he was contacted by the Court. When on the phone, Mr. Koresko stated that he was unaware of the pretrial conference, although it had been scheduled on the docket approximately three months earlier. Mr. Koresko also told the Court that he had materials pending before the Third Circuit to postpone the trial. The Court stated that the trial would go forward as scheduled unldss the Third Circuit took action otherwise. Final Pretrial Conference Tr. at 4:5-7:5 (Docket No. 868). The Court subsequently granted' the Secretary’s motion in limine to admit summaries of voluminous documents on June 4 (Docket No. 827). The Court also received copies of the DOL’s exhibits prior to trial. At no point did.Mr. Koresko submit any exhibits.

Mr. Koresko then filed his own motion in limine on June 4, including on behalf of Jeanne Bonney and the Trusts. (Docket No. 830). That same day, Mr. Koresko also filed a motion for recusal, postponement of trial, stay, and transfer of the case (Docket No. 831). The Court denied Mr. Koresko’s motion in limine as late and declined to engage with Mr. Koresko’s arguments on the merits at that juncture. The Court stated that those arguments had either been rejected or were premature given the trial on June 9 (Docket No. 838). The Court also denied the motion for recusal because the Court had addressed many of those merits-related issues previously (Docket No. 837). The Court then denied a renewed motion for recusal and a corrected renewed motion for recusal on July 6 (Docket No. 847).

K. Trial

Mr. Koresko filed several motions, both in this Court and in the Third Circuit, over the weekend leading up to the June 9 trial date. On Sunday, June 8, Mr. Koresko filed a “notice” that he had filed a motion for emergency stay of the trial in the Third Circuit on June 7 (Docket No. 848). The Third Circuit declined to take any action on the motion because it was not filed in sufficient time to allow the DOL to respond or in sufficient time for the Court to properly consider the motion. The Third Circuit directed the parties to show cause within three days why the motion should not be dismissed as moot. Order, Secretary United States Department of Labor v. Koresko, No. 13-3827 (3d Cir. June 9, 2014).

Without a definitive ruling from the Third Circuit, on the morning of June 9, Mr. Koresko sent in a letter to the Court stating that he would not appear at the trial, which the Court gave to the DOL and docketed under seal (Docket No. 854). On June 9, prior to the beginning of the trial, Mr. Koresko also filed a motion on behalf of his brother, Lawrence Koresko, seeking to quash the subpoena from the Secretary requiring his appearance at trial (Docket No. 849). After hearing from the DOL on that motion, the Court denied the motion to quash because Mr. Lawrence Koresko was already represented by another attorney (Docket No. 852).

The Court chose to proceed with the trial, without Mr. Koresko, allowing for the possibility that he might yet choose to appear. The DOL completed its case on June 11, but neither Mr. Koresko nor any representative of Mr. Koresko appeared at the trial.

L. Post-Trial

On June 20, 2014, the Court scheduled a telephone conference for June 23 with the DOL and Mr. Koresko in order to discuss a schedule for the remainder of the case (Docket No. 875). Mr. Koresko did not participate in that telephone conference, but he submitted a letter on June 23, in part discussing his desire to supplement the trial record and what evidence he wanted the Court to consider in making its final decision (Docket No. 886).

The Court issued a scheduling order on June 26, 2014, allowing Mr. Koresko to submit information to be included in the trial record, such as whether he would like to testify or have anyone else testify, or whether he wanted to present any documents or depositions. The Court also set a schedule for the parties to submit their proposed findings of fact and conclusions of law (Docket No. 894). On June 27, the Court expanded Dilworth’s representation of Mr. Koresko, over the objection of the DOL, to include those tasks from the June 26 order (Docket No. 898).

Mr. Koresko’s counsel submitted a document stating what documents Mr. Koresko sought to add to the trial record and what witnesses Mr. Koresko sought to call in his defense (Docket No. 924). After the Court held a conference with the parties on July 15, the Court issued a scheduling order requiring the DOL to submit its proposed findings of fact and conclusions of law by July 24. The Court allowed Mr. Koresko to submit a revised request regarding evi-dentiary submissions by August 7, and the Court would hold a hearing to discuss those requests on August 12 (Docket No. 926).

The DOL submitted its proposed findings of fact on July 24, 2014 (Docket No. 941). On August 6, the DOL filed a supplemental attachment to its proposed findings of fact and conclusions of law (Docket No. 964). On August 7, Mr. Koresko’s counsel submitted a supplemental designation of documents and witnesses (Docket No. 967).

The Court held an on-the-record status conference on August 12 to determine what additional evidence, if any, Mr. Ko-resko could still submit after the June trial (Docket No. 977). In an order that same day, the Court directed both the Secretary and Mr. Koresko’s counsel to submit to the Court updated documents by September 5, 2014: the Secretary would file a revised findings of fact and conclusions of law, which would include Ms. Bonney’s deposition testimony, while Mr. Koresko’s counsel would file his response to the Secretary’s findings of fact, including a section on legal defenses he intends to make and what additional evidence he may need admitted to support those legal defenses (Docket No. 975).

On September 12, 2014, the Secretary-filed a revised findings of fact and conclusions of law memorandum (Docket No. 997). Two weeks later, on September 26, 2014, the Secretary filed his objections to Mr. Koresko’s memorandum of law and defenses while Mr. Koresko’s counsel filed his response to the Secretary’s second revised findings of fact and conclusions of law (Docket Nos. 1014,1015).

On October 21, 2014, Mr. Koresko’s counsel filed a second supplemental memorandum of law regarding defenses (Docket No. 1036), which the Secretary responded to on October 29 (Docket No. 1041).

Upon review of the proposed findings of fact and Mr. Koresko’s challenges to those facts, the Court directed the Secretary to answer several questions regarding the findings of fact by November 24, 2014, and for Dilworth to respond by December 4, 2014 (Docket Nos. 1052,1056). The Secretary confirmed that some of its calculations were incorrect and amended its findings of fact accordingly (Docket No. 1075).

II. Findings of Fact

A. The Defendants and Their Relationships to One Another

1. Penn Mont Benefit Services, Inc. (“PennMont”) is a Pennsylvania corporation with offices at 200 W. 4th Street, Bridgeport, Pennsylvania. Government Exhibit (“GX”) 43; June 11; 2014, Tr. 43:6-43:13 (L. Koresko).

2. John J. Koresko, V (“Mr. Koresko” or “John Koresko”), is the president and, until July 2013, was a 70% owner of Penn-Mont, which was a corporate affiliate of Koresko & Associates, P.C. (“KAPC”), a law firm. GX148 at 63:18-63:22 (J. Kores-ko Dep., Dec. 13, 2013); GX147 at 78:3-78:10 (J. Koresko Dep., Aug. 25, 2009); June 11, 2014, Tr. 11:22-11:23 (L. Kores-ko). His brother, Lawrence Koresko, was the vice president and, until July 2013, was a 30% shareholder of PennMont. June 11, 2014, Tr. 12:2-12:6 (L. Koresko). In July 2013, John Koresko became the sole shareholder of PennMont after Lawrence Ko-resko stepped down. June 11, 2014, Tr. 11:6-11:23 (L. Koresko).

3. John Koresko is the sole shareholder and founder of the Koresko Law Firm (“KLF”), the successor to KAPC. GX44; GX46; GX148 at 64:3-64:10 (J. Koresko Dep., Dec. 17, 2013).

4. Jeanne Bonney is an attorney who was a salaried employee of Mr. Koresko’s law firms. GX153; June 11, 2014, Tr. 7:11-7:12, 55:1-55:12 (L. Koresko). Her employment with KLF ended on March 10, 2010. GX176 at 4:10-4:12 (Bonney Dep., July 30, 2014). At no point in her career did she have an ownership interest in either KLF or KAPC. GX176 at 18:20-18:25 (Bonney Dep., July 30, 2014). Like all employees of KAPC and KLF, she reported to John Koresko or Lawrence Koresko, with John Koresko serving as the “boss.” GX176 at 125:25-126:1 (Bonney Dep., July 30, 2014); GX176 at 23:25-24:3 (Bonney Dep., July 30, 2014) (“I could instruct others. But I didn’t supervise those other people. That wasn’t my job. My job was to just get them up and running. Everybody reported directly to John or Larry, or both, depending on the function.”).

5. KAPC and KLF also had offices at 200 W. 4th Street, Bridgeport, Pennsylvania. June 11, 2014, Tr. 42:15-42:18 (L. Koresko).

6. PennMont did not have any employees of its own. GX148 at 66:21-67:1 (J. Koresko Dep., Dec. 13, 2013); GX176 at 41:6-41:7 (Bonney Dep., July 30, 2014). All persons who performed administrative work for PennMont, including Ms. Bonney, Larry Townsend, and Lawrence Koresko, were employees of KAPC and KLF. June 11, 2014, Tr. 44:4-44:7 (L. Koresko); GX148 at 67:1-67:17 (J. Koresko Dep., Dec. 13; 2013); GX176 at 41:10-42:1 (Bon-ney Dep., July 30, 2014).

7. Penn Public Trust (“PPT”) is a nonprofit corporation with offices at 200 W. 4th Street, Bridgeport. June 11, 2014, Tr. 43:6-43:15 (L. Koresko). Mr. Koresko is the sole director of PPT, having signed its articles of incorporation and directed its fiduciary activities. GX42; GX147 at 31:17-31:19, 41:6-41:15 (J. Koresko Dep., Aug. 25, 2009).

8. John Koresko effectively served as Trustee and “CEO” of PennMont, while Lawrence Koresko, in his time with Penn-Mont, served as the “banker” and “COO.” GX176 at 24:25, 28:23-24 (Bonney Dep., July 30, 2014); see also id. at 24:15-25:2 (Bonney Dep., July 30, 2014).

B. The Trustees and the Plan Administrator

9. PennMont was the named Plan Administrator of the Plans. GX48 at § 1.13; GX49 at § 1.12; GXlal through la23 at ¶ 2.a.c.; GX148 at 65:19-66:1 (J. Koresko Dep., Dec. 13, 2013); GX147 at 127:21-128:2 (J. Koresko Dep., Aug. 25, 2009).

10. PennMont created a fictitious business association named the Regional Employers Assurance Leagues (“REAL”). This association does not exist “as an entity” and the “association” consisted of John Koresko and Lawrence Koresko. GX147 at 85:23-86:7 (J. Koresko Dep., Aug. 25, 2009).

11. On or around March 10, 2002, Community Trust Company (“CTC”) entered into an amended and restated Master Trust Agreement for the Regional Employers Assurance League Voluntary Employees’ Beneficiary Association (“REAL VEBA”) with PennMont, naming CTC as the Trustee of the REAL VEBA. See generally GX48. Lowell Gates, chairman of the Board of CTC, John Koresko, and Lawrence Koresko each signed the’ Master Trust Agreement, which John Koresko had drafted. GX48; GX176 at 34:21-34:23 (Bonney Dep., July 30, 2014).

12. On or around December 30, 2002, CTC entered into another Master Trust Agreement naming CTC as the Trustee for the Single Employer Welfare Benefit Plan (“SEWBP”). GX49. Similar to REAL VEBA’s trust agreement, Mr. Gates, John Koresko, and Lawrence Ko-resko each signed the Master Trust Agreement for the Single Employer Welfare Benefit Plan Trust (“SEWBPT”). GX49.

13. CTC was the only trustee of the Plans from March 2002 to November 30, 2008. PennMont had rejected a “co-trustee” model with CTC, seeking instead a “custodian agreement.” GX52 (Email from Jeanne Bonney to Donald Walters, Vice President, CTC).

14. On November 30, 2008, CTC merged with Farmers & Merchants Trust Company of Chambersburg (“F & M Trust”). July 17, 2009, Tr. 13:16-13:18.

15. After the merger, CTC ceased to exist as an independent entity and its Board of Directors was dissolved. GX156 at 36:2-36:4, 37:6-37:25 (Gates Dep., Mar. 12, 2014). Mr. Gates involvement with the Trust ended at the time of the merger. Id. at 8:14-8:22 (Gates Dep., Mar. 12, 2014).

16. F & M Trust was the successor by merger to CTC, and thus became the Trustee and a' named fiduciary of the Plans. Docket No. 282, 268.

17. On July 14, 2009, the Secretary of Labor (“the Secretary”), U.S. Department of Labor (“DOL”), moved for a Temporary Restraining Order (“TRO”) and Preliminary Injunction enjoining Mr. Koresko from dismissing F & M Trust and installing PPT as Trustee. Docket No. 63. While that motion pending, Judge Jones issued a “standstill Order” on November 6, 2009, prohibiting all parties from transferring “any funds of any kind for any purpose.” Docket No. 151.

18.F & M Trust continued as the sole Trustee, as memorialized in Judge Jones’ Orders, until January 15, 2010, when Judge Jones denied the Secretary’s motion, and issued an Order permitting PPT to become the Trustee. Docket Nos. 165, 181,195.

C. Participating Employers in the REAL VEBA or SEWBP Trust a. Plan Establishment

19.Employers participating in the REAL VEBA or SEWBPT established employee benefit plans by signing adoption agreements. The first, unnumbered paragraph of this adoption agreement reads, “The undersigned Employer ... hereby adopts the Voluntary Employees’ Beneficiary Association Health and Welfare Plan and its companion Trust ... by executing this Adoption Agreement and the provision herein set forth.. JJKDOL129951; JJKDOL073620; JJKDOL066086; JJKDOL050646; JJKDOL220787. The See, e.g., GXlal GXla2 GXla3 GXlal 1 GXla21 column at at at at at labeled “Adoption Agreements” in the DOL’s exhibit GX1 illustrates whether an adoption agreement was signed by each employer and, if so, the date it was signed. See June 9, 2014, Tr. 20:8-29:91 (Sweeting) (“[W]e looked at the Adoption Agreement. We wanted to see that this employer did, in fact, agree to participate in the arrangement.”).

20.Jocelyn Diaz Sweeting is a supervisory investigator with DOL’s Employee Benefits Security Administration. She has participated in the investigation of the REAL VEBA Trust and SEWBPT since 2006 and became the lead investigator in 2008. June 9, 2014, Tr. 10:9-10:16; 11:14-11:21 (Sweeting).

21. On March 10, 2006, in response to the DOL’s administrative subpoenas, Mr. Koresko produced documents regarding the various plans. June 9, 2014, Tr. 19:13-19:21. Because the documents were unidentified and unindexed, the DOL organized the documents and created a database based on those documents and additional documents supplied during litigation by Mr. Koresko’s former counsel and by the Independent Fiduciary (the “IF”), the Wagner Law Group. Id. at 17:9-17:16, 19:13-19:21, 22:13-22:17, 27:22-28:7 (Sweeting). That database is summarized in GX1. Approximately eight to ten DOL staff and investigators worked to compile the documents for the database. June 9, 2014, Tr. 18:12-18:15 (Sweeting).

22. KAPC and KLF had its own database. June 10, 2014, Tr. 139:25-141:13 (Townsend). While an employee of the Koresko law firms, Larry Townsend was assigned to develop a database to capture all of the data associated with the Trusts. Id. He tracked the employees, the participants, whether the participants had signed participation agreements, and whether they were participating in a death benefit plan. Id. All financial transactions related to the REAL VEBA and SEWBPT would be recorded in the database. If a payment arrived from an employer, and Mr. Townsend was aware of it, he would enter that payment as a financial transaction into the database. In addition, if a payment was made from the Trusts, and Mr. Townsend was aware of it, he would record that into the database as well. Id. at 180:9-180:16 (Townsend).

23. In creating the database, Mr. Townsend reviewed documents maintained by PennMont during the course of its plan administration business. June 10, 2014, Tr. 141:24-142:1; 142:10-142:21 (Townsend). Mr. Townsend summarized the documents in this database in GX4. June 10, 2014, Tr. 148:5-16 (Townsend). The Ko-resko Defendants never produced this electronic database to the DOL, and the IF only produced a copy of the more than 60,000 documents contained in this database about a month before trial. June 9, 2014, Tr. 27:22-28:25 (Sweeting).

24. The dates listed under the column “Adoption Date” on GX4 are the dates that the employer signed the adoption document. June 10, 2014, Tr. 151:12-151:15 (Townsend).

25. The adoption agreements established a plan in the name of the adopting employer, as noted on the first page of each adoption agreement. See, e.g., GX1; GXlal2 at JJKDOL051424; GXlal7 at JJKDOL229925; see also June 9, 2014, Tr. 25:10-25:17 (Sweeting). The DOL listed the name found on the first page of the adoption agreement as the name of the plan in GX1. June 9, 2014, Tr. 29:20-30:7 (Sweeting).

26. The adoption agreements often contained John Koresko’s signature. See, e.g., GXlal at JJKDOL129953; GXla5 at JJKDOL131461; June 9, 2014, Tr. 29:12-29:19; 32:3-32:11 (Sweeting).

27. PennMont issued Summary Plan Descriptions (“SPD’s”) to employers, on behalf of their Plans, and encouraged the employers to provide the SPDs to their employees. GX1 (column “Summary Plan Descriptions”); June 9, 2014, Tr. 32:12-32:20; GX176 at 34:6-34:18 (Bonney Dep., July 30, 2014). The language in the body of each of the SPDs was the same. June 9, 2014, Tr. 33:3-33:14. The SPDs reviewed by the DOL investigators all contained an identical Section 13, which was headed as ‘TOUR RIGHTS UNDER THE PLAN.” June 9, 2014, Tr. 34:2-34:9. This section stated that “[t]he Plan is covered by the Employee Retirement Income Security Act- of 1974 (‘ERISA’) which was designed to protect employees’ rights under benefit plans.” See, e.g., GXlal at JJKDOL129762 (Section 13 of the SPD for Anthem Medical Management Voluntary Employee’s Beneficiary Association Health and Welfare Plan); GXla2 at JJKB3690 (Section 13 of SPD for the B & L Sheet Metal Roofing, Inc. Voluntary Employees’ Beneficiary Association Health and Welfare Benefit Plan); GXla7 at JJKDOL246320 (Section 13 of the SPD for Classic Design, Incorporated Voluntary Employees’ Beneficiary Association Health and Welfare Benefit Plan). Of the 132 plans listed on GX1, the DOL located an SPD for all but 19 plans.

b. Plan Benefits and Benefit Adjudication

28.The adoption agreements signed by the employers had uniform language at Section 5 establishing benefits. The agreements differed mainly in the name of the company and the signature line. June 9, 2014, Tr. 31:20-32:2 (Sweeting). The employers chose the benefits that they wished to make available to their employees and memorialized them in the relevant adoption agreement. JJKDOL129952; JJKDOL125108; JJKDOL215884; JJKDOL052988; See, e.g., GXlal at GXla4 at GXla8 at GXlal3 at GXlal5 at JJKDOL11435; see also June 9, 2014, Tr. 16:9-16:12.

29. The employer established the benefits available to employees in Section 5.01 of the adoption agreement. See, e.g., GXla8 at JJKB003638, JJKDOL215884 (life benefits); GXlall at JJKDOL050647 (life benefits); GXlal5 at JJKDOL111435-111438 (life benefits and severance); GXlal9 at JJKDOL239372 (life benefits); GXla25 at JJKDOL242174 (life benefits).

30. The plan documents establishing and governing the employer’s plan set up a mechanism for adjudicating benefits. The Master Plan Document adopted by each employer through its adoption agreement sets forth at Section 5.06 the “Claim Procedure” to be followed upon a participant’s death, and it sets forth at Section 5.07 a “Claims Review Procedure” for employees or beneficiaries who have been denied a benefit. GX47 at JJKDOL025253-025254. The plan documents further state in Section 6.03 that the administrator shall assume all duties of the committee- referenced in Section 5.06 and 5.07. GX47 at JJKDOL025255. The plan documents thus set up a claims procedure for the adjudication of claims by PennMont, the Plan Administrator.

c. Plan Participants

31. Section 3 of the Master Plan Document sets forth eligibility requirements for participation. GX47 at JJKDOL025249-025250. Each Plan’s adoption agreement also sets forth that particular Plan’s eligibility requirements. See, e.g., GXlal6 at JJKDOL244387; GXlal8 at JJKDOL062654; GXla20 at JJKDOL237218. Every Plan has a number of months of service required before someone could become eligible for participation, from zero to thirty-six months. June 10, 2014, Tr. 165:8-165:10 (Townsend).

32. Every participation agreement signed by participating employees contain the following language, or similar language: “The undersigned employee hereby agrees to participate in the Employer’s Welfare Benefit Plan, adopted under the Regional Employer’s Assurance Leagues (‘REAL’) Voluntary Employees’ Beneficiary Association (‘VEBA’) plan and trust.” See, e.g., GXlal4 at JJKDOL112765; GXla21 at JJKDOL220731, 220774; GXla26 at JJKDOL082120, 082122, 082123, 082125, 082136. Participation agreements demonstrate which individual employees elected to participate and receive benefits under the arrangement. June 9, 2014, Tr. 34:22-34:25 (Sweeting). The DOL summarized the participation agreements for each Plan in GX1 by listing the name of each employee who signed a participation agreement under the column “Participation Agreement,” with the date that the participation agreement was signed next to the person’s name.' June 9, 2014, Tr. 35:1-35:10 (Sweeting).

33. Larry Townsend entered the name of each participant and the date that he or she signed the participation agreement in the database he maintained for PennMont. June 10, 2014, Tr. 143:23-144:4 (Townsend). All persons listed in the column “Last Name Insured” for the Plans in GX4 had forwarded signed participation agreements to PennMont, which were received by PennMont on the date listed under the column “Part. Agreement Received.” June 10, 2014, Tr. 154:10-154:16 (Townsend).

d. Plan Funding

34. Employers wrote checks payable to the Trusts on behalf of the Plans. See, e.g., GXlal at JJKDOL129975, 129981 (checks written by Anthem Medical Management to “COMMERCE BANK FBO REAL VEBA TRUST”); GXla6 at PNMNT8000, PNMNT8003 (checks- written by Coast to Coast Computer Products, Inc. to “Community Trust Company, Trustee”); GXla7 at JJKDOL245953 (bank check issued to “First Union Bank N.A. Trustee FBO Classic Design W.B.P.”). The DOL summarized checks written by employers to the Trust under the column “Check (From ER to TRUST)” in GX1. June 9, 2014, Tr. 26:9-26:16 (Sweeting).

35. The Trust wrote checks to pur-' chase insurance in the names of the Plans’ participants. See, e.g., GXlal at JJKDOL130034 (check written from CTC to New York Life, with heading “Account H0000 REAL VEBA.... JOHN CROU-SHORE POLICY”); GXla9 at JJKDOL015140 (check written from Penn-Mont VEBA Escrow to Southland Life Insurance Company, with memo line “Technocean, WBP”). The DOL accura