Prior to instituting grand jury proceedings, as well as seeking an indictment, or filing an information, under either 29 U.S.C. § 504 or 29 U.S.C. § 1111, consultation is required with the Criminal Division through the Labor-Management Unit of the Violent Crime and Racketeering Section. Because the underlying purpose is to eliminate undesirable persons from the labor movement in the case of 29 U.S.C. § 504 or from access to or management of the assets of an employee benefit plan in the case of 29 U.S.C. § 1111, a procedure of notification prior to proceeding with criminal prosecution has been adopted by the Criminal Division in certain cases.

In the absence of a clear demonstration of a knowing and intentional violation of either statute, the disqualified individual and the responsible person(s) who permit(s) the disqualified person to serve in violation of either statute are notified and given the opportunity to vacate the prohibited position and avoid prosecution. This policy furthers the remedial purposes of the statute and has generally resulted in compliance by the affected individuals. Following consultation with the Criminal Division, the procedure need not be used where available evidence indicates that the affected individuals were aware that the disqualified person's service was prohibited by reason of conviction at the time such service was rendered.

In those cases where notification of the disability is required prior to prosecution, the Criminal Division or the interested investigating agency will give notice of the disqualification by certified mail or by delivery through the case investigator. In the case of a convicted officer or employee of a labor organization or employer association or convicted labor consultant disqualified by 29 U.S.C. § 504, the individual serving in a prohibited capacity and the chief executive officer of the local and international labor organizations, employer associations, etc., are notified of the violation and advised that prosecution will be initiated unless the prohibited relationship is terminated. In the case of a convicted benefit plan officer, employee, fiduciary, or consultant, etc. disqualified by 29 U.S.C. § 1111, the individual in violation, the benefit plan administrator/trustees/attorney and the chief executive officer of any affected business firm is given similar notice and advice.

In order to effectuate this procedure, all United States Attorneys are requested to forward to the Labor-Management Unit, Violent Crime and Racketeering Section copies of the accusation, indictment, or criminal information, any plea agreement and the judgment and commitment order (or equivalent documents) for any convicted individuals in their respective districts who are known to occupy a position in a labor organization, employee benefit plan, employer association, or to be serving as a consultant, adviser, or labor relations consultant with respect to such organizations. The following information should be furnished if possible: the address of the convicted individual, the name of the chief executive officer of the affected organization and the organizations's address, and the name of the benefit plan administrator, trustee, attorney, etc., and his/her address. In some cases a copy of the transcript from the sentencing hearing and any plea hearing also may be requested in order to facilitate a determination of whether the convicted individual's crime disqualifies him or her from service prohibited by the statutes.

It should be noted that convicted organizations are treated differently from convicted individuals for purposes of the ERISA disability. Convicted corporations and partnerships are not automatically disqualified upon sentencing from prohibited service with employee benefit plans as described in 29 U.S.C. § 1111. The Federal sentencing court (or a United States District court for the district where the disqualifying state crime was committed) must first determine, after notice to the convicted organization, the prosecuting attorney, and the Secretary of Labor, that the convicted organization's service would be inconsistent with the purposes of the ERISA disability. 29 U.S.C. § 1111(a)(B).

[updated January 2020] [cited in JM 9-130.300]