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United States v. Thompson

United States District Court, D. Massachusetts

September 13, 2016

UNITED STATES OF AMERICA
v.
CHRISTOPHER THOMPSON; KIMBERLY THOMPSON; AIR QUALITY EXPERTS, INC.; and AQE, INC., Defendants.

          MEMORANDUM AND ORDER

          Patti B. Saris Chief United States District Judge

         INTRODUCTION

         Christopher Thompson, Kimberly Thompson, Air Quality Experts, Inc. (“Air Quality”), and AQE, Inc. (“AQE”) (collectively, “defendants”) are charged with mail fraud, theft or embezzlement from an employee benefit plan, and making false ERISA statements. The indictment alleges that the defendants made false reports to the Massachusetts Laborers' Benefit Fund (“MLBF”) and, based on those reports, failed to make payments due to the MLBF.

         The defendants moved to dismiss the indictment. They argued that, under the facts as alleged, their representations were not false and they did not fail to pay any money to which the alleged victim was entitled. For the reasons below, the defendants' motion (Docket No. 39) is DENIED.

         FACTUAL BACKGROUND

         The following facts stated in the indictment are taken as true for the purpose of a motion to dismiss the indictment. Boyce Motor Lines, Inc. v. United States, 342 U.S. 337, 343 n.16 (1952).

         At times relevant to the indictment, Air Quality was an asbestos abatement company incorporated in New Hampshire in 1987. AQE was an asbestos abatement company incorporated in New Hampshire in 2005.

         Christopher and Kimberly Thompson together owned and operated Air Quality and AQE. Christopher Thompson was the president and treasurer of Air Quality. Kimberly Thompson, his wife, was the president of AQE and the clerk of Air Quality.

         On or about September 22, 2005, AQE agreed to be bound by any collective bargaining agreement (“CBA”) between the Massachusetts Laborers' District Council of the Laborers' International Union of North America and the Massachusetts Building Wreckers and Environmental Remediation Association, Inc. During the relevant time period, there were three consecutive CBAs that spanned the dates of July 1, 2004 to June 30, 2016. The CBAs governed the remittance of fringe benefit contributions to a number of employee welfare and pension benefit plans, some of which were subject to the provisions of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”). Under the terms of the CBAs, AQE was obligated to make monthly “remittance reports” to the MLBF that reported the number of hours worked by union members for AQE and to make benefit contributions to the MLBF based on those hours.

         There is no suggestion in the indictment or by either of the parties that Air Quality was a signatory to any of the CBAs.

         Air Quality operated out of the same location as AQE under the same management, using the same equipment, and employing the same workforce. As a result, the indictment alleges that the companies were actually “a single business.”

         “[W]henever conditions permitted, ” the defendants paid employees from the payroll of Air Quality rather than that of AQE because that choice was “generally financially advantageous.” By doing so and reporting to the MLBF only the hours worked by union members paid from the payroll of the union signatory AQE, the defendants allegedly failed to report all of the hours they were obligated to report and failed to make the required amount of contributions to the MLBF. The indictment further alleges that this “double-breasted shop” arrangement violated the CBA and that the defendants “concealed and caused to be concealed” from the MLBF the payment from the payroll account of Air Quality for work covered by the CBA.

         The indictment also alleges that the defendants failed to report and to make benefit contributions for “shop hours” (time spent preparing for and traveling to a job site at the beginning of a workday and returning and unloading trucks and equipment at the end of a workday) that union members worked for AQE.

         On January 19, 2016, the defendants were indicted on eighteen counts of mail fraud, in violation of 18 U.S.C. § 1341; one count of theft or embezzlement from an employee benefit plan, in violation of 18 U.S.C. § 664; and eighteen counts of making false ERISA statements, in violation of 18 U.S.C. § 1027. The indictment also included ...


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