DOCTOR AND WIFE PLEAD GUILTY TO PENSION PLAN FRAUD

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A Bucks County, Penn. doctor and his wife pleaded guilty of conspiring to unlawfully use of employee benefit funds and to money laundering. Their pleas were entered Dec. 14 before Judge William H. Yohn, Jr. in the U.S. District Court for the Eastern District of Pennsylvania.

Dr. Andrew T. Fanelli was a partner in a medical practice, Regional Gastroenterological Associates (RGA), with offices in Langhorne and New Hope, Penn. and in Medford and Mt. Laurel, N.J. His wife Angela S. Fanelli was the firm’s business manager.

A December 1997 indictment by a federal Grand Jury charged the couple with making unauthorized withdrawals of more than $1 million from the pension and profit sharing plans maintained by RGA. The withdrawals took place at various times between September 1990 and December 1992.

Dr. Fanelli was one of two trustees of the plans, which are governed under the Employee Retirement Income Security Act (ERISA). The plans were established to provide retirement benefits for the practice’s physicians, nurses and other employees. Mrs. Fanelli was also a signatory to the plans’ accounts. The government alleged the plans’ assets were unlawfully used for both business and personal expenses. The basis for the money-laundering charge was a transfer of money from a profit sharing plan account to RGA’s corporate account and then to the Fanellis’ personal joint account.

The indictment also charged the couple with two counts of theft or embezzlement of employee benefit plan funds, but these counts were withdrawn as a result of the plea agreement. The plans’ assets were restored as a result of a civil suit brought by the other trustee, a partner in the medical practice.

Sentencing is scheduled for March 1999. The defendants were released on their own recognizance. The investigation was conducted by the Philadelphia Regional Office of the Department of Labor’s Pension and Welfare Benefits Administration, the department’s Office of Inspector General’s Office of Investigations, and the Internal Revenue Service Criminal Investigations Division. The government was represented by Assistant United States Attorneys Robert E. Goldman and Michael A. Schwartz.

(U.S. v. Andrew and Angela Fanelli, CR 97-666)

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