Mett

William Mett (“Mett”) and Marvin Wiseman (“Wiseman”) appeal from jury convictions arising out of certain improper transactions involving pension benefit plans administered by them. Because highly prejudicial evidence was erroneously admitted against the defendants at trial in violation of the attorney-client privilege, and because this error was not harmless, we reverse the convictions. In order to assist the district court on remand, we also take this opportunity to clarify certain aspects of the scienter required for a pension fund embezzlement conviction pursuant to 18 U.S.C. § 664 .

FACTS

These criminal prosecutions stem from certain transactions involving ERISA 1 pension benefit plans administered by Center Art Galleries (“CAG”) for its employees. Mett founded CAG, a retail art gallery, in 1973 and served as its president and sole shareholder. Wiseman served as a vice-president, responsible for staff training and art acquisition. Both defendants also served on the CAG board of directors. In 1977, CAG established two pension benefit plans for its employees. Both plans were funded solely by CAG contributions, and both were covered by ERISA. At all relevant times, Mett and…