WELFARE BENEFITS ADMINISTRATION
Denver Office of Public Affairs
|CONTACT:||Sharon Morrissey||FOR IMMEDIATE RELEASE|
|OFFICE:||(202) 219-8921||March 28, 2001|
COLORADO PLAN TRUSTEES ORDERED TO REPAY PARTICIPANTS AND DISBAND 401(k) PLAN
Two Colorado officials agreed March 21 to restore $17,125 to the 401(k) pension plan of the now defunct JRMK Companies, Inc. of Denver and to terminate the plan when all court-ordered conditions are met.
Milton Karavites and Jon Reed allegedly violated the Employee Retirement Income Security Act (ERISA) when they failed to forward participant contributions and loan repayments to the plan. The consent order requires Karavites and Reed to restore funds, including lost opportunity interest, offsetting their own accrued benefits with the plan and redistributing the money to 14 other plan participants.
The Department of Labor lawsuit, filed simultaneously with the consent order, alleged the defendants retained employees' payroll deferred contributions and loan repayments intended for the plan's account. Their actions caused the plan to make an extension of credit to JRMK, the plan administrator. Karavites and Reed were 50 percent owners of JRMK and plan fiduciaries. Karavites is the sole trustee of the fund.
The plan was created on April 1, 1993, to supplement participants' incomes at retirement and to provide benefits in the event of death, disability or termination of employment prior to normal retirement. The plan had 52 participants, including the defendants, and total assets of $1,079,606 as of Dec. 31, 1998. JRMK, doing business as CMP Mortgage, originated mortgage loans.
"Our goal is to assure that consumers know the department is only a phone call away to help protect the benefits promised by employers," said Gregory Egan, director of the Kansas City, Mo. Regional Office of the department's Pension and Welfare Benefits Administration, which conducted the investigation. "Employers and workers can reach us at (816) 426-5131 for help with any problems relating to pension and health plans provided in the private-sector."
The consent judgment was entered March 21 in federal district court in Denver. The lawsuit was filed on Feb. 28, 2001.
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(Secretary of Labor v. Milton Karavites and Jon Reed)
Civil Action # 01-S-0357
Issued at Denver Office, Public Affairs, DOL 1999 Broadway, Suite 1640, Denver, Colo. 80202-5716
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