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Release Date: December 23, 2008
Release Number: 08-725-ATL (317)
Contact Name: Michael Wald
Phone Number: 404.562.2078
Atlanta – The U.S. Department of Labor has
sued Business Financial Solutions Inc., which operated as Academic
Financial Services, and trustees of its 401(k) plan, for alleged
violations of the Employee Retirement Income Security Act (ERISA)
involving delinquent employee and employer contributions owed to the
plan.
The lawsuit alleges that trustees Wayne Morgan and
Michael Murray failed to forward to the plan $48,691 in employee
contributions withheld from paychecks between May 2005 and January 2007.
Instead, the funds allegedly were co-mingled with the general assets of
the Tampa, Florida, company. About the same time, the company failed to
make basic matching contributions on behalf of participants, as required
by plan documents. Failure to do so resulted in the plan losing $28,756.
Filed in the U.S. District Court for the Middle
District of Florida, the suit seeks to restore plan losses and any lost
earnings on those contributions. The department also asks the court to
remove the trustees as fiduciaries of the Academic Financial Services
401(k) Savings Plan, appoint a successor trustee to distribute any
proceeds to the participants, and permanently bar the defendants from
serving as fiduciaries of any ERISA-covered plan.
“The Labor Department will take whatever action
appropriate to protect the retirement benefits of employees, including
initiation of litigation when necessary,” said Rebecca Marshall,
director of the Atlanta Regional Office of the department’s Employee
Benefits Security Administration (EBSA), which investigated this case.
Business Financial Solutions operated Academic
Financial Services as a student loan consolidator, acting as a loan
originator and as broker for education loans sold in the secondary
market.
Employers and workers can reach EBSA’s Atlanta
Regional Office at 404.302.3900 or toll-free at 866.444.3272 for help
with problems relating to private sector retirement and health plans. In
fiscal year 2007, EBSA achieved monetary results of $1.5 billion related
to pension, 401(k), health and other benefits for millions of American
workers and their families.
Chao v. Business Financial Solutions
(Civil Action Number 8:08-cv-2366-T-33EAJ)
U.S. Department of Labor news releases are accessible on the
Department's Newsroom
page. The information in this news release will be made available
in alternate format (large print, Braille, audio tape or
disc) from the COAST office upon request. Please specify which news release when
placing your request at 202.693.7828 or TTY 202.693.7755. The Labor Department is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit the
Department's Compliance
Assistance page.
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