EBSA News Release: November 16, 2010
U.S. Labor Department sues executive of defunct Oklahoma aircraft manufacturer for misuse of welfare benefit assets
ALTUS, Okla. - The U.S. Department of Labor has sued the owner of defunct Quartz Mountain Aerospace Inc., which operated in Altus, Okla., and Coffeeville, Kan., for misusing assets of the company's welfare benefit plan to benefit himself and the company.
The department's lawsuit alleges owner Mark A. Arciero violated the Employee Retirement Income Security Act by failing to remit employee premiums to the plan for the period of Aug. 8, 2008, through Nov. 15, 2008, segregate plan assets from those of the company, hold those assets in trust to pay promised benefits and properly administer the plan. The defendant allegedly transferred the assets to benefit the company, causing the welfare plan to suffer financial losses. The suit was filed in U.S. District Court for the Western District of Oklahoma-Oklahoma City Division, by the department's Employee Benefits Security Administration.
The department is seeking a court order to require that Arciero repay to the plan all losses with interest, correct any transactions prohibited by law, be permanently barred from serving in a fiduciary capacity to any plan governed by ERISA in the future and, if necessary, offset any claims or benefits owed to the defendant against losses by the plan.
"One of the most important responsibilities a fiduciary has is depositing money from workers' wages into their benefit plan accounts," said Roger Hilburn, regional director of EBSA's Dallas, Texas, office. "This case demonstrates our commitment to take legal action to protect the hard-earned benefits of workers."
Quartz Mountain Aerospace sponsored the welfare plan to provide health, dental, short-term disability and life insurance coverage for its employees. The company filed for Chapter 7 bankruptcy Oct. 29, 2009. There were 87 participants whose premiums were not forwarded to the plan's insurance carriers.
This case is part of EBSA's employee contribution project to safeguard workers' contributions to 401(k) and health benefit plans. Employers and workers can reach EBSA's Dallas office at 972.850.4500 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa.
Solis v. Mark A. Arciero
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