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Employee Benefits Security Administration

News Release

EBSA News Release: November 16, 2010
Contact Name: Rhonda Burke or Scott Allen
Email: burke.rhonda@dol.gov / allen.scott@dol.gov
Phone Number: 312-353-6976
Release Number: 10-1585-CHI

US Department of Labor sues Mt. Horeb Plumbing Inc. and owner
to restore more than $30,000 to employee 401(k) plan

MT. HOREB, Wis. – The U.S. Department of Labor has sued Mt. Horeb Plumbing Inc. and its owner and president, Michael D. O’Connell, for failing to make $30,120.65 in contributions and for untimely remitting $49,235.15 to the company’s employee 401(k) plan in violation of the Employee Retirement Income Security Act.

The lawsuit, filed in the U.S. District Court in Madison, Wis., alleges that the defendants violated ERISA when they failed to forward $30,120.65 in employee contributions to the 401(k) plan from Jan. 3, 2006, to Oct. 6, 2009. Instead, the defendants allegedly co-mingled employee contributions with the general assets of the company and used the money to pay the company’s general operating expenses. The suit also alleges that during the same time period an additional $49,235.15 was not remitted to the plan in a timely matter. As of Jan. 31, 2009, the plan had 14 participants and $262,930 in assets.

“The law clearly states that contributions cannot be retained in the company’s general operating account and must be deposited into the plan’s trust,” said Steve Haugen, regional director of the department’s Employee Benefits Security Administration in Chicago, Ill. “The Labor Department will continue to help workers obtain their rightful benefits when plan fiduciaries violate the law.”

The suit seeks a court order to require repayment of losses with interest to the plan, to permanently bar O’Connell and the company from serving as fiduciaries or service providers to any ERISA-covered employee benefit plan in the future, and to appoint an independent fiduciary to administer the plan.

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 Chicago Regional Office at 312-353-0900 or toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa.

Solis v. O’Connell, Mt. Horeb Plumbing Inc.

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U.S. Department of Labor releases are accessible on the Internet at http://www.dol.gov. 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 http://www.dol.gov/compliance.