News Release
EBSA News Release: January
7, 2011
Contact Name: John M. Chavez
Phone Number: 617-565-2075
Release Number: 10-1712-BOS/BOS 2011-013
US Labor Department sues defunct Portland, Maine, company and
former owner to
recover misused retirement plan assets
PORTLAND, Maine – The U.S. Department of
Labor has sued Larry Chaney and his defunct company, CLRS Enterprises,
of Portland for failing to forward approximately $11,000 in employee
contributions withheld from employees’ paychecks to the company’s
savings incentive match plan for employees individual retirement
account, known as a SIMPLE IRA. The company formerly operated as
Woodward Thomsen Co.
The lawsuit, filed in the U.S. District Court for the
District of Maine, followed an investigation by the Labor Department’s
Employee Benefits Security Administration into alleged violations of the
Employee Retirement Income Security Act. The suit alleges that
defendants Chaney and CLRS withheld plan contributions from employee
wages but failed to forward those contributions to the plan from Feb.
27, 2007, through Nov. 27, 2007. Instead, the defendants allegedly used
the money to satisfy obligations of CLRS, which ceased operations in
November 2008.
CLRS sponsored the plan to provide retirement
benefits for employees of the company. Chaney, as sole owner of CLRS and
a plan fiduciary, was the only individual with check-writing authority.
“These defendants failed in their fiduciary duties
when they allowed plan assets to be used by the company that sponsored
the plan,” said Edward Maloney, EBSA’s acting regional director in
Boston, Mass. “ERISA requires that plan assets be used only for plan
participants and beneficiaries.”
The suit asks the court to order the defendants to
restore all losses with interest owed to the plan, undo any prohibited
transactions and permanently prohibit Chaney from serving as a fiduciary
to any ERISA-covered employee benefit plan in the future. In addition,
the suit seeks to require that Chaney’s individual plan account be
offset to cover the losses to the plan if necessary.
The case was investigated by EBSA’s Boston Regional
Office. Employers and workers can contact EBSA at 617-565-9600 or
toll-free at 866-444-3272 for help with any problems relating to private
sector pension and health plans. Additional information can be found at
http://www.dol.gov/ebsa.
Solis v. Larry Chaney
Civil Action Number: 10-CV-00460-DBH
# # #
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please visit http://www.dol.gov/compliance. |