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Employee Benefits Security Administration

News Release

EBSA News Release: January 12, 2011
Contact Name: Michael D'Aquino or Michael Wald
Phone Number: 404-562-2076/404-562-2078
Email: D'Aquino.Michael@dol.gov / Wald.Michael@dol.gov
Release Number: 11-10-ATL (010)

US Labor Department obtains consent judgment protecting 401(k)
assets of former Raleigh, NC-based human resources company

RALEIGH, N.C. – The U.S. Department of Labor has obtained a consent judgment requiring that the Castleton Group recognize in its bankruptcy filing a priority claim of $66,705 in health insurance premiums owed to plan participants of the former Raleigh-based company.

The judgment also permanently bars former company president Suzanne Clifton from serving as a fiduciary of any employee benefit plan governed by the Employee Retirement Income Security Act in the future.

Filed in the U.S. District Court for the Eastern District of North Carolina, Western Division, the agreement resolves a lawsuit filed by the Labor Department after its Employee Benefits Security Administration conducted an investigation and, consequently, alleged violations of ERISA. The department found that Clifton and James McLamb failed to forward employer and employee contributions owed to the health plan’s third party claims administrator. The suit also alleged that the defendants failed to forward employees’ 401(k) contributions and employee loan repayments to the plan, and did not make matching contributions to the plan as required by plan documents.

In a separate settlement agreement filed with the U.S. Bankruptcy Court for the Eastern District of North Carolina, the Castleton Group has waived any claims against a fiduciary liability policy, which will allow an insurance company to pay $165,000 to the Castleton Group 401(k) plan to benefit participants and their beneficiaries.

“These funds will help workers formerly employed by clients of this company as well as its own former staff with health insurance claims as well as restore their retirement benefits,” said R.C. Marshall, EBSA’s regional director in Atlanta, Ga.

The Castleton Group handled payrolls and other human resources functions for client companies until it closed in 2007.

This case resulted from an investigation conducted by EBSA’s Atlanta Regional Office. Employers and workers can reach that office at 404-302-3900 or toll-free at 866-444-3272 for help with problems relating to private sector retirement and health plans. For more information, visit http://www.dol.gov/ebsa.

Solis v. Suzanne Clifton
Civil Action File Number 5:10-CV-00004-FL

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