EBSA News Release: April 12, 2011
US Labor Department sues trustee of Cranston, RI, 401(k) plan to restore employee contributions
BOSTON – The U.S. Department of Labor has sued David Sisti, the named trustee of the Equity Concepts Inc. Profit Sharing and 401(k) Plan of Cranston, R.I., for failure to remit employee contributions to the plan, in violation of the federal Employee Retirement Income Security Act.
Equity Concepts Inc. ceased operations in early 2008 and is the subject of a voluntary receivership in Rhode Island superior court. The retirement plan was funded solely by employee contributions.
The Labor Department’s lawsuit, filed in the U.S. District Court for the District of Rhode Island, alleges that Sisti failed to receive and collect employee contributions due the plan and to ensure that those contributions were forwarded to the plan account between August 2007 and February 2008. During that time, Sisti allegedly failed to forward to the plan $5,387 in employee contributions that were withheld from employee paychecks.
“The withheld funds were used to benefit the company, rather than the employees, who trusted that their hard-earned retirement savings would be secure,” said Edward Maloney, acting regional director of the Labor Department’s Employee Benefits Security Administration in Boston. “The law specifically requires that plan funds be held in trust and used only for the benefit of participants and their beneficiaries.”
The department seeks a court order to permanently bar Sisti from future violations of ERISA and from serving as a fiduciary or service provider to any ERISA-covered plan. The suit also seeks to require Sisti to undo any prohibited transactions and restore to the plan all losses plus interest that resulted from his fiduciary breaches.
This case was investigated by EBSA’s Boston Regional Office. The court case was filed by the Labor Department’s regional solicitor in Boston. Employers and workers seeking help with problems relating to private sector pension and health plans may reach the Boston EBSA office at 617-565-9600 or the agency toll-free at 866-444-3272. Additional information can be found at www.dol.gov/ebsa.
Solis v. David Sisti
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