For Immediate Release: June 25, 2012
Contact: Michael Wald or Michael D'Aquino
Release Number: 12-579-ATL (236)
US Department of Labor sues LifeCare of Alabama to restore more than $112,000 to 401(k) retirement plan
Hartselle, Ala.-based ambulance service failed to forward employee contributions
HARTSELLE, Ala. – The U.S. Department of Labor is suing Hartselle-based LifeCare of Alabama Inc. and CEO Susan Clingman-Banks to restore more than $112,000 in assets to the company's 401(k) plan that allegedly were mishandled by the defendants in violation of the Employee Retirement Income Security Act.
An investigation by the department's Employee Benefits Security Administration found that between October 2008 and March 2010, $112,354.91 in employee contributions was not segregated from company assets as soon as the defendants reasonably could do so and also was never forwarded to the plan. Additionally, between September 2005 and September 2008, the defendants withheld $105,586.09 in employee contributions to the plan, but failed to segregate the contributions from company assets as soon as they reasonably could do so and failed to forward them to the plan in a timely manner, resulting in lost opportunity costs for plan participants.
The lawsuit, filed in the U.S. District Court for the Northern District of Alabama, Northeastern Division, asks the court to order the defendants to restore to the plan all losses, including interest or lost opportunity costs. The suit also seeks to permanently bar the defendants from serving as the fiduciaries of any plan subject to ERISA and have Clingman-Banks' individual plan account be offset against the amount of any losses. Finally, the suit seeks to have an independent fiduciary appointed to administer the plan.
"Employees contributing to a 401(k) plan expect that their funds will be available for retirement. These defendants betrayed that trust, and the Labor Department is committed to seeing that the plan participants' funds are fully restored," said Isabel Colon, director of EBSA's regional office in Atlanta.
LifeCare of Alabama provides emergency ambulance services to locations in Alabama and Mississippi.
This case was investigated by EBSA's Atlanta Regional Office. It is being litigated by the Labor Department's Regional Office of the Solicitor in Atlanta.
Employers and workers can contact EBSA 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. LifeCare of Alabama Inc.
Civil Action File Number 5:12-cv-02147-CLS