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Release Date: 03/16/1998
Release Number:
USDL:
Contact Name: Sharon Morrissey
Phone Number:
202.219.8921 |
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Trustees and administrators of the now defunct
Brotherhood of Industrial Workers’ health and welfare fund have been sued
by the U.S. Department of Labor for diverting or permitting the diverting of
close to $700,000 needed to pay medical and dental claims and to pay the costs
of administering the fund. |
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The fund was established in 1972 by the
International Brotherhood of Industrial Workers, Local 119 and Local 835 of the
Sanitation Workers, and employers to provide medical and dental benefits to
union members. |
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The fund was located in Central Islip, NY, from
1972 to 1994 and covered participants from several states including New York,
New Jersey, Pennsylvania, California, Arizona and Florida. In 1994 the fund
relocated to Palm Beach Gardens, Fla. The fund ceased operations in May 1996
because it lacked sufficient assets to pay benefit claims, leaving the
outstanding obligations of approximately $700,000. Currently, the fund has
several private lawsuits against it for outstanding medical claims. |
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The department’s civil lawsuit alleges that
trustees Helen Williams and Donald Gancio and past and present administrators
Joseph Merino and his wife Sandra Briand violated their fiduciary duties under
the Employee Retirement Income Security Act (ERISA) when they granted
extensions of credit to Clarke Lasky, president of Employee Health Plan
Administrators (EHPA). Lasky allegedly failed to remit health benefit premiums
received from employers to the fund |
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Clarke Lasky, also listed as a defendant in this
case, allegedly diverted employer premiums intended for the fund on at least
two separate occasions. On Jan. 23 Lasky entered a plea of guilty under a
criminal plea agreement after being indicted for embezzlement of approximately
$750,000 of plan assets from the fund for his own use. He is scheduled to be
sentenced April 10. |
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The civil lawsuit also alleges that the defendants
acted imprudently when they continued to permit Lasky to collect employer
contributions and gave him extensions of credit while knowing that he had
previously been convicted in 1984 of theft of plan assets from another fund.
Lasky pled guilty in 1984 to embezzlement of employee benefit plan assets,
violating the Racketeer Influence and Corrupt Organizations Act (RICO), and
attempted federal income tax evasion. Then, he was sentenced to six years in
prison and ordered to make restitution to the victimized plan as part of his
plea agreement. |
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The department’s lawsuit seeks to have
defendants account for all monies belonging to the fund; to make restitution
for any losses, including lost interest; and to remove the current trustees and
administrator and permanently bar them and Lasky from serving as fiduciaries to
any ERISA- covered employee benefit plan. The lawsuit also asks the court to
appoint an independent trustee to hold and distribute fund assets to plan
participants |
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This lawsuit is the result of an investigation
conducted by the New York Regional Office of the department’s Pension and
Welfare Benefits Administration into violations of federal pension law. It was
filed in federal district court in the Eastern District of New York on March
13. |
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(Herman v. Merino, et al.)
Civil #XXXXX
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U.S. Department of
Labor news releases are accessible on the Internet. The information in this
news release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing your
request. Call 202.693.7773 or TTY 202.693.7755. |
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