|
|
|
|
|
Release Date: 04/20/1998
Release Number:USDL:
98
Contact Name:GLORIA DELLA
Phone Number: 202.219.8921 |
|
|
|
PROSERA CMI, Inc., an employee leasing firm formerly headquartered
in Englewood, Colo., affiliated firms and their owner were removed from their
positions with the firm’s health plan and permanently barred from serving
or doing business with employee benefit plans governed by federal pension law
under a court judgment obtained by the U. S. Department of Labor. |
|
The judgment — entered Monday, April 20 — also provides
that $90,213.89 in restitution be transferred to the plan by owner Jerry
Burnett, his wife Diane Burnett, PROSERA CMI, Inc., PROSERA Business Solutions,
LLC, PROSERA Administrators, LLC, and PROSERA Mobile Factory Systems,
LLC. |
|
PROSERA CMI purports to be an employee leasing firm even though
client employers retained complete control over their employees. The leasing
firm provided for a fee a package of benefits which included payroll services,
health benefits, and workers compensation or occupational injury insurance
coverage. The company marketed its services to employers located in the Denver
area. |
|
On Nov. 13, 1997, a federal court issued a temporary restraining
order appointing an independent fiduciary to manage, terminate and distribute
the plan’s assets. The court order also removed Jerry Burnett and PROSERA
CMI from their positions with the plan and barred them from doing business or
receiving compensation from plans governed by the Employee Retirement Income
Security Act (ERISA). |
|
The Labor Department sued Burnett and other defendants for
violating ERISA requirements. Burnett and PROSERA CMI allegedly:
failed to conduct actuarial or other inquiries as to the
appropriate levels of contributions to be paid by employers, the solvency of
PROSERA and the plan’s ability to pay benefit claims and benefits or the
appropriate levels of reserves and insurance needed to fund benefits;
commingled premiums paid by employers and workers for
health and workers compensation benefits with the assets of the company and
diverted plan money to the use of Burnett;
transferred plan assets to relatives since July 1994 to
pay for automobiles and related services, credit card bills for himself and
family members; and
used plan money to make payments or loans to himself, the
company and its affiliates. |
|
The judgment resulted from an investigation conducted by the
Kansas City Regional Office of the Department’s Pension and Welfare
Benefits Administration into alleged violations of ERISA. |
|
(Herman v. Burnett)
Civil Action No. 97-K-2723 |
|
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. |
|
|
| |
|
