Media Release

Release Date: 06/30/1998
Release Number: USDL: PWBA-98-55-6-30
Contact Name:GLORIA DELLA
Phone Number: 202.219.8921

Albuquerque Firm And President Sued Over 401(K) Plan Investments

The U. S. Department of Labor has sued Miletus Associates Inc. and its president for making over $120,000 in improper transfers and a loan from the company’s 401(k) plan to the defendants.

Miletus Associates is an Albuquerque, N.M.-based engineering firm which manufactures airborne surveillance equipment. The company’s 401(k) plan covered 29 participants and had $371,052.57 in assets as of February 1996.

The Labor Department lawsuit alleges that Miletus Associates and its president Donald Trone violated their duties under the Employee Retirement Income Security Act (ERISA). The defendants allegedly:

transferred $79,444.21 of plan assets to the company which subsequently retained the money;

loaned $48,713.19 to Trone which was never collected and is currently delinquent;

failed to file annual reports which included a financial statement of assets and liabilities valued at their current value; and

distributed retirement benefits to plan participants based on an outdated valuation of plan assets.

The lawsuit seeks a court order to require that the defendants reimburse the plan for any losses resulting from their improper actions and to undo transactions prohibited by federal pension law. It also seeks to remove the fiduciaries from their positions with the plan and to permanently bar them from serving in positions of trust to this or any other plan governed by ERISA.

This case resulted from an investigation conducted by the Dallas Regional Office of the department’s Pension and Welfare Benefits Administration into alleged violations of ERISA. The lawsuit was filed on June 26 in federal district court in Albuquerque.

(Herman v. Miletus Associates, Inc.)
Civil Action No. 98-778JC-LSG

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