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Release Date: 08/21/1998
Release Number: USDL
Philadelphia III-98-21-137wp
Contact Name: Sharon Morrissey
Phone
Number: 202.219.8921 |
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The U.S. Department of Labor has sued a Latrobe, Pa. retirement
plan’s official, John P. Kokonaski, Jr., for using $280,000 of the
plan’s assets for his own living expenses and for the company’s
operating expenses. Another plan trustee and a part owner of the firm, Wayne A.
Ludwig, was included in the lawsuit because he co-signed some of the unlawful
checks written on the plan’s account and failed to make adequate
provisions for the plan to be managed prudently when he retired from the
company in 1992 and resigned from his duties as a plan trustee. |
| Foothills Litho Co., also partially
owned by Kokonaski, filed for bankruptcy in 1994 and was liquidated in 1997.
The company sponsored a money purchase pension plan covering 53 participants
and had approximately $514,000 in assets as of 1993. At the department’s
request, Kokonaski resigned his position with the plan in 1998, and an
independent fiduciary, Laurel Trust Company, was appointed to administer the
plan. |
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According to the department’s lawsuit, between 1990 and 1997,
Kokonaski made 182 withdrawals from the plan for a total of $198,436. Kokonaski
allegedly signed all of these checks in his capacity as trustee of the plan,
with no loan notes, payment schedules and security given for these
disbursements. The lawsuit notes that no money was ever returned to the
plan. |
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In its lawsuit, the department is seeking to have the defendants
restore the monies lost to the plan through their fiduciary violations of the
Employee Retirement Income Security Act (ERISA) and for Kokonaski’s
individual plan account to be set off if the plan losses plus interest are not
otherwise repaid by him and by Ludwig. The lawsuit also seeks to have the
defendants permanently barred from serving as fiduciaries of any employee plan
covered by federal pension law. |
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The investigation in this lawsuit was conducted by the
department’s Philadelphia Regional Office of the Pension and Welfare
Benefits Administration. The complaint was filed in the federal district court
in Pittsburgh on Aug. 17. |
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Herman v. Foothills Litho Company, Inc.
Civil Action #
98CV-1376 |
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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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