Media Release

Release Date: 10/07/1998
Release Number: USDL-PWBA-98-84-10-7
Contact Name:Diana Petterson or
Beverly Sepulveda
Phone Number: (214) 767-4776, ext. 222 or 221

Albuquerque Firm And President Make Restitution To 401(K) Plan

Miletus Associates Inc. of Albuquerque, N.M. and its president agreed to fully reimburse the company’s 401(k) plan for all losses under a consent order obtained by the U. S. Department of Labor.

According to the judgment, the company and its president Donald Trone agreed to reimburse the plan for a total of $227,110.84. The restitution of lost principal and interest was ordered because of improper transfers and a loan made from the 401(k) plan to the defendants. Trone was individually barred from serving in a position of trust for any plan governed by the Employee Retirement Income Security Act (ERISA).

In addition, the defendants may be assessed a civil penalty based on $153,549.81 in improper transactions with the plan.

The judgment resolves a lawsuit filed June 26, 1998 alleging that Miletus Associates and Trone violated their duties under ERISA when they:

— transferred $79,444.21 of plan assets to the company for its own use;

— loaned $48,713.19 to Trone which was not repaid in accordance with the loan document;

— distributed retirement benefits to plan participants based on an outdated valuation of plan assets.

Miletus Associates is an 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.

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 consent judgment was entered on Oct. 6 in federal district court in Albuquerque.

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

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