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The U.S. Department of Labor has sued a Florida
pension plan official for deducting but not forwarding $84,521 from
employees’ paychecks to the company-sponsored 401(k) savings and
investment plan.
The department’s complaint names as the sole
defendant Charles J. Givens, III., an officer of the Group of Companies, L.C.,
who allegedly had discretion and control over management and assets of the plan
and, accordingly, was responsible for the improper violations of the Employee
Retirement Income Security Act. The Group of Companies, L.C. was founded by his
father Charles J. Givens, Jr., who developed and successfully marketed
financial advice and wealth-building strategies through books and television
appearances between 1986 and 1996.
Originally, the defendant’s father
established a Subchapter S Corporation called the Charles J. Givens, Jr.,
Organization with himself as the single shareholder. Subsequently, Givens Jr.
reorganized his business by establishing four new companies including Financial
Programs, Inc.; Financial Success Systems, Inc.; Givens Television, Inc., and
Share the Wealth, 2000, Inc. In November 1994 he established the Group of
Companies, L.C., based in Longwood, Fla., as a holding company for the four
companies.
In March, 1995, Givens Jr. resigned from managing
his organization, which was renamed International Administration Services
(IAS). After downsizing from 300 to 15 employees, IAS filed for bankruptcy in
1996.
On Jan. 1, 1996, employees of the Group of
Companies were transferred to employment of Financial Programs, Inc., a
subsidiary. On June 17, 1996, the subsidiary filed a petition in Florida State
Court for assignment of a benefit of creditors. Effectively, the companies are
no longer in business. Givens Jr. died in July 1998.
During 1995, the Group of Companies established a
401(k) plan, with eligible employees making contributions by means of payroll
deduction. Between Feb. 1, 1996 and May 31, 1996, while the defendant was in
control of the companies’ finances, $84,521 was deducted from the
employees’ paychecks but never remitted to the 401(k) plan. The employee
contributions were commingled with the general assets of the Group and/or its
affiliates.
The department is seeking to have the defendant
Givens III restore to the plan all losses, plus interest, and to have him
permanently barred from serving any plan subject to ERISA. The department also
is asking the court to name a successor independent fiduciary to take over
operation of the plan, giving the successor authority to marshal and distribute
its assets and ultimately to terminate the plan.
The complaint resulted from an investigation
conducted by the Miami District Office of the department’s Pension and
Welfare Benefits Administration into alleged violations of the federal pension
law. The lawsuit was filed in federal district court on Nov. 12 in Orlando.
(Herman v. Charles J. Givens, III.)
Civil
Action No. 99-1448 CRV ORL-19 |
