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Release Date: 01/05/2005
Release Number: 04-2511-CHI
Contact Name: Gloria
Della
Phone Number: 202.693.8664
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Chicago,
Illinois
-
A
federal
district
court
in
Indiana
has
ordered
TRG
Marketing,
LLC
of
Indianapolis,
Indiana,
and
its
executives
to
restore
losses
to
the
firm’s
health
plan,
pay
unpaid
health
claims
owed
to
plan
participants
nationwide,
and
be
permanently
barred
from
serving
as
plan
fiduciaries,
according
to
a
judgment
obtained
by
the
U.S.
Department
of
Labor.
The
judgment
resulted
from
a
lawsuit
in
which
the
department
alleged
that
TRG
executives
diverted
up
to
$3.4
million
in
health
plan
assets
to
pay
personal
expenses
for
themselves
and
family
members. |
“This
court
decision
is
a
first
and
very
welcome
step
toward
making
financially
whole
those
workers
and
their
families
who
were
harmed
by
the
tragic
mismanagement
of
the
TRG
health
plan”
said
Secretary
of
Labor
Elaine
L.
Chao. |
Under
the
judgment,
TRG,
William
Paul
Crouse
and
Carmelo
Zanfei
were
removed
from
their
positions
with
the
TRG
health
plan
and
are
permanently
barred
from
service
in
the
future
to
any
plan
governed
by
the
Employee
Retirement
Income
Security
Act
(ERISA).
The
court
found
that
the
defendants
engaged
in
self-dealing
when
they
used
health
premiums
collected
from
employers
to
pay
for
commissions
to
TRG’s
enrollment
brokers,
trips
overseas,
expensive
glassware,
personal
expenses,
charitable
contributions,
and
a
corporate
line
of
credit.
A
trial
will
be
held
to
determine
the
amount
to
be
repaid
by
the
defendants. |
The
Labor
Department’s
lawsuit
alleged
that
the
defendants
diverted
plan
assets
to
the
corporate
accounts
of
the
marketing
firm,
failed
to
charge
adequate
premiums,
and
did
not
establish
appropriate
underwriting
procedures
to
ensure
sufficient
assets
were
available
to
pay
benefits.
As
a
result,
participants
were
left
with
millions
in
unpaid
medical
claims. |
|
TRG
was
a
multiple
employer
welfare
arrangement
(MEWA)
funded
by
premium
payments
made
by
employers,
employee
contributions,
and
by
individuals
who
were
not
associated
with
any
employers.
When
terminated
in
November
2001,
the
TRG
plan
had
approximately
11,000
participants
nationwide. |
The
case
was
investigated
by
the
Cincinnati
regional
office
of
the
Labor
Department’s
Employee
Benefits
Security
Administration.
Employers
and
workers
can
reach
the
Cincinnati
regional
office
at
859.578.4680,
or
EBSA’s
toll-free
number,
1.866.444.EBSA
(3272),
for
help
with
problems
relating
to
private-sector
pension
and
health
plans. |
(Chao
v.
Crouse)
Civil
Action
No.
1:03-CV-1585-DFH-TAB |
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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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