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Release Date: April 2, 2007
Release Number: 07-436-PHI (ebsa 07-039)
Contact Name: Gloria Della/Peter Hong
Phone Number: 202.693.8664/202.693.4676
Newark, N.J. - The U.S. Department of Labor
has obtained a court judgment requiring the former trustees of the New
Jersey Licensed Beverage Association multiple employer welfare
arrangement (MEWA) in Trenton to restore $1.65 million as restitution
for mismanagement of the plan. As a result of a separate judgment,
another $600,000 in restitution already has been paid to the plan by
co-defendant Midlantic Healthcare Inc. Besides the restitution, the
trustees are permanently barred from serving in a fiduciary capacity to
any employee benefit plan governed by the Employee Retirement Income
Security Act (ERISA) in the future.
“The mismanagement of this benefits plan was an
inexcusable betrayal of the thousands of New Jersey workers who were
left on the hook for health care bills,” said U.S. Secretary of Labor
Elaine L. Chao. “I commend the court for ordering over $2 million in
restitution and permanently barring these untrustworthy trustees from
ever again being in a fiduciary capacity involving an employee benefit
plan under ERISA.”
The Labor Department’s lawsuit alleged that the
defendants failed to determine and maintain adequate funding levels to
pay benefits from 1998 to 2003 and did not have adequate contribution
rates to support benefit payments. The following were named as
defendants: the New Jersey Licensed Beverage Association Inc.; plan
administrator Midlantic Healthcare Inc. and its vice president, Stephan
DiTomasso; former plan trustees Joseph Ardire, Richard Bellshot, William
Cleary, Melvin Gitler, James Hill, Robert Marciani, Michael Marsh, Lewis
Rothbart, Robert Scerbo and Frank Zanotti; and plan fiduciaries Randy
Normand and Mary Roenick.
Midlantic and DiTomasso allegedly did not provide
information to the plan trustees and fiduciaries regarding the financial
condition of the plan and failed to manage it in a financially sound
manner. Plan fiduciaries allegedly failed to remove Midlantic and its
principal and did not properly monitor the actions of the plan
administrator. David Silverman, the plan’s independent fiduciary, was
appointed by the court to oversee the plan and use its assets to
maximize payment of eligible claims.
The New Jersey Licensed Beverage Association Inc.
sponsored the medical plan for as many as 3,895 employees who worked in
bars and restaurants through the state of New Jersey and elsewhere. The
plan ceased operations in August 2003, at which time the plan had an
unpaid claim backlog of $6,220,323.
The suit, filed in federal district court in Newark,
resulted from an investigation conducted by the New York Regional Office
of the Labor Department’s Employee Benefits Security Administration (EBSA).
EBSA’s Web site includes health benefits tips for small employers at
www.dol.gov/ebsa/newsroom/fshlthinstips.html. Employers and workers can
reach EBSA’s New York office at 212.607.8600 or toll-free at
1.866.444.EBSA (3272) for help with problems relating to private sector
retirement and health plans.
U.S. Department of Labor news releases are accessible on the
Department's Newsroom
page. The information in this news release will be made available
in alternate format upon request (large print, Braille, audio tape or
disc) from the COAST office. Please specify which news release when
placing your request at 202.693.7828 or TTY 202.693.7755. The U.S.
Department of Labor is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit the
Department's Compliance
Assistance page.
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