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Release Date: 04/23/2003
Release Number: III-03-04-23-041-MD
Contact Name: Sharon Morrissey
Phone Number: 202.693.8664
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Baltimore, Maryland - The U.S. Department of
Labor sued AK Robins LLC of Baltimore, Maryland and the fiduciary of the
company’s 401(k) plan on April 17, 2003 for failing to forward employee
contributions to the plan. |
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The suit, filed in federal district court in Baltimore,
alleges that Sheila Canelos, majority owner of the company and the plan’s
sole trustee, failed to forward to the plan $19,680.59 in contributions
withheld from employees’ paychecks between September 1998 through
December 2000, and used the money to benefit the company. |
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The lawsuit seeks to permanently bar the company and
Canelos from serving in a position of trust with any employee benefit plan
covered by the Employee Retirement Income Security Act (ERISA) and to
offset Canelos’ individual plan account to repay the losses, including
lost opportunity costs. The suit also seeks to appoint an independent
fiduciary to manage plan assets and distribute them to the participants
and beneficiaries after liquidating the plan. |
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The food service equipment manufacturing company
formerly maintained its principal place of business in Baltimore. Although
Canelos filed for Chapter 13 bankruptcy on March 21, 2002, the bankruptcy
court dismissed the case on January 2, 2003. The 401(k) plan had eight
participants and $165,005.12 in assets as of February 25, 2003. |
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Mabel Capolongo, director of the department’s
Philadelphia regional office of the Employee Benefits Security
Administration (EBSA), noted that employers with similar problems, who are
not yet the subject of an investigation by EBSA, may be eligible to
participate in the Department’s Voluntary Fiduciary Correction Program (VFCP).
Participation in the VFCP requires employers to make workers whole, but
allows them to avoid EBSA enforcement actions and civil penalties, as well
as excise taxes. For more information about the VFCP see www.dol.gov/ebsa. |
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“The VFCP gives plan sponsors a way to come into
compliance with ERISA by restoring workers’ benefits while avoiding an
investigation by EBSA,” said Capolongo. “It protects workers’ health
and retirement benefits and allows us to focus our resources on those who
seek to avoid compliance.” |
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EBSA’s Washington district office investigated the
case. Employers and workers can contact the district office at
301.713.2000 or EBSA’s toll free number, 1.866.444.EBSA (3272), for help
with problems relating to private-sector pension and health plans. |
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(Chao v. Sheila Canelos)
Civil Action No 1:03-CV-1132 |
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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. |
