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Release Date: 05/29/2002
Release Number: 227
Contact Name: Sharon Morrissey
Phone Number: 202.693.8664
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Chicago,
Illinois - The U.S. Department of Labor has sued trustees
and service providers of the pension, welfare and off-season supplement plans of
the Portage, Ind.-based International Longshoremen’s Association Local 1969
for violations of federal pension law. |
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The suit alleges the plans’ trustees authorized
multi-million dollar payments to parties-in-interest in connection with two
Nevada real estate investments. Named in the lawsuit were trustees Andre Joseph,
Raymond Sierra, David Lynch and Edward Rentz as well as Michael A. Daher, sole
owner and investment advisor with Leader in Marketing Fulfillment, Inc. (LMF)
and John Sherwood Dunsmoor who had power of attorney over the pension plan
account. |
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Daher and Dunsmoor equally owned Qualified Investment
Limited (QIL), a Nevada corporation formed in connection with the plans’
investments in real estate. Both were indicted and have pleaded guilty to
various criminal charges with respect to the plans’ real estate investments. |
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The suit alleges violations of the Employee Retirement
Income Security Act (ERISA) involving loans of $3.475 million by the plans
through QIL for a residential development known as Grapevine Villas in Mesquite,
Nev. The suit also alleges the plans improperly purchased a parcel of
undeveloped property, also in Mesquite, known as the Chardonnay property. The
suit alleges that the plans’ investments in these properties violated ERISA,
because they involved prohibited transactions between the plans and parties in
interest to the plans. |
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The suit, filed May 24 in federal district court in South
Bend, Indiana, further alleges the trustees breached their responsibilities when
they used plan funds to pay union and non-plan expenses. |
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The suit is asking that the trustees be removed from their
positions with the plans and permanently barred from serving any ERISA-covered
plans. It also seeks to offset the trustees’ own individual plan
accounts to help restore the losses to other participants and asks the court to
name an independent fiduciary to administer the plans and undo the prohibited
transactions. |
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“This action reaffirms our commitment to protect the
hard-earned benefits promised by employers,” said Kenneth Bazar, director of
the Chicago regional office of the department’s Pension and Welfare Benefits
Administration, which investigated the case. |
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Employers and workers can contact the regional office at
312.353.0900 or call the Toll-Free Employee & Employer Hotline at
1.866.275.7922 for help with problems relating to
private-sector pension and health plans. |
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(Chao v. International Longshoremen's Association
Local 1969, et al
Civil Action No. 3:02CV380RM) |
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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 202.693.7775. |
