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Release Date: 06/05/2002
Release Number: III-02-05-05-063-VA
Contact Name: Gloria Della
Phone Number: 202.693.8666
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Washington, DC - The U. S. Department of Labor sued bankrupt Direct Press
Modern Litho, Inc. of Fredericksburg, Virginia and its owner on June 3, 2002 for
failure to forward contributions withheld from employee paychecks to the
company’s retirement savings and health plans. |
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“This action reaffirms our commitment to protection of the hard-earned
benefits promised by employers,” said Mabel Capolongo, Director of the
Philadelphia Regional Office of the Pension and Welfare Benefits Administration
(PWBA). |
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According to the suit, Direct Press and Jose Pizzini violated the Employee
Retirement Income Security Act (ERISA) by failing to deposit into the retirement
savings and health plans contributions of employees at various times between
1999 to June 1, 2001. |
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The department simultaneously filed an adversary complaint in federal
bankruptcy court to prohibit Jose Pizzini from discharging any debts owed to the
plans. The department contends Pizzini’s failure to remit the
employees’ plan contributions arose from fraud, misuse of plan assets or
embezzlement. On February 26, 2002, the defendants filed for Chapter 7
bankruptcy. |
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The suit seeks a court order to require that the defendants reimburse the
plan for all losses with interest, to remove them from their fiduciary positions
with the plans and to appoint an independent fiduciary to manage the plans.
The suit also asks the court to require the offset of the plan accounts of
Pizzini to restore plan losses and to re-distribute those assets to the
remaining plan participants. |
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Direct Press was a printing company that operated 10 satellite offices
throughout the country. The plans covered 66 participants and had
cumulative assets of $1,074,397 as of December 31, 1998. |
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The department's Voluntary Fiduciary Correction Program
(VFCP) allows plans
to correct failures in forwarding contributions withheld from employees’
paychecks and certain other ERISA violations. Eligible applicants that
properly correct transactions under the program will not be subject to the
enforcement action described above or liable for civil penalties. Excise
tax liability under section 4975 of the Internal Revenue Code is also eliminated
for certain transactions. |
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This suit and adversary complaint, filed in federal district court in
Alexandria, resulted from an investigation conducted by PWBA’s Washington
District Office. Employers and workers can contact the district office at
301.713.2000 or PWBA's Toll-Free
Employee & Employer Hotline number: 1.866.275.7922, for help with any
problems relating to private-sector pension and health plans. |
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(Chao v. Pizzini
Civil Action No. 02-80866-RGM) |
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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. |
