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Release Date: 07/08/2002
Release Number: 278
Contact Name: Sharon Morrissey
Phone Number: 202.693.8664
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Chicago, Illinois - The U.S. Department of Labor has sued Arlington Heights,
Illinois-based Atlas Lock & Key, Inc. and its officers on June 28 for failing to
forward $9,816.52 in employee contributions to the company’s 401(k) salary
reduction plan. |
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“By this action, the department is reaffirming its commitment to protect
the hard-earned benefits promised to employees," said Kenneth Bazar, director of
the department’s Chicago regional office of the Pension and Welfare Benefits
Administration, which investigated the case. |
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The department’s complaint, filed in federal district court in Chicago,
alleges that plan trustees Larry Brodacz and Rene Brodacz, who served Atlas as
company president and vice president, respectively, failed to forward to the
plan contributions withheld from employees’ paychecks from December 26, 1998 to
May 29, 1999. They allegedly used the money for the company’s benefit.
They also allegedly failed to secure a proper bond as required by the Employee
Retirement Income Security Act (ERISA). Larry Brodacz also improperly
served as a plan official. He was incarcerated from January 18, 2000 to
approximately October 11, 2000, for credit card fraud. |
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Atlas ceased doing business in 2000 soon after Larry Brodacz’s
incarceration. As of December 31, 1999, the plan had seven participants and
assets totaling $20,494. |
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In its suit, the department is seeking restoration of the plan’s losses,
plus interest, and the waiver of the defendants’ individual accounts in the
plan if they are not otherwise able to restore the losses to the plan. The
department also is asking a permanent bar of Atlas, Larry Brodacz and Rene
Brodacz from serving any ERISA covered plan, the appointment of an independent
fiduciary to manage and terminate the plan, and the purchase of a fidelity bond. |
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Bazar noted that employers with similar problems, who are not yet the subject
of an investigation by PWBA, 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 government
enforcement actions and civil penalties as well as any applicable excise taxes. |
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"The VFCP program gives plan sponsors a way to come into compliance with
ERISA by restoring workers' benefits while avoiding an investigation by the
government," said Bazar. "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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Employers and workers can contact the regional office at
312.353.0900 or
PWBA’s Toll-Free Employee & Employer Hotline number, 1.866.275.7922 for help with problems relating to
private-sector pension and health plans. |
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(Chao v. Atlas Lock & Key, Inc.
Civil Action # 02-C-4666) |
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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. |
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