|
|
|
Release Date: 08/04/2003
Release Number: III-03-08-121-MD
Contact Name: Sharon Morrissey
Phone Number: 202.693.8664
|
Printer Friendly
Version
|
|
|
|
Baltimore, Maryland - The U.S. Department of
Labor obtained a default judgment on July 22, 2003, ordering AK Robins LLC
of Baltimore, Maryland and the trustee of the company’s 401(k) plan to
repay to the plan $26,935.84 as restitution for failure to forward
employee contributions to the plan. |
Under
the judgment, Sheila Canelos, the company’s majority owner and sole plan
trustee, will have her plan account offset if the losses are not otherwise
restored to the plan. She also will be removed as the plan’s trustee and
permanently barred from serving any employee benefit plan covered by the
Employee Retirement Income Security Act (ERISA). The company will be
removed as the plan administrator and replaced by a court-appointed
independent fiduciary, which will pay eligible participants and terminate
the plan. |
The
department filed a lawsuit on April 17 in federal district court in
Baltimore, alleging that Canelos failed to forward to the plan $19,680.59
in contributions withheld from employees’ paychecks between September
1998 and December 2000 and used the money to benefit the company. The
department’s Employee Benefits Security Administration’s (EBSA)
Washington district office investigated the case. |
The
food service equipment manufacturing company formerly maintained its
principal place of business in Baltimore. Although Canelos filed for
personal 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 $223,805 in assets as of December 31, 2000. |
|
Mabel Capolongo, director of EBSA’s Philadelphia
Regional Office, said, “The law clearly states that employee
contributions must be forwarded to the plan to pay future promised
benefits.” |
Capolongo
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. |
Employers
and workers can contact the Washington 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. |
(Chao
v. Sheila Canelos)
Civil Action No 1:03-CV-1132 |
|
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. |
