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Release Date: 08/22/2001
Release Number: III-01-08-22-082-MD
Contact Name: Gloria Della
Phone Number: 202.219.8921
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Washington, DC - An August 24 federal court
hearing will be the next step in the Labor Department's efforts to prevent
a Bethesda, Maryland-based engineering firm from taking money out of its
pension plan to pay company expenses whose legality is in dispute. The
department obtained a temporary restraining order last week blocking the
transfer of about $700,000 to Information Systems and Networks Corp. |
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In an amended suit also filed last week, ISN was named
as a defendant to the original lawsuit filed on November 28, 2000. ISN and
plan administrator Roma Malkani allegedly violated the Employee Retirement
Income Security Act (ERISA) by improperly attempting to transfer plan
assets to reimburse the company for purported expenses from 1994 through
2000. Immediately after the department filed its original lawsuit, the
defendants sought reimbursement from the plan. |
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The amended suit also alleges that the defendants
directed the custodian to forfeit the account balances of certain
participants who were already vested under the plan. The original lawsuit
alleged that plan administrator Malkani failed to collect $160,000 in
required employer contributions owed to the pension plan and to timely
allocate interest on delinquent employee contributions to the accounts of
profit sharing plan participants. |
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The department asked the court order to require
restoration of all losses to the plans and repayment to participants of
any illegally forfeited assets. It also seeks to remove Malkani as a plan
official and permanently bar her from serving in a position of trust to
any ERISA-covered plan except one which includes only Malkani and
immediate family members. The lawsuit also asks the court to appoint an
independent fiduciary to manage and administer the assets of the plans. |
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ISN is an engineering and systems integration services
firm which sponsors the pension and profit sharing plans. The pension plan
covered 398 participants in 1996 and is funded primarily by employer
contributions. The profit sharing plan is funded by employer and employee
contributions. |
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This case resulted from an investigation conducted by
the Washington, DC District Office of the department’s Pension and
Welfare Benefits Administration (PWBA) into alleged violations of ERISA.
The amended suit was filed in federal district court in Baltimore, Maryland. |
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(Chao v. Malkani
Civil Action No. S-00-3491) |
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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. |
