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Release Date: 09/20/2004
Release Number: 04-1850-SEA
Contact Name: Michael Shimizu
Phone Number: 206.553.7620
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Salt Lake City, Utah - The U.S. Department of
Labor has sued Learnframe, Inc., its chief executive and financial
officers, and its board of directors for failing to deposit more than
$100,000 in 401(k) contributions into the employees’ pension accounts. |
“This
Administration is committed to protecting the retirement security of
America’s workers, and we won’t hesitate to act when retirement plan
officials mismanage workers’ benefits,” said Secretary of Labor Elaine
L. Chao. “Last year, the Administration achieved record monetary
results, recovering a total of $1.4 billion for retirement, 401(k), health
and other benefits.” |
The
lawsuit, filed in federal district court in Salt Lake City, alleges that
the company, CEO Michael Memmott, Sr.; Chief Financial Officer L. LeGrand
Price; and the board violated the Employee Retirement Income Security Act
(ERISA) when they failed to remit $109,675 in employee contributions
between June 5, 2001 and September 10, 2001, and commingled those
contributions with those of the company. In addition, the participants’
accounts were frozen after the defendants allegedly failed to pay the
401(k) administration costs, preventing participants from changing their
investment allocations or taking withdrawals/rollovers. The suit
seeks to require the defendants to restore all plan assets plus
approximately $14,000 in lost earnings, pay costs associated with
appointing an independent fiduciary to properly administer the plan, and
permanently bar the defendants from serving as fiduciaries to any plan
covered by ERISA. |
Learnframe,
Inc., develops and markets e-learning software. The company terminated
most of its staff in 2002, but continues to operate out of its office in
Draper, Utah. As of December 31, 2001, prior to the freezing of the
participants’ accounts, the plan had 128 participants and $174,654 in
assets. |
The
suit resulted from an investigation conducted by the San Francisco
regional office of the Employee Benefits Security Administration (EBSA).
Employers and workers can reach the regional office at 415.975.4600 or
through EBSA’s toll-free number, 1.866.444.EBSA (3272), for help with
questions about private-sector retirement and health plans. |
Note
to editors: (Chao vs. Michael D. Memmott, Sr.)
Civil Action File No: 2:04cv00871 |
U.S.
Labor Department news releases are accessible on the Internet at
www.dol.gov. The information in this news release will be made available
in alternate format upon request (large print, Braille, audio tape or
disc) from the COAST office. Please specify which news release when
placing your request at 202.693.7765 or TTY 202.693.7755. The U.S.
Department of Labor is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit
www.dol.gov/compliance. |
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