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Release Date: 09/26/2002
Release Number: 162
Contact Name: Gloria Della
Phone Number: 202.693.8664
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San Francisco, California - The U.S. Department of Labor sued the former
executives of bankrupt Rapid Micro, Inc. of Castro Valley, and Network
Guardians, Inc. of Hayward, September 20, for failure to remit to the Network
Guardians, Inc. SAR-SEP Plan, $20,000 in contributions withheld from
employees’ wages. |
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“This action demonstrates our commitment to protection of the
hard-earned benefits of American workers,” said Bette Briggs, director of the
department’s San Francisco regional office of the Pension and Welfare Benefits
Administration (EBSA), which investigated the alleged violations of the Employee
Retirement Income Security Act (ERISA). |
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The department’s lawsuit, originally filed September 12 in federal
district court in San Francisco, alleged that Mark R. Koike and Rosemary Chan,
presidents of the bankrupt companies Rapid Micro and its successor, Network
Guardians, respectively, failed to timely forward the contributions of
participants to their plan accounts since 1996. The defendants also
allegedly commingled employee contributions with corporate assets and used the
plan’s assets to benefit those companies. |
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The department is seeking to restore the contributions plus any lost
interest, to permanently bar the defendants from serving as fiduciaries to any
plan governed by ERISA, and to require them to cooperate with the plan trustee
in distributing plan assets to participants. |
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Rapid Micro, which filed for Chapter 7 bankruptcy, ceased operating in
June 1997. Network Guardians, which ceased operations on June 14, 1999,
became the sponsor of the plan on October 1, 1997. The plan covered 13
participants employed by the companies. |
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Briggs 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. |
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“The VFCP gives plan sponsors a way to come into compliance with
ERISA by restoring workers’ benefits while avoiding an investigation by EBSA,”
said Briggs. “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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For more information about the VFCP see www.dol.gov/ebsa. |
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Employers and workers can contact the San Francisco Regional Office at
415.975.4600 or EBSA’s Toll-Free Employee & Employer Hotline number,
866.275.7922, for help with problems
relating to private-sector pension and health plans.
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(Chao v. Koike
Civil Action No. C-02-447 MEJ) |
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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 202.693.7755. |
