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Release Date: 10/07/2003
Release Number: BOS 2003-268
Contact Name: Rita Ford
Phone Number: 202.693.8671
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Huntington, New York - New York Small Business
Network (NYSBN) and its owner must restore $1,677,502 plus interest to
Huntington, New York-based Mutual Employees Benefit Trust (MEBT) under a
partial consent order obtained by the U.S. Department of Labor on
September 13, 2003. The court order resolves a lawsuit alleging the
defendants diverted assets from the health and welfare plan to benefit
sham labor unions and corporations. |
“The
Labor Department will aggressively enforce the law to recover assets
slated to pay health benefits promised to American workers and their
families,” said U.S. Secretary of Labor Elaine L. Chao. "We hope
Congress will soon pass AHP legislation, which will give employers a safe
alternative for quality affordable health insurance and provide the
department a greater ability to combat this kind of abuse in the future.” |
MEBT
is a multiple employer welfare arrangement that provided health and other
welfare benefits to 1,912 participants. NYSBN is an employer association
established to help small businesses obtain discounts on health care and
other goods and services. NYSBN recruited participants into MEBT. |
Besides
the restitution, the order permanently bars NYSBN owner Susan Fisher from
serving as a trustee or in any official capacity to any employee benefit
plan governed by the Employee Retirement Income Security Act (ERISA). |
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The department sued the defendants on November 15,
2001, alleging that they and 14 other MEBT trustees diverted more than
$2.2 million of MEBT’s assets to sham labor unions and corporations. |
On
May 4, 2002, the department obtained a preliminary order requiring four of
the trustees to resign, barring trustees Leonard and Sharlene Slutsky,
Clark Hower, Marketing Motivation Associates, Inc., Netscor, Inc., VCT
Financial Services, Inc. and Mutual Association Administrators, Inc. from
serving or exercising control over any ERISA-covered plan, and appointing
an independent fiduciary to oversee MEBT.The order, entered in the federal
district court in Central Islip, New York, resulted from an investigation
by the New York Regional Office of the Employee Benefits Security
Administration into alleged ERISA violations. |
Employers
and workers can reach the New York Regional Office at 212.607.8600 or
through EBSA’s toll-free number, 1.866.444.EBSA (3272), for help with
problems relating to private-sector pension and health plans. |
(Chao
v. Slutsky)
Civil Action No. 01-7593 |
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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. |
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