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Release Date: 11/23/2001
Release
Number: 01-191
Contact Name: Michael Shimizu
Phone Number: 206.553.7620 |
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Los Angeles, California - The U.S. Department of Labor
filed suit November 13 against the Gateway Data Sciences Corporation and its
officers for allegedly violating the Employee Retirement Income Security Act
(ERISA) by not sending money withheld from employees’ paychecks to their
retirement plan. The department is seeking to restore losses to the plan of the
now-defunct company, which was based in Phoenix, Arizona. |
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Filed in U. S. District Court for the District of
Arizona, the suit results from an investigation by the Los Angeles regional
office of the department's Pension and Welfare Benefits Administration (PWBA).
Besides Gateway Data Sciences Corp., the suit names as defendants Michael M.
Gordon, president and CEO of the company; Lauren Gordon, spouse; and Vickie B.
Jarvis, CFO of the company. Gordon and Jarvis also served as trustees to the
plan until February 1, 1996, at which time they became the sole members of the
plan's administrative committee. |
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The plan is a defined contribution plan funded by
a combination of voluntary employee contributions and loan payments deducted
from plan participants' paychecks (employee contributions) and mandatory
employer contributions. Plan contributions were to be forwarded to Charles
Schwab Retirement Plan Services, which in turn was to invest and allocate the
plan assets among several investment funds as directed by individual
participants. |
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The department alleges that beginning with the pay
period ending January 31, 1997, and continuing through February 23, 1998, employee
contributions of $152,350, loan payments of $11,546, and mandatory employer
contributions of $961 were not forwarded to Schwab, according to Billy Beaver,
Los Angeles regional director for the PWBA. |
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The suit asks the court to require the defendants
to restore all losses suffered by the plan, including lost interest and lost
opportunity costs; to require the plan to set off Gordon and Jarvis's
individual plan accounts against the losses caused by the alleged misconduct;
to remove Gordon and Jarvis as fiduciaries of the plan; to appoint an
independent fiduciary to make distributions to the plan's participants; to
require Gordon and Jarvis to pay for all costs associated with the appointment
and retention of the independent fiduciary; and to bar Gordon and Jarvis from
serving as fiduciaries of or service providers to any employee benefit plan
covered by Title I of ERISA. |
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(Chao v. Gateway Data Sciences Corporation
Civil Action No. 01-2204
PHX-ROS) |
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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. |
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