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Release Date: 12/09/2003
Release Number: 03-882-CHI
Contact Name: Gloria Della
Phone Number: 202.693.8664
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Chicago, Illinois - The U.S. Department of
Labor sued an executive of Omni Circuits, Inc., in Glenview, Illinois, to
prevent him from avoiding debts he owes to the company’s welfare plans
during his personal bankruptcy proceeding. |
“This
action underscores Labor Secretary Elaine L. Chao’s commitment to
protect the benefits that employers promise to their employees,” said
Ken Bazar, director of the Chicago regional office of the Employee
Benefits Security Administration (EBSA), whose office investigated the
case. |
The
plans provided health, dental and supplemental life insurance benefits to
70 employees of the company. Omni Circuits, which was the plans’
administrator, ceased operations on February 21, 2002. |
The
adversary complaint alleges that James E. Schwarz violated the Employee
Retirement Income Security Act (ERISA) by failing to remit $23,996 in
premiums and payments contributed by employees between December 1, 2001,
and February 21, 2002, to insurers and using the money to pay corporate
operating expenses. Schwarz was president and chief executive officer of
the family-owned company. The adversary complaint was entered in the U.S.
Bankruptcy Court for the Northern District of Illinois in Chicago. |
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In a related action, the department filed a civil
lawsuit against Schwarz and his daughter, Corinne Moderhock, over the
delinquent premium and payments of employees. The suit seeks to require
that the defendants restore all losses plus interest to the plan and be
permanently barred from serving as a fiduciary to any ERISA-covered plan. |
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, civil penalties and any applicable excise taxes. For more
information see www.dol.gov/ebsa. |
Employers
and workers can reach the Chicago regional office at 312.353.0900 or
through EBSA’s toll-free number, 1.866.444.EBSA (3272), for help with
problems relating to private-sector retirement and health plans. |
(Chao
v. Schwarz)
Civil Action No. 03 C 7430
(In Re: Schwarz) Adversary Case No. 03 A 04384 |
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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. |
