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Release Date: 12/15/2004
Release Number: 04-2301-ATL
Contact Name: Gloria Della
Phone Number: 202.693.8664
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Atlanta, Georgia - The U.S. Department of Labor
has obtained a consent judgment and order that ensures payment of $840,000
in restitution to the Paramount, California-based International Union of
Industrial and Independent Workers Benefit Fund (IUIIW), the payment of
civil penalties to the federal government and requires two trustees to
resign their positions with the fund. |
Under
the judgment, Geoffrey L. Beltz and David Wright must resign as fund
trustees and along with James Miller and Henry Solowiej, are permanently
barred from service in the future as fiduciaries to any plan governed by
the Employee Retirement Income Security Act (ERISA). In September 2004,
the court appointed Jeanne Barnes Bryant as the independent fiduciary to
manage the fund. |
On
April 6, 2004, the Labor Department sued the IUIIW, former plan
administrator Oak Tree Administrators, its owner Cherille Shelp and
current and former trustees Beltz, Wright, Miller, and Solowiej. The
defendants allegedly operated the fund in a manner that violated ERISA.
From July 2000 to June 2003, the defendants were alleged to have spent
millions of dollars of fund assets on administrative expenses –
including several hundred thousand dollars paid to the purported union and
more than $1 million to marketers of the arrangement. The defendants also
allegedly delayed processing health claims, failed to operate the fund in
an actuarially sound manner and paid excessive fees for services provided
to the fund. |
“The
Labor Department’s legal action resulted in the return of money to pay
benefits to thousands of workers,” said U.S. Secretary of Labor Elaine
L. Chao. “This Administration has a strong track record in protecting
the benefits promised to America's workers, and this year we achieved
record monetary results totaling $3.1 billion for retirement, 401(k),
health and other programs." |
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The fund’s health benefits were marketed to employers
and individuals in Texas, Georgia, Oklahoma, California and many other
states. Several states, including Oklahoma and Georgia, ordered the
fund’s operators to stop all insurance-related activities. |
The
consent order was entered in federal district court in Atlanta. The
Atlanta regional office of the department’s Employee Benefits Security
Administration (EBSA) investigated the case. Tips for small employers on
purchasing health benefits may be found at EBSA’s Web site at http://www.dol.gov/ebsa/newsroom/fshlthinstips.html.
Employers and workers can reach the Atlanta regional office at 404.562.2156
or EBSA toll-free at 1.866.444.EBSA (3272), for help with problems
relating to private-sector retirement and health plans. |
(Chao
v. International Union of Industrial and Independent Workers)
Civil Action No. 1:04-CV-0934-BBM |
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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