|
|
|
Release Date: 12/20/2002
Release Number: 77
Contact Name: Gloria Della
Phone Number: 202.693.8664
|
Printer
Friendly Version
|
|
|
|
Cleveland, Ohio - The U.S. Department of Labor
sued defunct Lakewood Manufacturing Company of Lakewood, Ohio and its
president on December 18, 2002 to recover losses suffered by the company’s
profit sharing plan on numerous loans and transfers totaling $505,842 made
to benefit the corporate executive and companies owned by him. |
|
Richard Peplin, Jr. allegedly violated the Employee
Retirement Income Security Act (ERISA) by investing all of the plan’s
assets in risky investments with companies affiliated with him. He
allegedly loaned plan assets to Viatech Communications Group, Inc. and its
subsidiary Psychic Discovery Network. The companies stopped operating in
August 1997 without repaying the plan loans. |
|
Peplin also failed to execute agreements between the
plan and Viatech for stock investments and made several additional
unsecured loans with plan assets to an unrelated individual and other
corporations. In addition, the suit charges him with miscalculating the
account balances of plan participants, failing to obtain a fidelity bond
as required by law and failing to provide workers with descriptions of the
rules of the plan. |
|
Lakewood Manufacturing Company manufactured parts for
military contractors and sponsored the profit sharing plan for 19
participants. Peplin acted as the sole trustee of the profit sharing plan
after the retirement of his father in 1996. In 1997, Peplin began to
switch the plan’s investments. |
|
“Individuals who manage pension plans are forbidden
from using the plan’s assets as their personal bank accounts,” said
Joseph Menez, Regional Director of the department Cincinnati Regional
Office that investigated the case. “Our lawsuit is designed to return
money improperly managed and invested so it can be available to pay
pension benefits.” |
|
The suit seeks a court order to restore to the plan all
losses plus interest, to correct all prohibited transactions, to replace
the company and Peplin with an independent fiduciary to manage the plan,
and to permanently bar them from serving other ERISA-covered plans in the
future. The suit was filed in federal district court in Cleveland. |
|
(Chao v. Lakewood Manufacturing Co.
Civil Action No. 1:02CV2470) |
|
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. |
