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EBSA News Release: [04/03/2007]
Contact Name: Gloria Della or Peter Hong
Phone Number: (202) 693-8664 or x4676
Release
Number: 07-0483-ATL
Labor Department obtains $5 million court order
to restore Tennessee company’s pension funds
ATLANTA — A federal district court in Chattanooga, Tenn., ordered the former chief executive officer of USA Mining Inc. to restore $4,775,130, including interest, to the pension plans of Standard Coosa Thatcher (SCT) Yarns Inc. to repay improper loans, transfers and investments made to companies in which he owned an interest The SCT Yarns plans made significant investments with USA Mining Inc., USA Bullion Inc. and Bugsy Malone's Speakeasy LLC, all companies owned by defendant Dan Geiger.
"Workers counted on these pension plans and the department is pursuing every legal avenue to recover the stolen funds," said Secretary of Labor Elaine L. Chao. "This nearly $5 million court order is an important step in the ongoing effort to replenish the pension plans."
According to the court's summary judgment, Geiger and affiliated corporate defendants must make restitution to the plans and are permanently barred from providing services or serving in a fiduciary capacity to plans governed by the Employee Retirement Income Security Act (ERISA) in the future. The court also ordered Bugsy Malone's Speakeasy LLC to restore an additional $192,778 plus interest to the plans.
In 2004, the Labor Department sued Geiger for misusing assets of the plans to benefit himself and others. From 1999 to 2001, Geiger participated in numerous loans, transfers and investments from the pension plans to various companies and individuals affiliated with them, including USA Mining Inc. and USA Bullion Inc. He is currently serving 108 months in a California federal prison to be followed by 36 months of probation for his criminal activity related to the plans.
Now defunct, SCT Yarns, which was located in Chattanooga, manufactured yarn for the textile industry. The company sponsored two retirement plans covering 771 participants and had $65,801 in assets, according to the latest data available to the Labor Department. The Pension Benefit Guaranty Corp. has taken over the retirement plans for hourly and salaried employees and will pay benefits to retirees.
The court judgment resulted from an investigation by the Atlanta Regional Office of the department's Employee Benefits Security Administration (EBSA). In fiscal year 2006, EBSA achieved monetary results of $1.4 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.
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Chao v. USA Mining Inc.
Civil Action Number 1-04-CV-0001
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