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Secretary of Labor Thomas E. Perez
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News Release

EBSA News Release: [1/12/2012]
Contact Name: Juan Rodriguez or Elizabeth Todd
Phone Number: (972) 850-4709 or x4710
Release Number: 11-1803-DAL

Austin, Texas-based HBMG to restore workers' 401(k) contributions

Action resolves US Labor Department lawsuit

AUSTIN, Texas — The U.S. Department of Labor has obtained a consent judgment and order resolving a lawsuit against Austin-based HBMG Inc. and Manuel Zarate, the company's president. The suit alleged that the defendants violated the Employee Retirement Income Security Act.

"Plan officials have a duty to manage and protect employees' benefit plans and their assets," said Roger Hilburn, Employee Benefits Security Administration's regional director in Dallas. "EBSA took this action to restore plan assets that were not properly preserved for the company's workers."

The lawsuit, filed in the U.S. District Court for the Western District of Texas, Austin Division, alleges the defendants failed to timely and completely remit worker contributions and loan payments to the plan from Jan. 15, 2006 through Dec. 31, 2009, and from Jan. 15, 2010 through March 21, 2011. The complaint further alleges that Zarate and HBMG failed to properly administer the plan and used plan assets to benefit themselves.

The court has ordered the defendants to restore plan losses and interest totaling $65,244 and undertake all necessary actions to terminate the plan and implement distributions and rollovers once plan losses have been paid. Additionally, the defendants will be permanently barred from serving as fiduciaries to any plan governed by ERISA in the future and pay the full penalty for violations.

HBMG Inc., a technology solutions company that focuses on information technology consulting and security, has its operations in Austin.

This case, litigated by the department's Regional Office of the Solicitor in Dallas, is part of EBSA's employee contribution project to safeguard workers' contributions to 401(k) and health benefit plans. Employers and workers can reach EBSA at 972-850-4500 or toll-free at 866-444-3272 for help with problems relating to private sector retirement and health plans. For more information, visit http://www.dol.gov/ebsa.

Solis v. Manuel Zarate, et. al.
Civil Action Number 11-cv-010195