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Employee Benefits Security Administration

News Release

Office of Public Affairs San Francisco CA
For Immediate Release: December 17, 2013
Contact: Jose A. Carnevali
Phone: (415) 625-2631
Release Number: 13-2285-SAN (SF-216)

Hawaii contractor to restore more than $460,000 to employee profit-sharing plan
US Labor Departmentís investigation finds plan trustee mismanaged investments

HONOLULU - The U.S. Department of Labor has secured a consent judgment with Aiea-based cement construction and contracting company Reef Development of Hawaii Inc. and its president, Samuel Sanchez Aguirre. An investigation by the department’s Employee Benefits Security Administration established that Aguirre, acting as trustee to the profit-sharing plan, violated the Employee Retirement Income Security Act by mismanaging plan assets, resulting in more than $700,000 in lost principal, plus approximately $303,000 in lost interest.

“The law calls for the plan fiduciaries to exercise the highest level of care when it comes to managing employee benefits plans,” said Crisanta Johnson, director of the Los Angeles Regional Office of EBSA, which investigated the case. “Plan fiduciaries are not guarantors, but must act prudently when making investment decisions.”

Investigators found that Aguirre neglected his fiduciary responsibilities by not acting carefully in the selection and monitoring of investments made on behalf of the profit-sharing plan. Aguirre’s lack of due diligence prior to making investments violates ERISA’s requirements of acting solely in the interest of participants and beneficiaries of the plan. The investigation found that Aguirre directed $550,000 to shares of a Texas-based company that later filed for bankruptcy and was exposed as a Ponzi scheme. The plan also suffered a loss of $950,000 in debt instruments invested in a hotel restoration project that was foreclosed. The investigation, which began in April 2011, surveyed plan activity between 2006 and 2011. In all, 50 plan participants were affected by Aguirre’s investment choices.

The consent judgment and order requires Aguirre to restore $463,236 in losses to the plan attributable to nonfiduciary participants within 30 days of the judgment’s filing. Once the funds have been restored, Aguirre and the fiduciaries will terminate the plan and disburse the funds. Upon the plan’s termination, Aguirre is permanently enjoined from serving as a fiduciary or service provider to any employee benefit plan subject to ERISA. Additionally, Aguirre has been assessed a penalty equal to 20 percent of the recovery amount, or $92,647. 

Reef Development of Hawaii specializes in cement work, restoration and additions to property, and commercial developments.

EBSA protects the retirement, health and other workplace-related benefits of America’s workers, retirees and their families. The agency oversees approximately 701,000 private sector retirement plans, 2.3 million health plans and other plans that provide benefits to more than 141 million Americans. Collectively, these plans hold more than $7.3 trillion in assets. Additional information can be found at

U.S. Department of Labor news materials are accessible at The information above is available in large print, Braille, audio tape or disc from the COAST office upon request by calling (202) 693-7828 or TTY (202) 693-7755.