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Employee Benefits Security Administration

Media Release

Release Date: 10/11/2002
Release Number: 02-210
Contact Name: Rita Ford

Phone Number: 202.693.8671

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Labor Department Obtains Court Order Freezing Assets of Florida Health Plan

Atlanta, Georgia - The U.S. Department of Labor obtained a temporary restraining order on October 8, freezing the assets of the Juno Beach, Florida-based Service and Business Workers of America Local 125 Benefit Fund, the Service and Business Workers of America Local 125, affiliated service firms and plan Trustees. The departmentís action is aimed at preventing further depletion of the health planís assets, after more than 2,000 participants nationwide were left with $10-to-$12 million in unpaid health and medical claims.

Under the temporary restraining order, the court also appointed Jeanne Barnes Bryant, Esq., as an independent fiduciary to manage the plan and removed the defendants from their positions with the plan.

Named as defendants are the union local, trustees Harold Briglio, Timothy J. Traynor, Brad A. Barber, Charles Schleider, William Atkinhead, Ivy Trosclair, and Anthony Fasullo. Other defendants are the Illinois Association of Commerce and Industry, Inc.(IACI), DataPro, LLC, and their respective owners James Sammons and Matthew Kittock. Briglio also is president of Local 125.

Local 125, which the department alleges is not a legitimate union, sponsors the self-insured multiple employer welfare arrangement for approximately 2,725 participants. The department alleges that Briglio created Local 125 for the sole purpose of marketing the plan to employers.

The Labor Departmentís lawsuit alleges that the defendants violated the Employee Retirement Income Security Act (ERISA) by failing to maintain sufficient reserves to pay health claims and to preserve the solvency of the plan. The trustees allegedly diverted millions of dollars of employer and participant contributions to pay commissions to IACI, DataPro and Local 125, as well as the salary of Briglio.

The suit seeks to restore all losses with interest suffered by the plan, to permanently remove the defendants from their positions with the plan, to permanently bar them from serving plans governed by ERISA and to appoint a successor fiduciary to operate the plan. A hearing on a preliminary injunction is set for October 28.

The suit, filed in federal district court in West Palm Beach, Florida, resulted from an investigation conducted by the Atlanta regional office of the departmentís Pension and Welfare Benefits Administration (EBSA) into alleged violations of ERISA.

Employers and workers can contact the Atlanta regional office at 404.562.2156 or EBSAís Toll-Free Employee & Employer Hotline number, 1.866.275.7922, for help with problems relating to private-sector pension and health plans.

(Chao v. Service and Business Workers of America Local 125
Civil Action No. 02-80945)

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