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News Release

Court Orders Restitution Of More Than $227,000 To Compton Pension Plan

Archived News Release — Caution: Information may be out of date.

A Los Angeles federal court entered a default judgment requiring Mid-Cities Association for Retarded Children of Compton, Calif. and the trustees of its defined benefit plan to pay $227,515 and any future losses as restitution to the plan.

The court also ordered the aCourt Orders Restitution Of More Than $227,000 To Compton Pension Plan ppointment of an independent trustee to replace the existing plan trustees. The defendants also were required to provide a formal accounting of plan finances to the independent trustee within 90 days of the judgment.

The retirement plan covered 54 participants and had $1,718,000 in assets as of December 1995. The plan provided for distribution to participants upon retirement, disability, death or termination of employment.

The judgment resolves a lawsuit by the Labor Department against the association and plan trustees John Wagoner and his wife, Irma Wagoner, for failing to maintain records required by the Employee Retirement Income Security Act (ERISA). The April 9, 1997 lawsuit alleged that records furnished to the Pension and Welfare Benefits Administration (PWBA) — which administers ERISA-covered plans — failed to substantiate the value of plan assets reported on the plan’s Form 5500 annual reports.

The defendants also made improper distributions to plan participants, including Irma Wagoner, and transferred plan funds to Mid-Cities. The illegal transfers to Mid-Cities did not require payment of interest and there was no agreement requiring the repayment of funds transferred to the association.

The default judgment was entered on Feb. 5 in federal district court in Los Angeles. The case resulted from an investigation by the Los Angeles Regional Office of PWBA.

(Herman v. Wagoner)
Civil Action No. 97-2361-JNI(Mc)

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Archived News Release — Caution: Information may be out of date.

Contact Name: GLORIA DELLA
Phone Number: 202.219.8921

Employee Benefits Security Administration
February 19, 1998
Release Number