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News Release

Former And Current Officials Of Reston, VA Pension Plan Sued By Labor Department For Failing To Forward Contributions

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor has sued former and present officials of the 401(k) pension plan of a now defunct Reston, Va. company for collecting contributions from their employees but failing to forward them as earmarked to the company plan.

According to its lawsuit, the Labor Department stated that former trustees Edward Gaskell of Vienna, Va. and Robert Patenaude of Burke, Va. and current trustee Michael Black of Annapolis, Md., all corporate officers of Integrated Systems Technology, Inc. (IST), withheld approximately $53,000 in contributions from Oct. 13, 1994 until sometime in 1996 from their employees’ paychecks. Allegedly, they did not forward the contributions to the plan or remitted them after the date they could reasonably segregated from IST’s general assets, commingling these assets with the general assets of the firm and using them for its general operating expenses.

Although IST, which developed health care-related software for hospitals and government contractors, ceased operating in 1996, the plan has not formally been terminated. Also, there have been no Form 5500 Annual Reports filed with department since Dec. 31, 1994, at which time the plan had $324,183 in assets and 33 participants

“Our goal is to assure that consumers know that the department is only a phone call away to help protect the benefits promised by employers,” said Mabel Capolongo, director of PWBA’s Philadelphia Regional and Washington District Offices. “Employers and workers can reach us at (215) 596-1134 in Philadelphia or at (202) 254-7013 in Washington for help with any problems relating to private-sector pension and health plans.”

In addition to having the defendants restore all losses, including interest to the plan, the lawsuit is seeking to have the court remove the sole remaining trustee Black for his position with the plan, to permanently bar all three defendants from serving any employee benefit plan covered by the Employee Retirement
Income Security Act, and for an independent fiduciary to be appointed to manage the plan and its assets.

The complaint is the result of an investigation conducted by PWBA’s Washington District Office, responsible for administering the federal pension law. It was filed Dec. 30, 1999 in federal district court in Alexandria, Va.

(Herman v. Michael Black, et al)
Civil Action # 99-1979-A

U.S. Department of Labor news releases are accessible on the Internet. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the Central Office for Assistive Services and Technology. Please specify which news release when placing your request. Call 202.693.7773 or TTY 202.693.7775.

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

Employee Benefits Security Administration
January 3, 2000
Release Number