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News Release

Labor Department Settles Lawsuit Against Denver Plan Official

Archived News Release — Caution: Information may be out of date.

Denver, Colorado - The U.S. Department of Labor obtained a consent judgment June 28 against a Denver-based plan official of the now defunct Overlake Mortgage Company’s (OMC) self-funded medical benefits plan. James Park, a fiduciary to the plan and owner of the company, agreed to pay all outstanding health claims totaling $13,839.23 plus $1,600 for the cost of administering the plan and paying the outstanding claims.

The department’s suit was filed May 14, 2002 in Denver federal district court. The company went out of business in 2000. Between November 1, 1999 and March 30, 2000, Park failed to transfer more than $15,000 in employee contributions to the contract benefits administrator, causing plan participants’ medical claims to remain unpaid.

“Our goal is to protect the hard-earned benefits promised by employers,” said Gregory Egan, director of the Kansas City Regional Office of the Labor Department’s Pension and Welfare Benefits Administration (PWBA), which investigated the case.

Egan noted that employers with similar problems, who are not yet the subject of an investigation by PWBA, may be eligible to participate in the department’s Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP requires employers to make workers whole but allows them to avoid government enforcement actions and civil penalties as well as any applicable excise taxes.

“The VFCP program gives plan sponsors a way to come into compliance with ERISA by restoring workers’ benefits while avoiding an investigation by the government,” said Egan. “It protects workers’ health and retirement benefits and allows us to focus our resources on those who seek to avoid compliance.”

For more information about the VFCP see PWBA's Web site.

Employers and workers can contact the regional office at 1.816.426.5131 or PWBA's Toll-Free Employee & Employer Hotline number at 1.866.275.7922 for help with any problems relating to private-sector pension and health plans.

(Chao v. James Park
Civil Action No. 02-0937-AJ(BNB))

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Archived News Release — Caution: Information may be out of date.

Employee Benefits Security Administration
July 12, 2002
Release Number