Minnesota Trustees are Permanently Barred from Managing Plan Assets in Judgment Obtained by Labor Department

Archived News Release — Caution: Information may be out of date.

Minneapolis, Minnesota - David Kosmecki and Kathleen Andrusko, trustees of the Simple IRA plan for ASM of Minnesota (ASM), in Minneapolis, were permanently barred from serving any employee benefit plan covered under federal pension law in a consent order and judgment obtained on August 20, by the U.S. Department of Labor. The order and judgment also requires the trustees to restore $2,674.36 to the Simple IRA plan.

“This action reaffirms our commitment to protect the hard-earned benefits promised by employers,” said Gregory Egan, director of the department’s Kansas City Regional Office of the Pension and Welfare Benefits Administration (PWBA).

A suit simultaneously filed with the order and judgment alleges from January 1998 to December 1999 Kosmecki and Andrusko, also owners of ASM, violated the Employee Retirement Income Security Act (ERISA) by failing to forward to the plan money withheld from ASM employees’ paychecks for contribution to the plan and retaining the money in the company’s assets where it was used to pay corporate operating expenses.

ASM is a mortgage company located in Maple Grove, Minnesota, which was founded in 1993 by Kosmecki and Andrusko. They established the plan in January 1998 to provide retirement benefits to their employees.

Regional Director Gregory 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 PWBA enforcement actions and civil penalties as well as applicable excise taxes.

“The VFCP gives sponsors a way to come into compliance with ERISA by restoring workers’ benefits while avoiding an investigation by PWBA,” 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 www.dol.gov/pwba.

The consent order and judgment were entered in the federal district court in Minneapolis, Minnesota.

The Kansas City Regional Office of PWBA conducted the investigation. Employers and workers can contact the regional office at 816.426.5131 or PWBA’s Toll-Free Employee & Employer Hotline number, 1.866.275.7922, for help with any problems relating to private-sector pension and health plans.

(Chao v. David Kosmecki et al
Civil Action No. 02-CV-2937)

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Archived News Release — Caution: Information may be out of date.