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News Release

Labor Department Sues Beaumont, Texas Mortgage Lender Over Employee Contributions to Health Plan

Archived News Release — Caution: Information may be out of date.

Dallas, Texas - Beaumont, Texas-based First National Security Corporation and its owner were sued by the U. S. Department of Labor on September 20, 2002 to recover employee contributions that were not forwarded to the health plan’s third-party administrator and to restore health benefits owed to participants.

“Plan officials have a duty to properly manage plans in a way that benefits employees,” said Steven Eischen , Regional Director of the Dallas Office of the Pension and Welfare Benefits Administration (EBSA). “Our action today is designed to restore plan assets that were improperly used to benefit the employer.”

The Labor Department lawsuit, filed in federal district court in Beaumont, Texas, alleges that the corporation and its owner, Mark Hyland violated the Employee Retirement Income Security Act (ERISA) by failing to remit employee contributions to the plan’s third party administrator during August and September 1999.

The department’s suit seeks to require that the defendants restore to the plan all losses with interest and restore to participants any benefits they would have received under the plan had the contributions been made.

First National Security Corporation is a mortgage lender that originates and funds loans as well as purchases and sells mortgage notes. The health plan, which was partially self-insured, covered 211 employees of First National Security Corporation and its subsidiary Sterling Lending Corporation in July 1999. Sterling Lending is now bankrupt.

The suit resulted from an investigation conducted by the Dallas Regional Office of EBSA. Employers and workers can reach the Dallas Regional Office at 214.767.6831 or EBSA’s Toll-Free Employee & Employer Hotline number, 1.866.275.7922, for help with problems relating to private-sector pension and health plans.

(Chao v. First National Security Corp.)

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Archived News Release — Caution: Information may be out of date.

Employee Benefits Security Administration
September 25, 2002
Release Number