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News Release
Labor Department Sues Minnesota Executive Over Delinquent Employee Contributions
Archived News Release — Caution: Information may be out of date.
St. Paul, Minnesota - The U.S. Department of Labor sued an executive of Argir.com Technology Solutions, Inc. in Woodbury, Minnesota on February 19, 2003, for failure to forward employee contributions to the company’s 401(k) plan. The department simultaneously filed an adversary complaint to prevent the trustee from discharging his debt to the plan in bankruptcy proceedings.
“Corporations and executives who are plan fiduciaries have a duty to protect the pension assets of participants,” said Gregory Egan, director of the Kansas City regional office of the department’s Employee Benefits Security Administration (EBSA), which investigated the case.
The lawsuit, filed in federal district court in St. Paul, alleged that Frederic D. Argir violated the Employee Retirement Income Security Act (ERISA) by failing to remit $9,242 in contributions withheld from employees’ paychecks from July 2001 to November 2001 and used the money to benefit the company. At the time of the improper action, Argir was the president and chief executive officer of the company as well as a trustee of the plan.
The suit seeks a court order to require that Argir repay the contributions plus interest to the plan and be permanently barred from serving as a fiduciary to any ERISA-covered plan. The adversary complaint was filed in U.S. Bankruptcy Court in St. Paul. The company filed for Chapter 7 bankruptcy on May 7, 2002. Argir filed for personal bankruptcy on September 13, 2002.
The company, which ceased business operations on October 15, 2001, provided computer consulting, networking, web site development and web hosting services. The plan had $18,427 in assets and 13 participants as of December 31, 2001.
Egan noted that employers with similar problems, who are not yet the subject of an investigation by EBSA, 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 EBSA enforcement actions and civil penalties as well as any applicable excise taxes. For more information about the VFCP see www.dol.gov/ebsa.
Employers and workers can contact the regional office at 816.426.5131 or EBSA’s toll free number, 1.866.444.EBSA (3272), for help with problems relating to private-sector pension and health plans.
(Chao v. Frederic D. Argir)
Civil Action No. 03-1123 PAM/RLE
(Chao v. Frederic D. Argir)
Adversary Complaint No.03-3052
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Archived News Release — Caution: Information may be out of date.