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News Release

Labor Department Sues Retirement Plan Trustee For Misusing Plan Assets to Pay Legal Fees

Archived News Release — Caution: Information may be out of date.

Chicago, Illinois - The U.S. Department of Labor has sued Elmhurst-based Current Development Corporation (CDC) and its president for failing to restore $38,388 to participants of the company’s profit sharing and money purchase plans.

Assets of the plans were used to pay the legal fees of CDC to defend against a lawsuit filed with an administrative law judge on behalf of the Employee Benefits Security Administration (EBSA) for failure to file annual reports required by the Employee Retirement Income Security Act (ERISA).

The department’s lawsuit, filed on March 12, 2002 in federal district court in Chicago, alleges that CDC and George P. Klein, Jr., who served as the plans’ trustee, failed to return the plan monies used to pay CDC’s legal bills to affected plan participants after the administrative law judge found against CDC.

The plans had 58 participants and $2,467,006 in assets as of September 30, 1999.

The department is seeking to remove Klein from his position with the plan, permanently bar him from serving any ERISA-covered plan, and to appoint an independent fiduciary to take over the plan. The department also wants Klein and the company to disgorge any profits, plus interest, they may have received as a result of their actions.

Kenneth Bazar, director of the department’s Chicago regional office of the Employee Benefits Security Administration (EBSA), which investigated the case, said, “We took this additional step to ensure that the plan participants received the plan money that was illegally used and still owed to them.”

Employers and workers can contact the Chicago Regional Office at 312.353.0900 or EBSA’s toll free number, 1.866.444.EBSA (3272), for help with any problems relating to private-sector pension and health plans.

(Chao v. Current Development Corporation)
Civil Action No. CV-03C-1792

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Archived News Release — Caution: Information may be out of date.

Employee Benefits Security Administration
March 18, 2003
Release Number