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News Release

Labor Department Sues Defunct Money Centre For Failure to Pay Health Claims

Archived News Release — Caution: Information may be out of date.

Charlotte, North Carolina - The U.S. Department of Labor sued The Money Centre, Inc. of Charlotte, North Carolina on March 4, 2003, for failure to sufficiently fund the defunct company’s health and welfare plan, which resulted in at least $100,000 in unpaid health claims owed to participants and beneficiaries.

“Federal benefits law states that health plans must be properly managed to pay future benefits,” said U. S. Secretary of Labor Elaine L. Chao. “The Labor Department will aggressively enforce the law to recover assets to pay health benefits promised to workers and their families.”

The lawsuit alleges that the firm violated the Employee Retirement Income Security Act (ERISA) by failing to administer the plan, to terminate the plan when the firm ceased business operations and to remit $2,673.57 in employee contribution to the plan. The suit also said participants were unable to obtain plan information and to arrange for payment of claims.

The department contends The Money Centre has assets that can be used to pay legitimate claims of the plan.

The Money Centre was a mortgage lender that sponsored the plan for more than 200 participants and beneficiaries. The firm ceased doing business in April 2000. In May 2000, the firm notified participants and beneficiaries that it did not make sufficient contributions to fund benefits.

The suit seeks the appointment of an independent fiduciary to terminate the plan and distribute its assets. The suit, filed in federal district court in Charlotte, was investigated by the Atlanta Regional Office of the department’s Employee Benefits Security Administration (EBSA).

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, civil penalties and applicable excise taxes. For more information see

Employers and workers can reach the Atlanta Regional Office at 404.562.2156 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. The Money Centre, Inc.
Civil Action No. 03-CV-89

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Archived News Release — Caution: Information may be out of date.

Employee Benefits Security Administration
March 20, 2003
Release Number