U.S. Department of Labor sues former insurance agency in Kennesaw, Georgia, to protect participants’ 401(k) contributions

Atlanta – The U.S. Department of Labor has sued Hoyla Insurance Group of Kennesaw, Georgia, and Michael Hoyla to recover employee contributions commingled with company funds and distribute assets remaining in the company’s abandoned 401(k) plan.

The lawsuit, filed in the U.S. District Court for the Northern District of Georgia, alleges that the defendants violated the Employee Retirement Income Security Act (ERISA) by failing to segregate employee contributions from company assets and to terminate the plan when the company ceased operations.

The department’s suit alleges that employee contributions of $46,207 were not forwarded to the 401(k) plan in a timely manner and an additional $66,072 in contributions were withheld from employees but never forwarded to the plan.

The suit seeks to restore all losses to the plan, including interest and lost opportunity costs, resulting from the improper actions of the company and Michael Hoyla, to bar them from future service as plan fiduciaries and to appoint an independent fiduciary to manage the plan.

“Fiduciaries have a legal obligation to act in the best interests of plan participants, and when they fail in that trust, the Labor Department will not hesitate to step in to protect workers’ retirement funds,” said R.C. Marshall, regional director of the department’s Employee Benefits Security Administration (EBSA) office in Atlanta.

Hoyla Insurance Group was an insurance agency that was administratively dissolved in May 2008.

This case resulted from an investigation conducted by EBSA’s Atlanta office. Employers and workers can reach EBSA’s Atlanta Regional Office at 404.302.3900 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans.

In fiscal year 2008, EBSA achieved monetary results of $1.2 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

Chao v. Hoyla Insurance Group
(Civil Action File Number 1:09-CV-0315)

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