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U.S. Labor Department obtains court judgment ordering fiduciary of 401(k) of defunct Westborough, Mass., company to properly administer the plan
Boston - The U.S. Department of Labor has obtained a consent judgment ordering Yongsik Lee, president and owner of the now-defunct United Automation Technologies Inc. of Westborough, Mass., to properly administer and bring to termination the company's 401(k) plan.
The United Automation Technologies Inc. 401(k) Profit Sharing Plan was established for the benefit of the employees of the company, formerly located at 53 East Main St. in Westborough. The company was the sponsor and administrator of the plan, and Lee was the plan's trustee.
The Labor Department filed suit in the U.S. District Court for the District of Massachusetts alleging that Lee violated his fiduciary duty under the Employee Retirement Income Security Act (ERISA) to the plan by abandoning it even after he had agreed to administer the plan to resolve a prior Labor Department investigation. In 2001, Lee entered into a settlement agreement with the commonwealth of Massachusetts whereby Lee and the company paid $26,693.32 owed to the plan, and a separate agreement with the Department of Labor off-setting $6,712.80 from Lee's own plan account for the benefit of the other participants and beneficiaries.
That 2001 settlement agreement required Lee to expeditiously make all proper distributions of plan assets to plan participants and then to properly terminate the plan, all of which he failed to do. Under ERISA, employee benefit plans must be managed by named fiduciaries. In the absence of a plan fiduciary, participants and beneficiaries cannot obtain plan information, make investments or collect retirement benefits.
The Labor Department's current lawsuit against Lee resulted in a consent judgment and order approved by the court ordering Lee to appoint the Kenneth D. Anderson Co. Inc. of Concord, Mass., to locate the sole remaining former plan participant, properly distribute all remaining plan assets, properly prepare and file the plan's final Form 5500 with the Labor Department and the Internal Revenue Service, and then properly terminate the plan.
Lee is ordered to pay the company's fee for these services, provide proof of compliance to the department and fully cooperate with the company in its final administration of the plan. After properly terminating the plan, Lee will be permanently prohibited from ever again acting as a fiduciary to any ERISA-covered plan and must reimburse the Labor Department for the expense of serving him with the summons and complaint in this legal matter.
This legal action resulted from an investigation conducted by the department's Employee Benefits Security Administration (EBSA) Boston office. Employers and workers can contact that office at 617-565-9600 or toll-free at 866-444-3272 for help with any problems relating to private sector pension and health plans. In fiscal year 2009, EBSA achieved monetary results of $1.3 billion related to pension, 401(k), health and other benefits for millions of American workers and their families. Additional information can be found at www.dol.gov/ebsa.
Solis v. Yongsik Lee
Civil Action Number: 1:09-CV-10796-RWZ
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