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U.S. Labor Department sues Manchester, Conn., company and president to recover misused assets of employee 401(k) plan
Boston - The U.S. Department of Labor has sued Manchester Moving and Storage Inc., based in Manchester, Conn., and company president Frank N. Serignese for alleged misuse of more than $36,000 belonging to the employees of the company's 401(k) plan.
The lawsuit, filed in the U.S. District Court for the District of Connecticut, alleges that Serignese and the company violated the Employee Retirement Income Security Act (ERISA) between Jan. 29, 2005, and April 28, 2007, by failing to remit to the plan employee contributions and participant loan repayments. The company was the plan sponsor and plan administrator, while Serignese served as the plan's trustee. Both were fiduciaries to the plan with responsibility for collecting money and property owed to the plan, which was funded primarily through contributions withheld from employee paychecks.
The department's suit alleges that the defendants collected and used for the benefit of the company $31,709.94 in employee contributions and $4,318.21 in loan repayments belonging to the plan.
"This misuse of plan assets is a clear violation of ERISA," said Jean Ackerman, director of the Boston Regional Office of the Labor Department's Employee Benefits Security Administration (EBSA). "The law expressly requires plan assets to be used only for the benefit of plan participants and beneficiaries, and the Labor Department will not tolerate the misuse of plan assets for any other purpose."
The department's suit seeks a court order permanently barring Serignese from serving as a fiduciary or service provider to any ERISA-covered plan, requiring the company and Serignese to restore to the plan all losses incurred by their actions with interest and requiring them to correct their prohibited transactions.
The case was investigated by EBSA's Boston Regional Office. Employers and workers can contact that office at 617-565-9600 or may call EBSA's toll-free number, 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. Frank N. Serignese
Civil Action Number: 3:09-CV-01974-MRK
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