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U.S. Labor Department obtains court order barring New York defendants from future dealings with employee benefit plans
New York – The U.S. Department of Labor has obtained a final consent order permanently barring Leonard Slutsky and Sharlene Slutsky from control over or serving in positions of responsibility to employee benefit plans governed by the Employee Retirement Income Security Act, except as outlined in the court order.
The defendants were sued by the department in 2001 for allegedly engaging in numerous violations of ERISA with regard to the Huntington, N.Y-based Mutual Employees Benefit Trust. MEBT was a multiple employer welfare arrangement that provided health and other welfare benefits to 1,912 participants in the Long Island and New York City areas.
Leonard Slutsky allegedly acted as a fiduciary to the MEBT plan. His wife, Sharlene Slutsky, was the owner and president of MEBT's third party administrator. The department's lawsuit alleged that they and other MEBT trustees diverted MEBT's assets to sham labor unions and corporations. The trustees were ordered to make restitution under a separate consent judgment.
The final consent order, entered in the U.S. District Court for the Eastern District of New York, also prohibits the Slutskys from providing or rendering to any employee benefit plan services of any kind, except in very limited circumstances, and from selling, leasing or otherwise transferring for a fee any interest in any property to any employee benefit plan.
"The prohibitions of this court order are all aimed at making sure these defendants never again have the opportunity to get their hands on the funds of any employee benefit plan," said Jonathan Kay, New York regional director for the Labor Department's Employee Benefits Security Administration, which administers ERISA. "Under the law, the assets of these plans are for the benefit of plan participants only, and any other use or diversion of plan funds will not be tolerated by the Labor Department."
This case resulted from an investigation by the New York Regional Office of the department's Employee Benefits Security Administration. Employers and workers can contact that office at 212.607.8600 or toll-free at 866.444.3272 for help with 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 http://www.dol.gov/ebsa.
Solis v. Slutsky
Civil Action Number: 01-CV-7593
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