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US Labor Department sues Woodland Hills, Calif., company and president to protect 401(k) assets
PASADENA, Calif. – The U.S. Department of Labor has sued Sophisticated Technologies Inc., a defunct system design and software company in Woodland Hills, Calif., and former president Moshe Klein for failure to protect $26,825 in employee contributions plus lost opportunity costs owed to the company’s 401(k) plan.
“This suit seeks to protect workers’ contributions made from their hard-earned paychecks,” said Crisanta Johnson, the Los Angeles regional director of the department’s Employee Benefits Security Administration. “Often these plans are workers’ most important vehicle for funding retirement benefits, and we are committed to take action to ensure that plan funds are available to workers as they prepare for their retirement.”
Filed in the U.S. District Court for the Central District of California in Los Angeles, the lawsuit alleges that Sophisticated Technologies and Klein failed to forward to the plan at least $26,825 in employees contributions, comingled plan assets with those of the company’s accounts and used the assets for purposes unrelated to the plan. In addition, the defendants failed to administer the plan after the company ceased operations in 2005, leaving former employees unable to access their retirement savings. The department estimates that the total owed to the plan is approximately $45,000.
The suit also seeks to remove Klein as a plan fiduciary and prevent him from serving as a fiduciary or service provider to benefit plans covered by the Employee Retirement Income Security Act in the future, as well as to appoint an independent fiduciary to distribute the remaining plan assets to participants and beneficiaries and terminate the plan.
This case is part of EBSA’s employee contribution project to safeguard workers’ contributions to 401(k) and health benefit plans. Employers and workers with questions or concerns regarding their private sector pension and health plans can contact EBSA’s Los Angeles Regional Office, located in Pasadena, at 626-229-1000 or toll-free at 866-444-3272. Information is also available on the agency’s website at http://www.dol.gov/ebsa.
Solis v. Sophisticated Technologies Inc.
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