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U.S. Labor Department sues Kirkland, Wash., firm and officers over delinquent contributions owed to 401(k) plan
SEATTLE - Kirkland, Wash.-based Kineticsware Inc. and executives of the company were sued by the U.S. Department of Labor for allegedly failing to timely remit employee and matching employer contributions to the company's 401(k) plan.
The lawsuit follows an investigation by the department's Employee Benefits Security Administration into alleged violations of the Employee Retirement Income Security Act. The suit, filed in U.S. district court in Seattle, names as defendants the company's chief executive officer, Jeffrey Sampson, and its chief marketing officer, Richard Barnett.
The defendants allegedly failed to timely remit employee contribution to the company's 401(k) plan and to take action to collect employer matching contributions that were required under the rules of the plan.
Among other things, the suit alleges that the defendants caused Kineticsware Inc. to withhold at least $141,696 from employees' pay for salary reduction contributions to the plan from Nov. 30, 2007, through Oct. 31, 2008, but failed to remit the assets to the plan. In addition, the suit alleges from Nov. 30, 2007 through Oct. 31, 2008, that mandatory employer matching contributions in the amount of $72,296 due to the 401(k) plan remained uncollected.
The employee and employer contributions were retained and comingled with the assets of the company, and were used for purposes unrelated to the plan.
"Companies and their executives have an obligation to ensure that plan assets are held in trust to pay future benefits," said Jean Ackerman, director of EBSA's San Francisco Regional Office in California. "This case demonstrates our commitment to take legal action to protect workers' benefits."
This case is part of EBSA's employee contribution project to safeguard workers' contributions to 401(k) and health benefit plans. Employers and workers can reach EBSA's Seattle District Office at 206.553.4244 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa.
Solis v. Kineticsware
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