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US Labor Department settles dispute with former Tampa, Fla., pharmaceutical corporation over retirement plan assets
TAMPA, Fla. – The U.S. Department of Labor has obtained consent judgments requiring Medipharm-Rx Inc. and two 401(k) plan administrators to restore more than $10,000 in losses incurred by the company’s 401(k) plan.
The judgments follow an investigation by the Labor Department’s Employee Benefits Security Administration into alleged violations of the Employee Retirement Income Security Act. In the lawsuit being resolved, the Labor Department alleged that the defendants failed to forward to the plan contributions deducted from employees’ paychecks, terminate the plan when the pharmacy ceased operations in January 2007, obtain an adequate fidelity bond for the plan and file required reports concerning the plan.
Filed in the U.S. District Court for the Middle District of Florida, Tampa Division, the consent judgments require that defendants Brian Green and Medipharm-Rx pay $10,153.57 to the plan for the benefit of plan participants and beneficiaries, and $2,030.71 to the Labor Department as a penalty.
Additionally, defendant Grady Morrell will pay $2,030.71 to the plan for the benefit of plan participants and beneficiaries plus $1,500 to cover fees and costs of the successor fiduciary. Morrell also waived his right to receive restored contributions and interest to his plan account for calendar year 2006, estimated to be $1,069.40, and agreed to allow any interest he may have in any existing or future assets of the plan to be applied as an offset against the amounts due to the plan.
All defendants agreed to be permanently barred from acting as fiduciaries of any plan covered by ERISA. Larry Lefoldt was appointed as successor fiduciary to the plan.
“The Labor Department is pleased to resolve this case and have the defendants restore funds to the plan for the benefit of its participants and beneficiaries,” said R.C. Marshall, EBSA’s regional administrator in Atlanta, Ga.
Employers with similar problems who are not yet subjects of EBSA investigations may be eligible to participate in the department’s Voluntary Fiduciary Correction Program. Participation requires employers to make workers whole but allows them to avoid EBSA enforcement actions and civil penalties as well as applicable excise taxes.
Employers and workers can reach EBSA’s Atlanta Regional Office at 404-302-3900 or toll-free at 866-444-3272 for help with problems relating to private sector retirement and health plans. For more information, see http://www.dol.gov/ebsa.
Solis v. Medipharm-RX Inc.
Civil Action File Number 8:10-cv-569-T-33TBM
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