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Judge orders Minnesota-based Copy Cat Business Systems and former owners to repay more than $13,000 to company's SIMPLE IRA plan
MINNEAPOLIS – A federal district court in Minneapolis has granted the U.S. Department of Labor's motion for summary judgment requiring Copy Cat Business Systems Inc. and its former owners, Susan Blackford and Joel Blackford, to repay $13,218.76 in employee contributions and lost interest owed to the company's savings incentive match plan for employees individual retirement account. The court's decision resolves a lawsuit filed by the Labor Department against the defendants for alleged violations of the Employee Retirement Income Security Act.
The court ordered the defendants to restore $9,770 in voluntary employee contributions withheld from employees' wages from Jan. 1, 2003, through Dec. 31, 2006, and $3,448 in lost interest. The lawsuit alleged that the defendants failed to forward the contributions to the plan and used plan assets to pay the company's general operating expenses. The court rejected defendant Joel Blackford's defense that he was not named as a fiduciary to the plan. The court cited case law that imposes "functional" fiduciary liability on individuals who "are not named as fiduciaries but nonetheless exercise actual control over plan assets."
"The Blackfords knowingly allowed employee contributions to be used for the benefit of the company and did not uphold their obligations to ensure the plan was properly administered," said Steve Eischen, regional director of the Labor Department's Employee Benefits Security Administration in Kansas City, Mo. "We are pleased the court rejected the argument that only persons with formal plan positions are responsible for plan losses."
Copy Cat Business Systems Inc. sold and serviced office equipment in the Minneapolis-Saint Paul area until the company ceased operations in April 2007.
EBSA's Kansas City Regional Office conducted the investigation. Employers and workers can reach the office at 816-285-1800 or toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa.
Solis v. Blackford, Blackford, Copy Cat Business Systems Inc.
Civil Action Number: 09-2148
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