ROCKVILLE, Md. — The U.S. Department of Labor has sued Sun Control Systems Inc., the estate of former company president John Buckingham Sr., and current president Thomas Buckingham, to restore assets to the company’s three employee benefit plans. This follows an Employee Benefits Security Administration investigation that revealed alleged violations of the Employee Retirement Income Security Act.
The suit alleges that from December 2007 through August 2010, the defendants permitted a series of transfers from the accounts of two profit-sharing plans and one 401(k) plan to satisfy corporate debt. Additionally, it is alleged that between January 2006 and November 2010, the defendants failed to remit employee contributions to the 401(k) plan and remitted certain contributions late, resulting in lost interest.
“These violations represent a clear breach of fiduciary duty,” said Marc Machiz, regional director of the EBSA in Philadelphia. “Employees should expect that their hard-earned savings will be properly managed when they contribute to retirement plans.”
Filed in the U.S. District Court for the District of Maryland, the suit seeks to restore to the plan all losses, including interest and opportunity costs. The suit also seeks to permanently bar the defendants from serving in a fiduciary capacity to any employee benefit plan covered by ERISA and to appoint an independent fiduciary to manage the plans.
The department’s legal action resulted from an investigation by EBSA’s Washington District Office. It is being litigated by the department’s Regional Office of the Solicitor in Philadelphia. Employers and workers can contact EBSA at 215-861-5300 or toll-free at 866-444-3272 for help with problems relating to private sector retirement and health plans. For more information, visit www.dol.gov/ebsa.
Solis v. Buckingham, et al.
Civil Action Number: 1:12-cv-03576
U.S. Department of Labor news materials are accessible at www.dol.gov. The information above is available in large print, Braille, audio tape or disc from the COAST office upon request by calling 202-693-7828 or TTY 202-693-7755.