Date of Action: Sept. 10, 2013
Type of Action: Complaint
Names of Defendants: Brandy Williams, Wanda Knight, Dmazana Lumukanda, Lakes Area Advertiser Inc. 401(k) Plan and A.D.S. Delivery Service Inc. 401(k) Plan
Allegations: In February 2012, Phoenix Financial Holdings Inc. bought both Lakes Area Advertiser Inc. and A.D.S. Delivery Service Inc. located in Antioch, Ill. Williams, Knight and Lumukanda were the owners of Phoenix Financial Holdings Inc. from February 2012 through October 2012, until the companies ceased operations.
Between Feb. 29, 2012, and Aug. 1, 2012, Williams and Knight, both directors in the companies, failed to remit a total of $8,213.04 in employee contributions and loan repayments to the A.D.S. Delivery Service Inc. 401(k) Plan. The plan had six participants and incurred lost opportunity cost of $1,651.
Additionally, during the same time period, the defendants failed to remit a total of $26,621.31 in employee contributions and loan repayments to the Lakes Area Advertiser Inc. 401(k) Plan. The plan had 21 participants and incurred lost opportunity cost of $5,483.
Lumukanda, as named trustee of the Plan, improperly allowed the transfers from the Plan and is liable, as co-fiduciary, for such transfers.
Resolution: The complaint seeks to require the fiduciaries to correct the prohibited transactions in which they engaged or for which they are liable and to restore to the Plan any losses, including lost opportunity costs, resulting from their fiduciary breaches. Those total losses are estimated to be $41,968.35
It also asks the court to remove the defendants from their positions as fiduciaries to both the Lakes Area Advertiser Inc. and A.D.S. Delivery Service Inc., permanently enjoin the defendants from serving as fiduciaries or service providers to any employee benefit plan subject to the Employee Retirement Income Security Act and to appoint an independent fiduciary to terminate the plan and distribute its assets to qualified participants.
Court: United States District Court for the Northern District of Illinois, Chicago
Docket Number: 1:13-cv-06461
Employers and workers can reach Employee Benefits Security Administration toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Additional information can be found at www.dol.gov/ebsa.
U.S. Department of Labor 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.