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News Release

US Department of Labor sues Tucker, Ga.-based Distribution by Datagen to recover unremitted premiums and unpaid medical claims

TUCKER, Ga. – The U.S. Department of Labor has sued Distribution by Datagen Inc., formerly known as Depawix Health Resources Inc. of Tucker, and several companies and individuals involved in the imprudent marketing and operation of a Multiple Employer Welfare Arrangement, in violation of the Employee Retirement Income Security Act.

“Workers and their families have been saddled with unpaid health claims because of the improper actions of the defendants,” said Isabel Colon, regional director of the Employee Benefits Security Administration in Atlanta. “This legal action seeks to restore lost assets needed to pay the health claims of these workers.”

In addition to Distribution by Datagen, defendant companies named in the suit include Smart Services Inc., formerly known as Peck and Peck Inc., based in Atlanta; Benesmart Inc. and Gallagher Health Studies Inc., based in Stone Mountain; and Inspired by Coconut Inc. and Green Gables Artisan’s Cooperative Inc., based in Jacksonville, Fla. Individual fiduciaries named in the suit include Michael Purr, Ann Marie Purr, Grant Lockhart, Marlin Brett Dixon, Cheryl L. Clinton and Christopher Peck.

Filed in the U.S. District Court for the Northern District of Georgia-Atlanta Division, the complaint alleges that defendants offered part-time employment with Gallagher Health Studies for prospective Datagen plan participants, which consisted primarily of participating in an annual health assessment and communicating with a patient advocate regarding the participant’s health care for enrollment in Datagen’s self-insured health plan. The defendants also offered an additional part-time employment arrangement with Inspired by Coconut and Green Gables Artisan’s Cooperative for participants who incurred more than $1,500 in medical expenses during a four-week period. Participants in the part-time employment arrangement typically paid premiums of several hundred dollars per month for coverage under health insurance policies secured by Inspired by Coconut and Green Gables.

The additional part-time employment arrangement purportedly required participants to produce handcrafted items; however, participants could pay additional sums to have the work outsourced. After deducting premiums from participants’ accounts over several months, defendants failed to remit funds to the third-party administrator and to insurance companies, which resulted in approximately $250,000 in unpaid medical claims. The complaint alleges that defendants also misled participants by affirmatively promoting the Datagen plan as sound and viable, while they were aware that third-party administrator services and insurance coverage were being terminated for nonpayment, and health plan claims were unfunded.

As alleged in the complaint, many of the defendants have been ordered to cease and desist the unauthorized marketing and selling of insurance in Florida and Louisiana based on their practice of offering health insurance coverage for part-time employment, such as that alleged in the secretary’s complaint.

After the issuance of Florida’s cease and desist order, defendants did not cease marketing and offering insurance via purported part-time employment. Instead, it continued operations after merely changing the names of the entities and the plans. The complaint seeks recovery of the losses suffered by plan participants, a permanent bar against each defendant from serving as a fiduciary or service provider for employee benefit plans in the future, and appointment of a successor fiduciary, if necessary.

EBSA’s Atlanta Regional Office investigated the case. It is being litigated by the department’s Atlanta Regional Solicitor’s Office. Employers and workers can contact EBSA’s Atlanta office at (404) 302-3900 or toll-free at 866-444-3272 for help with problems relating to private sector retirement and health plans.

EBSA protects the retirement, health and other workplace-related benefits of America’s workers, retirees and their families. The agency oversees approximately 701,000 private sector retirement plans, 2.3 million health plans and other plans that provide benefits to more than 141 million Americans. Collectively, these plans hold more than $7.3 trillion in assets. For additional information, visit

Civil Action Number: 1:14-cv-00433
Perez v. Distribution by Datagen Inc.

U.S. Department of Labor news materials are accessible at 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.

Employee Benefits Security Administration
March 31, 2014
Release Number
14-326-ATL (58)