Date of Action: July 29, 2014
Type of Action: Consent Judgment and Order
Names of Defendants: Nickson’s Machine Shop Inc.; Dennis W. Leal; Nickson’s Machine Shop 401(k) Savings Plan
Allegations: The department filed a complaint against Nickson’s Machine Shop Inc., its president Dennis Leal, and the Nickson’s Machine Shop 401(k) Savings Plan on Jan. 10, 2014, alleging that between July 2006 and July 2011, the Santa Maria, Calif., company and Leal caused $47,745 in employee contributions and participant loan payments to be withheld from employees’ paychecks but failed to remit these amounts to the plan’s trust account. The department further alleged that the money was retained and commingled in the company’s general assets and used for non-plan purposes.
Resolution: The consent judgment orders the company and Leal to restore $59,316 in losses and lost opportunity costs to the plan in monthly installments over the next five years. In addition, the judgment removes the company and Leal as the plan’s fiduciaries, appoints Receivership Management Inc. as the independent fiduciary to the plan, and requires the company and Leal to pay all reasonable fees and costs associated with the independent fiduciary. The judgment also imposes a civil penalty of $11,863 on the company and Leal following the full restoration of the loss amounts, and permanently enjoins Leal from serving as a fiduciary of, or service provider to, any ERISA-covered employee benefit plan in the future.
Court: U.S. District Court for the Central District of California
Docket Number: 2:14-cv-00235-SVW-E
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