Date of Action: Sept. 10, 2014
Type of Action: Consent order and judgment
Name(s) of Defendant(s): David Kephart, Timothy Kephart, Kephart Trucking Co., and the Kephart Trucking Co. 401(k) plan
Allegations: Based on an investigation conducted by the U.S. Department of Labor’s Employee Benefits Security Administration, the Secretary of Labor filed a complaint alleging the following:
From September 2011 to September 2013, the defendants failed to ensure elective employee contributions and loan repayments to the plan were remitted on a timely basis. The amount of discretionary monies due to the plan participants, other than the defendants, was determined to be $238,576.
Resolution: The court approved a consent order and judgment requiring David Kephart and Timothy Kephart to restore $232,177 to the plan, and requiring any remaining individual account balances that David Kephart and Timothy Kephart have in the plan be used to offset against the losses. The remaining amounts due to the plan are to be restored by David Kephart and Timothy Kephart within 30 days of the filing of the judgment.
If David Kephart or Timothy Kephart declare bankruptcy during the payment period, they will not oppose any proof of claim the Secretary may file on any outstanding payments and they will not oppose any adversarial action the Secretary may file to make this debt declared non-dischargeable. Upon proof of payment, the Secretary shall assess a penalty of $46,435, which is 20 percent of the applicable recovery amount, against David Kephart and Timothy Kephart.
The order also removes David Kephart and Timothy Kephart as the plan trustees; appoints an independent fiduciary to administer and terminate the plan; and requires David Kephart and Timothy Kephart to pay the fees assessed by the independent fiduciary. Timothy Kephart and David Kephart also agreed to a permanent bar from serving as a trustee, fiduciary, advisor, or administrator to any employee benefit plan subject to the Employee Retirement Income Security Act of 1974.
Court: United States District Court for the Western District of Pennsylvania
Docket Number: 3:13-cv-00269-KRG
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.