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News Brief

US Labor Department sues Doylestown, Pennsylvania staffing company and its president to recover employee contributions owed to a 401(k) plan

Date of Action: April 17, 2015

Name(s) of Defendants: Steven F. Sonstein,  Cobalt Staffing Inc. and Cobalt Staffing Inc. 401(k) Plan

Allegations: Based on an investigation conducted by the Philadelphia Regional Office of the Employee Benefits Security Administration, the U.S. Department of Labor filed a complaint on April 17 against the defendants in the U.S. District Court for the Eastern District of Pennsylvania.   Steven Sonstein is the president of Cobalt Staffing Inc. and trustee of the company’s 401(k) plan.  The plan was established in 2011 and funded by elective payroll deferrals.  The complaint alleges that Sonstein and the company violated the Employee Retirement Income Security Act when they  commingled employee deferrals earmarked for deposit into the plan with the general assets of the company.  The complaint also alleges that these plan assets were used to pay for company expenses.  Further, when contributions were made to the plan, they were made late and without lost interest.

Resolution: The complaint seeks the appointment of an independent fiduciary with plenary authority over the management and administration of the plan; an order from the Court to provide the Secretary and the independent fiduciary with all records needed to administered the plan; an order requiring that the defendants restore all losses, including lost interest to the plan; and requirement that Sonstein forfeit his plan account balance to off-set plan losses.

Court: United States District Court for the Eastern District of Pennsylvania

Docket Number:  2:15-cv-02008-GAM

U.S. Department of Labor news materials are accessible at The department’s Reasonable Accommodation Resource Center converts departmental information and documents into alternative formats, which include Braille and large print. For alternative format requests, please contact the department at (202) 693-7828 (voice) or (800) 877-8339 (federal relay).

Employee Benefits Security Administration
May 1, 2015
Release Number
15-855-PHI (EBSA 15-032)
Media Contact: Joanna Hawkins
Media Contact: Leni Fortson