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News Brief

Court orders Gulf Shores Marina LLC and fiduciaries to compensate GSM/RYS 401(k) Plan for failure to remit employee contributions

Date of Action: Aug. 4, 2015

Type of Action: Consent Judgment and Order

Name(s) of Defendant(s): Gulf Shores Marina LLC, Laura M. Prioli, Stephen C. Main, Kenneth A. Main II, and the GSM/RYS 401(k) Plan 

Allegations: The GSM/RYS 401(k) Plan was established by Gulf Shores Marina LLC, based in Naples, Florida, for the benefit of its employees with an effective date of Jan. 1, 2009. The plan permitted participants to contribute a portion of their pay to the plan through payroll deductions, along with participant loans, which could also be repaid through payroll deductions. Based on an investigation conducted by the U.S. Department of Labor’s Employee Benefits Security Administration, the secretary of labor filed a complaint on Sept. 16, 2014, alleging that during the period from Oct. 9, 2009 through Sept. 21, 2012, a total of $111,211in employee elective deferral contributions, and a total of $16,745 in participant loan repayments, was withheld from employee participants’ pay. With respect to those amounts, the complaint alleged that the defendants failed to segregate the withheld employee contributions from company assets as soon as they reasonably could do so, and that the defendants never remitted $67,600 in employee elective deferral contributions to the plan’s trust. The complaint further alleged that the defendants caused or allowed the commingled funds to be used for the company’s purposes and obligations rather than for the exclusive benefit of the plan and its participants, failed to take action to fully restore losses to the plan, and did not carry a fidelity bond as required.

Resolution: On Aug. 4, U.S. District Judge James Moody, Jr., ordered the defendants be permanently enjoined from violating the provisions of Title I of Employee Retirement Income Security Act and from acting as fiduciaries, trustees, agents, or representatives in any capacity to any employee benefit plan, as defined by ERISA. Additionally, Judge Moody ordered the defendants to make restitution to the plan in the amount of $39,962 to be allocated to the accounts of all plan participants and beneficiaries, with the exception of the plan accounts belonging to defendants Prioli, S. Main, and K. Main. Moreover, the judge also appointed AMI Benefit Administrators Inc., as independent successor fiduciary to the plan in order to collect, marshal, and administer the plan and take further actions with respect to the plan, including terminating the plan. The judge’s order requires the defendants to pay AMI a retainer of $1,850 within 10 days of the entry of the order and to reimburse the plan for AMI’s reasonable fees and expenses with respect to services performed for the plan.

Court: U.S. District Court for the Middle District of Florida, Tampa Division

Docket Number: 14-cv-02318-JSM-EAJ

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Employee Benefits Security Administration
August 18, 2015
Release Number
15-1632-ATL (252)
Media Contact: Michael D'Aquino
Media Contact: Lindsay Williams
Phone Number