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News Brief

US Labor Department secures judgment against fiduciary to the Draeger Construction Inc. employees’ benefits plan in Nevada and California

Date of action:  January 29, 2016

Type of action:  Consent Judgment and Order

Name of defendants: Draeger Construction Inc., Draeger Construction LLC, Draeger Construction Inc. Health and Welfare Plan, and Jeffrey Draeger, an individual

Allegations: Based on an investigation conducted by the U.S. Department of Labor’s Employee Benefits Security Administration, the department filed a complaint on October 8, 2015 alleging that the defendants withheld employee contributions from plan participants’ weekly paychecks and failed to remit the amounts to the company’s health plan. Instead, they retained and comingled those assets within the company’s general banking account for non-plan purposes. The defendants also received COBRA payments from participants but failed to forward the amounts to the plan. As a result, the health insurance was retroactively cancelled, leaving some employees with large, unpaid medical expenses.

Resolution: Defendant Jeffrey Draeger has been found liable for plan losses and uncovered medical claims stemming from his alleged fiduciary breaches. The judgment orders him to pay $31,679 in plan losses in the form of outstanding employee contributions to the plan. He has also been ordered to pay $62,494 in plan participants’ uncovered medical claims resulting from their loss of health insurance due to the nonpayment of premiums by plan fiduciaries. Draeger shall be assessed a penalty of approximately $19,000. The judgment permanently enjoins Draeger from engaging in any further violations of the Employee Retirement Income Security Act and permanently bars him from serving as a fiduciary or service provider to any ERISA-covered employee benefit plan.  

Court: United States District Court for the Northern District of California

Docket Number: CV 15-4668 BLF

Employee Benefits Security Administration
February 11, 2016
Release Number
Media Contact: Jose Carnevali