Fresno, California – The U.S. Department of Labor has sued Explore General Inc. and its officers for allegedly failing to forward more than $70,000 in employee contributions and to collect more than $100,000 in employer contributions owed to the company’s 401(k) plan in violation of the Employee Retirement Income Security Act.
The lawsuit, filed in the U.S. District Court for the Eastern District of California, alleges that the company, Jaime Gonzalez and Paul Gong failed to timely segregate and remit to the plan employee contributions for the period from January 2002 through about March 2005. At the time of the violations, Gonzalez was the owner and president of the company.
Gonzalez and the company allegedly co-mingled the employee contributions with the general assets of the company and used the money to pay general operating expenses of Explore General. In addition, Gonzalez, and Gong, the plan’s primary plan administrator, allegedly violated the law by imprudently administering the plan.
The suit seeks a court order to require that Gonzalez and the company restore to the plan all losses with interest, remove the company as a plan fiduciary, and permanently bar Gonzalez and Gong from serving as fiduciaries or service providers to any plan governed by ERISA. The suit also seeks to re-establish the plan to collect employer contributions and lost-opportunity income, and to appoint an independent fiduciary to administer the plan and, if appropriate, distribute plan assets.
“Plan officials have a duty to manage and protect employees benefit plans and their assets,” said Juliane Majette, acting director of the San Francisco Regional Office of the department’s Employee Benefit Security Administration, which investigated this case. “Our action today is designed to restore plan assets that were not properly preserved for the company’s workers.”
Employers and workers can reach EBSA’s San Francisco office at 415.625.2481 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans. In fiscal year 2009, EBSA achieved monetary results of $1.3 billion related to pension, 401(k), health and other benefits for millions of American workers and their families. Additional information can be found at http://www.dol.gov/ebsa.
Solis v. Explore General Inc.
Civil Action Number 1:10-CV-01157-AWI-SKO
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