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Federal Court Orders Defunct Online Casino and Sweepstakes Company To Pay Former Employees $99,807 to Restore Health Plan Losses
SAN FRANCISCO, CA – The U.S. District Court for the District of Nevada has approved a default judgment against the now-defunct company Kizzang LLC and its president Robert Alexander, that requires them to pay $99,807 to former employees and their beneficiaries for violations of the Employee Retirement Income Security Act (ERISA) related to their employee health and welfare plan.
After an investigation by the Department’s Employee Benefits Security Administration (EBSA), the Department’s Office of the Solicitor filed a complaint on Aug. 17, 2018, and an amended complaint on Oct. 10, 2018, alleging that the Kizzang LLC Health Plan’s fiduciaries failed to forward employee contributions to the plan. EBSA found the defendants also failed to pay their share of health insurance premiums, and did not provide participants with timely notice that they risked losing their insurance coverage. Those failures led to the retroactive cancellation of the employees’ health insurance, leaving some employees and their beneficiaries with large, unpaid medical expenses.
“The U.S. Department of Labor is committed to protecting the benefits of America’s workers,” said Employee Benefits Security Administration Regional Director Klaus Placke in San Francisco, California. “We will continue to aggressively pursue and hold accountable those who misuse assets intended for health insurance purposes.”
The default judgment orders Kizzang LLC and Alexander – former operators of an online casino, gaming and sweepstakes company based in Las Vegas, Nevada – to pay $83,389 in plan participants’ uncovered medical claims resulting from the loss of health insurance they suffered due to the fiduciaries’ nonpayment of premiums. The court has also ordered the defendants to pay $16,418 in plan losses in the form of outstanding employee contributions. In addition, court order permanently enjoins the defendants from engaging in further ERISA violations and permanently bars Alexander from serving as a fiduciary or service provider to any ERISA-covered employee benefit plan.
ERISA requires fiduciaries operate employee benefit plans solely in the interest of participants and beneficiaries. Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans.
EBSA’s mission is to assure the security of the retirement, health and other workplace related benefits of America's workers and their families. EBSA accomplishes this mission by developing effective regulations; assisting and educating workers, plan sponsors, fiduciaries and service providers; and vigorously enforcing the law.
The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.