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Secretary of Labor Thomas E. Perez
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News Release

EBSA News Release: [03/11/2009]
Contact Name: Leni Fortson
Phone Number: (215) 861-5102
Release Number: 09-0229-PHI

U.S. Department of Labor sues Bridgeport, Pa., benefit firms and lawyers to protect welfare benefit plan participants nationwide

BRIDGEPORT, Pa. – The U.S. Department of Labor has sued Penn-Mont Benefit Services Inc. of Bridgeport; its owner, John Koresko V; Koresko's law firms; and an attorney for the firms over alleged improper administration of death benefit plans marketed nationwide. The defendants allegedly underpaid benefits to participants, improperly withdrew more than $1 million in plan assets from the plans' trust, and illegally used assets to pay unreasonable and unnecessary lobbying expenses.

The defendants allegedly violated the Employee Retirement Income Security Act (ERISA) regarding more than 100 welfare benefit plans that participated in the Master Trust for the Regional Employers Assurance Leagues Voluntary Employees’ Beneficiary Association (REAL VEBA) and the Master Trust for the Single Employer Welfare Benefit Plan (SEP). 

Among others, the suit names Jeanne Bonney, an attorney with the law firms, Penn Public Trust, a company related to Koresko, and the plans' trustee, Community Trust Co. of Camp Hill, Pa. At the time of the alleged improper actions, Penn-Mont was the plans' administrator. The plans were sponsored by employers throughout the United States and offered death benefits or other welfare benefits to employees.

An investigation conducted by the Labor Department's Employee Benefits Security Administration (EBSA) determined that Penn-Mont failed to properly pay full death benefits to the families of deceased participants and unlawfully withdrew from the trusts more than $1 million, which was subsequently deposited in bank accounts belonging to Penn-Mont, the law firms and Penn Public Trust. In addition, plan assets were used to pay for unreasonable and unnecessary lobbying activities.

Filed in the U.S. District Court for the Eastern District of Pennsylvania, the suit seeks full restitution and accounting of the plan assets by a special master appointed by the court. The suit also asks that the defendants be removed as fiduciaries and service providers, and replaced by new fiduciaries for the plans.

Workers and employers can contact EBSA's Philadelphia Regional Office at 215-861-5300 or toll-free at 866-444-3272 for help with problems relating to private sector pension and health plans. In fiscal year 2008, EBSA achieved monetary results of $1.2 billion related to pension, 401(k), health and other benefits for millions of American workers and their families. Additional information about the agency is available at www.dol.gov/ebsa.

Solis v. Koresko
Civil Action Number 2:09-cv-00988