EBSA News Release: [03/10/2011]
Contact Name: Michael Wald or Michael D’Aquino
Phone Number: (404) 562-2078 or x2076
Release Number: 11-0245-ATL
US Labor Department obtains judgment requiring repayment of $1.25 million to defunct Florida home health care company’s 401(k) plan
TAMPA, Fla. The U.S. Department of Labor has obtained a court judgment requiring Floyd Seibert to repay $1,253,661 to the Central Home Care Services Inc. and Affiliates 401(k) plan. The judgment resolves a lawsuit filed by the department after an investigation by its Employee Benefits Security Administration determined that the defendant had violated the Employee Retirement Income Security Act.
In its suit, the department alleged that Seibert owner and president of now defunct Central Home Care Services Inc., and therefore a fiduciary of its employee pension plan engaged in prohibited transactions with another company he controlled, Health Care International Holdings Inc. The U.S. District Court for the Middle District of Florida, Tampa Division has issued an order that Seibert's own plan account balance of more than $500,000 be offset against the amount of the losses owed to the plan.
In 2007, Seibert pleaded guilty in a related criminal case and was sentenced to 46 months in federal prison and three years of supervised release for embezzlement from his company's pension plan and Medicare fraud. The judge overseeing that case ordered Seibert to pay more than $3 million restitution regarding the pension fund. The restitution announced today represents interest owed on the earlier judgment already enforced against Seibert.
"The Labor Department applauds the court's action to hold Floyd Seibert personally responsible for losses suffered by the plan," said Phyllis C. Borzi, assistant secretary of labor for EBSA. "Our legal action sends a clear message that the department will not tolerate fiduciaries who misuse plan assets for their own gain."
The court rejected the defendant's defenses, including his arguments that the Federal Rules of Evidence prevented the court from considering admissions of the defendant in his criminal plea agreement on embezzlement charges.
Central Home Health Care Services provided home health care services in Central Florida until it ceased operations.
This case was litigated by the Labor Department's regional solicitor's office in Atlanta. Employers and workers can ask for assistance with problems related to private sector retirement and health plans by calling EBSA's regional office at 404-302-3900 or contacting EBSA toll-free at 866-444-3272. For more information, visit http://www.dol.gov/ebsa.
Solis v. Floyd W. Seibert
Civil Action File Number 8:09-cv-01726-VMC-AEP