Suit seeks recovery of more than $1.6M in losses to employee profit-sharing plan after Illinois health care provider allegedly made improper distributions
CHICAGO The U.S. Department of Labor is suing an Illinois home health care provider alleging that the company, the profit-sharing plan and two of its trustees improperly authorized distributions of $1,601,908 in profit-sharing plan assets, in violation of the Employee Retirement Income Security Act.
The department's suit names Palos Hills-based Alliance Home Healthcare Inc.; the Alliance Home Healthcare Inc. Profit Sharing Plan; and company owners and plan trustees, Reginaldo Sulit and Dalisay Sulit.
The action alleges that the company President and Secretary/Treasurer, Dalisay Sulit and Reginaldo Sulit, respectively, and the company took distributions of more than $1 million, to which they were not entitled. The suit asserts that these plan withdrawals were not in the best interests of the participants and beneficiaries of the employee benefit plan, as required by the law. The withdrawn plan assets were used for non-Plan purposes, including directly benefitting the company.
"Plan funds must be invested in the interest of workers and retirees, not used to prop up a struggling firm," said Jeffrey Monhart, regional director of the department's Employee Benefits Security Administration in Chicago. "Too often, we see employee benefit plan funds used illegally by company owners and management, jeopardizing the financial security of workers and retirees."
Filed in the U.S. District Court for the Northern District of Illinois, Eastern Division in Chicago, the suit seeks the restoration of all related plan losses, including lost opportunity costs, and a court order requiring the defendants to account for and restore losses to plan participants.
The department is also seeking to permanently enjoin the defendants from serving as fiduciaries or service providers to any plan covered by ERISA. The suit requests the appointment of an independent fiduciary, who would be compensated at the company's expense, to distribute the plan's assets to participants and beneficiaries and to terminate the plan.
Alliance Home Healthcare established the plan on Jan. 1, 2000 to provide retirement benefits to eligible employees. As of Dec. 31, 2006 the last year an annual report was filed the plan had 127 participants and $1.6 million in assets. Alliance Home Healthcare provides skilled health care services to patients in their homes.
EBSA's Chicago Regional Office investigated the case, and the department's Regional Office of the Solicitor in Chicago is litigating it. Workers and employers with questions about benefit plans can contact a benefits adviser toll free at 866-444-3272 or online at http://www.dol.gov/ebsa/contactEBSA/consumerassistance.html.
Perez v. Alliance Home Healthcare Inc., Alliance Home Health Care Inc. Profit Sharing Plan, Reginaldo Sulit, Dalisay Sulit
Civil Action Number: 1:15-cv-07481