EBSA News Release: [03/27/2012]
Contact Name: Elizabeth Todd or Juan Rodriguez
Phone Number: (972) 850-4710 or x4709
Release Number: 12-0546-DAL
US Labor Department obtains court order to restore employee contributions to 401(k) plan of Stafford, Texas-based L.A. Utilities
STAFFORD, Texas The U.S. Department of Labor has obtained a consent judgment and order resolving a lawsuit filed against Stephen B. Hobbs, former chief financial officer of defunct L.A. Utilities Inc., for failing to forward employee contributions and loan repayments to the company's 401(k) plan in violation of the Employee Retirement Income Security Act.
"Plan officials have a duty to manage and protect employees' benefits and assets," said Roger Hilburn, director of the Dallas Regional Office of the Labor Department's Employee Benefits Security Administration. "The action taken in this case will restore plan assets that were not properly preserved for the company's workers."
The department's suit, filed in the U.S. District Court for the Southern District of Texas, Houston Division, was based on an EBSA investigation that found Hobbs had failed to timely and completely remit employee contributions and loan payments to the plan from Jan. 4, 2008, through Feb. 15, 2011.
The suit sought a court order to have Hobbs restore plan losses and interest totaling $24,380 as well as an injunction prohibiting him from ERISA violations. The consent judgment and order obtained by the department permanently bar Hobbs from serving as a fiduciary to any plan governed by ERISA in the future, and also require him to restore all plan losses and pay a penalty for the violations.
L.A. Utilities, which operated out of Stafford until it closed in February 2011, laid utilities lines for new construction.
For help with problems relating to private sector retirement health plans, employers and employees can call EBSA's Dallas office at 972-850-4500 or toll-free at 866-444-3272.
EBSA protects the retirement, health and other workplace-related benefits of America's workers, retirees and their families. The agency oversees approximately 708,000 private sector retirement plans, 2.8 million health plans and other plans that provide benefits to more than 150 million Americans. Collectively, these plans hold more than $6 trillion in assets. Additional information can be found at http://www.dol.gov/ebsa.
Solis v. Stephen B. Hobbs et al.
Civil Action Number 4:12-cv-00703