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Release Date: 06/27/2001
Release
Number: 01-110
Contact Name: Rita Ford
Phone Number: 202.219.8921 |
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Atlanta, Georgia - The U.S. Department of
Labor sued Dylan Mortgage Brokers, Inc. of Wilmington, North Carolina, and trustees of
the corporation's 401(k) and health plans on June 25 for failing to remit
$48,379.42 of employee contributions to the corporation's 401(k) and health
plans. |
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Dylan Mortgage is a mortgage lender for people
with imperfect credit records. The corporation was formerly known as Chase
Mortgage Brokers, Inc. The company's 401(k) plan covered 21 participants and
had a total of $64,076 in plan assets as of December 31, 1997. The
health plan provides group medical and pharmaceutical coverage to 106
participants and beneficiaries. Benefits were funded through stop loss
insurance until the policy lapsed. |
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The lawsuit alleges Dylan Mortgage and Clarence M.
Caviness violated the Employee Retirement Income Security Act (ERISA) by
failing to:
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Segregate and remit $20,779.57 in employee contributions to the
401(k) plan and instead used the money to pay the operating expenses of the
Dylan Mortgage
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Remit $24,228.37 in contributions to the health plan, which
resulted in the lapse of the plan's stop-loss insurance policy
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Secure a fidelity bond for the health plan as required by
law.
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The department's lawsuit seeks to require that the
defendants: restore to the plans all losses, including interest or lost
opportunity costs, which occurred as a result of their improper actions and to
correct all prohibited transactions; offset any restitution or other monetary
recovery that they may be ordered to pay against any claims that they may have
against the plans, including claims for benefits; and be removed from their
positions as plan fiduciaries. It also requires that a successor trustee and
administrator be appointed to take over the operation of the plans, distribute
any proceeds returned to the plans and, if necessary, terminate the
plans. |
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"Our goal is to ensure that consumers know that
the department is committed to protect the benefits promised by employers,"
said Howard Marsh, director of PWBA's Atlanta Regional Office. "Employers and
workers can reach us at 404.562.2156 for help with any problems relating to
private-sector pension and health plans." |
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The department's lawsuit resulted from an
investigation by the Atlanta Regional Office of the Pension and Welfare
Benefits Administration into violations of ERISA It was filed in the federal
district court in Wilmington, North Carolina. |
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(Chao v. Dylan Mortgage Brokers, Inc.
Civil
Action No. 7:01-CV-117-F-1) |
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U.S. Department of
Labor news releases are accessible on the Internet. The information in this
news release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing your
request. Call 202.693.7773 or TTY 202.693.7775. |
