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Release Date: 07/29/2002
Release Number: 291
Contact Name: Gloria Della
Phone Number: 202.693.8666
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Chicago, Illinois - The U. S. Department of Labor sued Advanced
Duplicating & Printing, Inc. in Minneapolis, Minnesota, and its owner on July
17, 2002 for failing to remit $50,098.69 in employee contributions and loan
payments to the 401(k) plan during his tenure as a trustee. |
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“Plan officials have a duty to properly manage both plans
and their assets in a way that benefits employees,” said Kansas City Regional
Director Gregory Egan. “Our action today is designed to restore to the
plan assets that were improperly used to benefit the employer.” |
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The Labor Department lawsuit, filed in federal district
court in Minneapolis, Minnesota, alleges that Charles Rolfes violated the Employee
Retirement Income Security Act (ERISA) by failing to remit employee
contributions and loan payments to the plan over the period January 2000 to
October 2001 and commingling the plan’s assets with those of the company.
Rolfes also allegedly failed to obtain a fidelity bond as required by law. |
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The department’s suit seeks to require that Rolfes
restore the plan’s assets with interest, forfeit his plan account to restore
the plan’s losses, undo the prohibited transactions, and obtain a fidelity
bond in an appropriate amount for the plan assets held in trust. The suit
also asks the court to permanently bar Rolfes from serving as a fiduciary to any
ERISA-covered plan in the future and to appoint an independent fiduciary to
manage the Advanced Duplicating 401(k) Plan. |
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Advanced Duplicating & Printing filed for Chapter 11
bankruptcy on January 12, 2001 and ceased business operations in June of that year.
The plan covered as many as 44 participants and had $1,088,534 in assets as of
December 31, 1999. |
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The suit resulted from an investigation conducted by the
Kansas City Regional Office of the department’s Pension and Welfare Benefits
Administration (PWBA). |
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Egan noted that employers with similar problems, who are
not yet the subject of an investigation by PWBA, may be eligible to participate
in the Department's Voluntary Fiduciary Correction Program (VFCP). Participation
in the VFCP requires employers to make workers whole but allows them to avoid
PWBA enforcement actions and civil penalties as well as any applicable excise
taxes. |
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"The VFCP gives plan sponsors a way to come into
compliance with ERISA by restoring workers' benefits while avoiding an
investigation by PWBA, said Egan. It protects workers' health and
retirement benefits and allows us to focus our resources on those who seek to
avoid compliance." |
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Employers and workers can reach the Kansas City Regional
Office at 816.426.5131 or PWBA’s Toll-Free Employee & Employer Hotline number,
1.866.275.7922, for help
with any problems relating to private-sector pension and health plans.
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(Chao v. Rolfes
Civil Action No. 02-1770 PAM/RLE) |
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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. |
