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Release Date: 07/30/2001
Release Number: 01-133
Contact Name: Jeannine Lupton
Phone Number: 206.553.7620
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Los Angeles, California - The U.S. Department of Labor
obtained a consent judgment on July 25, 2001, in federal court requiring
John N. Cowles, former chief financial officer of Avcon, Inc., to restore
$12,000 to the company’s 401(k) Plan. |
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The judgment also bars Cowles for six years from
serving as a fiduciary or service provider to any employee benefit plan
subject to the federal Employee Retirement Income Security Act. |
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Avcon, Inc., a California-based Delaware corporation,
was in the business of developing products that used magnetic levitation
bearing systems. |
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The judgment resolves a suit filed February 22, in
which the Labor Department alleged the defendants violated ERISA by
improperly handling plan assets. The complaint alleged that as chief
financial officer Cowles exercised discretionary authority for the
administration of the plan on behalf of Avcon, Inc., which included
deciding when to forward workers’ contributions along to the plan. |
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Avcon, Inc. and Cowles allegedly failed to forward
contributions withheld from employees’ paychecks to the company’s
401(k) plan. The defendants also were alleged to have delayed the
forwarding of employee contributions to the pension plan from March 6,
1996, until May 22, 1998. |
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Billy Beaver, director of Los Angeles Regional Office
of the department’s Pension and Welfare Benefits Administration, said,
“This case exemplifies our commitment to protect the hard-earned
benefits of workers. Workers can help us protect their plan benefits by
contacting our office at 626.583.7862 if they have questions or suspect
abuse of their pension, health or other benefit plans.” |
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The consent judgment was entered in federal district
court in the Central District of California. This case resulted from an
investigation conducted by the Los Angeles Regional Office of the Labor
Department’s Pension and Welfare Benefits Administration into alleged
violations of ERISA. |
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(Chao v. Cowles, et al.
Civil Action No. CV-01-1737 MMM (Mcx)) |
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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. |
