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Release Date: October 30, 2006
Release Number: 06-1857-NEW/BOS 2006-311
Contact Name: John M. Chaviz
Phone Number: 617.565.2075
New York, New York - The U.S. Department of
Labor has sued to obtain court appointment of an independent fiduciary
to manage the abandoned 401(k) profit sharing plan of the Mineola, New
York-based Hagedorn Actuarial Services Inc. The suit also seeks to
distribute more than $48,000 in plan assets to eligible participants and
beneficiaries.
The department’s lawsuit alleges that a successor
fiduciary was not appointed after plan trustee, William Lambiase,
pleaded guilty to embezzlement of $16,000 in plan assets in August 2005.
Since that time, the plan’s participants and beneficiaries have been
unable to gain access to or obtain information about their individual
account balances.
Plans become “orphan plans” when they are
abandoned by all fiduciaries designated to manage and operate them and
their assets. The plan had two participants and, as of August, 2006,
approximately $48,446 in assets being held by custodian American Funds
Group.
“The department took legal action to ensure that
the participants receive their promised benefits,” said Jonathan Kay,
director of the regional office in New York of the department’s
Employee Benefits Security Administration (EBSA), which investigated the
case.
The department’s suit asks the U.S. District Court
for the Eastern District of New York to appoint an independent fiduciary
to administer the plan, distribute plan assets to participants and
beneficiaries, and oversee the plan’s termination.
In fiscal year 2005, EBSA achieved monetary results
of $1.7 billion related to the pension, 401(k), health and other
benefits for millions of American workers and their families. Employers
and workers can contact the New York regional office at 212.607.8600 or
EBSA’s toll free number at 1.866.444.EBSA (3272) for help with
problems relating to private-sector retirement and health plans.
(Chao v. Hagedorn Actuarial Services, Inc. 401(k)
Profit Sharing Plan)
Civil Action Number: CV 06-5733 (EDNY)
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