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Atlanta, Georgia - The U.S. Department of Labor
has sued now-closed Mitchell Molding Company Inc., Hebron, Kentucky, and its
bankrupt former owner to recover $5,870 in delinquent employee
contributions to the company’s 401(k) plan.
“This action demonstrates the department’s
commitment to protect the benefits of America’s workers,” said Joseph
Menez, director of the department’s Cincinnati regional office of the
Employee Benefits Security Administration (EBSA).
The lawsuit alleges that Mitchell Molding and John P
Chalfant of Ft. Mitchell, Kentucky, violated the Employee Retirement Income
Security Act (ERISA) when they failed to timely remit employee
contributions to the plan at various times between January 6 and June 29,
2000, and to remit any employee contributions made between July 6, 2000
and March 27, 2003. Additionally, the suit alleges that the defendants
didn’t segregate plan assets from those of other funds, ensure plan
assets were received by the plan and obtain a fidelity bond as required by
law.
The suit seeks to require that the company and Chalfant
restore all losses, including interest or lost opportunity costs, to the
plan. It also asks the court to permanently bar Chalfant from service to
any plan governed by ERISA and to appoint an independent fiduciary to
manage the plan, terminate it and distribute the assets.
Mitchell Molding was in the business of plastic
injection molding. The 401(k) plan covered five participants and had
assets of $8,455 as of March 31, 2004.
Employers with similar problems, who are not yet the
subject of an investigation by EBSA, may be eligible to participate in the
department’s Voluntary Fiduciary Correction Program (VFCP).
Participation in the VFCP requires employers to correct violations of the
law but allows them to avoid EBSA enforcement actions and civil penalties
as well as any applicable excise taxes. For more information about the
VFCP, see www.dol.gov/ebsa.
The case resulted from an investigation conducted by
the EBSA’s Cincinnati regional office. Employers and workers can reach
the Cincinnati office at 859.578.4680 or through EBSA’s toll-free
number, 1.866.444.EBSA (3272), for help with problems relating to
private-sector retirement and health plans.
(Chao v. Mitchell Molding Company, Inc.)
Civil Action No. 05-235-DLB |
