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Release Date: 12/31/2001
Release Number: III-01-12-31-150-PHL
Contact Name: Sharon Morrissey
Phone Number: 202.693.8664
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Philadelphia, Pennsylvania - The Department of
Labor obtained a consent judgment against National Recycling Institute,
Inc. (NRI) of Philadelphia and its owner requiring that they terminate the
company's profit-sharing plan and distribute the remaining assets to other
participants in the plan. The defendants allegedly used plan funds in
their own interest. |
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Defendant Stewart R. Golen, the plan's trustee, is to
pay the plan $8,930.04 no later than February 26, 2002, in addition to a
penalty to the Labor Department for 20 percent of the recovery as required
under the Employee Retirement Income Security Act (ERISA). The consent
judgment, entered December 28 in federal district court in Philadelphia,
also bars Golen and NRI from serving as fiduciaries to any ERISA-covered
employee benefit plan. |
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National Recycling was in the waste paper business and
ceased operations in approximately 1995. Its plan had 50 participants and
$28,318 in assets as of February 2001. |
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In its lawsuit, filed simultaneously with the consent
judgment on December 28, the department alleged that from November 1994
through April 1995, Golen signed checks against the plan's bank account
for approximately $45,000 payable to NRI and to Integrated Waste
Management, for which Golen served as chief executive officer. Since
December 1994, the plan allegedly maintained no records reflecting the
value or types of investments held by the plan, individual participant
account balances or earnings of the plan on its investments. |
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The suit further alleged that since December 31, 1994,
Golen sold the plan's investments in corporate securities and paid himself
or the companies he controlled the proceeds from the sales and did not
maintain records of these payments. The department further alleges the
plan's assets would have earned a greater return if they had been invested
prudently rather than in the non-interest bearing accounts in which Golen
maintained them. |
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(Chao v. Stewart R. Golen
Civil Action No. 01-CV-7148) |
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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. |
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