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EBSA News Release: [08/05/2008]
Contact Name: Gloria Della or Rick Manning
Phone Number: (202) 693-8664 or x4676
Release Number: 08-0667-NEW
U.S. Labor Department obtains judgment of nearly $1.8 million
against New York company
HUNTINGTON, N.Y. — The U.S. Department of Labor has obtained a default judgment requiring Huntington, N.Y.-based Mutual Association Administrators (MAA) to restore nearly $1.8 million to the Mutual Employees Benefit Trust (MEBT) and permanently barring the firm from providing service to plans covered by the Employee Retirement Income Security Act (ERISA) in the future. The judgment resolves a lawsuit filed by the department.
"This department is relentless in pursuing justice and compensation for workers and their families whose benefit plans have been plundered," said U.S. Secretary of Labor Elaine L. Chao. "In this case the court has ordered restoration of $1.8 million to the benefit trust and permanently barred the defendants from ever again being involved in the management of an ERISA-covered plan."
Mutual Employees Benefit Trust is a multiple employer welfare arrangement that provided health and other welfare benefits to 1,912 participants. Mutual Association Administrators was the plan administrator to MEBT.
The judgment requires MAA to pay $1,779,111 in restitution. The department sued the defendants on Nov. 15, 2001, alleging that they and 14 other MEBT trustees diverted the trust's assets to sham labor unions and the corporate defendants.
On May 4, 2002, the department obtained a preliminary order requiring four of the trustees to resign, barring Leonard and Sharlene Slutsky, Clark Hower, Marketing Motivation Associates Inc., Netscor Inc., VCT Financial Services Inc. and Mutual Association Administrators Inc. from serving or exercising control over any ERISA-covered plan, and appointing an independent fiduciary to oversee MEBT. Under prior consent orders, the court ordered restitution to the plan and permanently barred MEBT's owner Susan Fisher from serving as a trustee or in any official capacity to any ERISA-covered plan.
The default judgment, entered in federal district court in Central Islip, N.Y., resulted from an investigation by the New York Regional Office of the Employee Benefits Security Administration. Employers and workers can reach the New York office at 212-607-8600 or toll-free at 866-444-3272 for help with problems relating to private sector pension and health plans.
Chao v. Slutsky
Civil Action Number 01-7593
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