Printer Friendly Version
Release Date: August 4, 2008
Release Number: 08-1050-BOS/BOS 2008-221
Contact Name: John M. Chavez
Phone Number: 617.565.2075
Hartford, Connecticut – Trustees of the
James T. Farrell III Money Purchase Pension Plan in Hartford misused
more than $960,000 in plan assets to pay their personal expenses and
operating expenses of Farrell Associates in violation of the Employee
Retirement Income Security Act (ERISA), according to a lawsuit filed by
the U. S. Department of Labor.
The suit, filed in the U.S. District Court for the
District of Connecticut, alleges that trustee James T. Farrell III
improperly transferred those assets to a bank account in his and Nancy
Farrell’s names. It also alleges that Farrell attempted to conceal his
actions from plan participants by fabricating participant statements and
filing false Forms 5500 for plan years 2000 through 2003 with the
Department of Labor and the Internal Revenue Service.
Nancy Farrell violated her duties as a trustee when
she failed to ensure the plan’s assets were held in trust, thereby
making her liable as a co-fiduciary for the violations.
“The employees of Farrell Associates are counting
on this pension plan for their future retirement benefits,” said
Bradford P. Campbell, assistant secretary of the department’s Employee
Benefits Security Administration (EBSA). “The law is very clear that
plan assets cannot be used to pay personal and corporate expenses
unrelated to the operations of the plan.”
The suit seeks a court order to permanently bar the
defendants from serving as fiduciaries or service providers to any ERISA-covered
plan, restore all money owed to the plan with lost earnings, undo all
prohibited transactions, disgorge all profits gained as a result of
fiduciary breaches and appoint an independent fiduciary to be the plan’s
trustee. The suit asks the court to require the defendants to properly
calculate the benefit amounts of two participants and offset the
defendants’ own account balances to make the other participants whole.
Farrell Associates is in the business of financial
planning and sponsored the plan for four participants.
This legal action resulted from an investigation
conducted by EBSA’s Boston Regional Office. Employers and workers can
contact the Boston office at 617.565.9600 or toll-free at 866.444.3272
for help with any problems relating to private sector pension and health
plans. In fiscal year 2007, EBSA achieved monetary results of $1.5
billion related to pension, 401(k), health and other benefits for
millions of American workers and their families. Additional information
can be found at www.dol.gov/ebsa.
Chao v. James T. Farrell III and Nancy Farrell
Civil Action Number 3:08cv01126-RNC
U.S. Department of Labor news releases are accessible on the
Department's Newsroom
page. The information in this news release will be made available
in alternate format (large print, Braille, audio tape or
disc) from the COAST office upon request. Please specify which news release when
placing your request at 202.693.7828 or TTY 202.693.7755. The Labor Department is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit the
Department's Compliance
Assistance page.
|