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Release Date: September 23, 2008
Release Number: 08-1334-BOS/BOS 2008-267
Contact Name: John M. Chavez
Phone Number: 617.565.2075
New Haven, Connecticut – The U.S. Department of Labor has sued the owner and operator of Fairfield Podiatry Associates LLC of Fairfield, Connecticut, seeking restoration of funds to the company’s 401(k) plan.
The Labor Department’s suit, filed in the U.S. District Court for the District of Connecticut, alleges that Anthony R. Iorio failed to discharge his fiduciary duties with respect to the plan between September 1, 2004, and February 21, 2007. The suit alleges that Iorio hired Jeffrey S. Lafferty and his company, Lafferty & Partners LLC, to provide investment and financial management services to the plan. During that time, Lafferty converted $96,274.93 of the plan’s funds for his own benefit.
Iorio allegedly failed to carry out his fiduciary responsibilities under the Employee Retirement Income Security Act (ERISA). He allegedly failed to adequately monitor and control Lafferty’s activities, oversee and control the plan’s assets, and secure a bond to protect the plan’s assets. The department’s suit asks the court to permanently bar Iorio from serving as a fiduciary to any employee benefit plan covered by ERISA, appoint an independent trustee to manage the plan and require Iorio to restore to the plan all losses with interest that resulted from his improper actions.
“Employers are responsible for keeping close watch over their workers’ benefit plans,” said James Benages, regional director of the Labor Department’s Employee Benefits Security Administration (EBSA) in Boston. “The department’s legal action in this case seeks to protect the assets of the workers’ benefit plan and prevent such misuse in the future.”
In August 2004, the New York Stock Exchange revoked Lafferty’s brokerage license as a result of his converting funds from his clients. On Sept. 27, 2007, Lafferty and his partner were indicted by a grand jury in New Jersey on conspiracy, money laundering, securities fraud, theft by deception and misapplication of entrusted property stemming from his conversion more than $500,000.00 from client firms.
The case was investigated by EBSA’s Boston Regional Office. 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.
Employers and workers can contact the EBSA office at 617.565.9600 or toll-free at 866.444.3272 for help with problems relating to private sector pension and health plans. Additional information can be found at www.dol.gov/ebsa.
Chao v. Anthony R. Iorio
Civil Action Number: 3:08-CV-1440-AWT
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