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Release Date: 03/01/2004
Release Number: 04-299-DAL
Contact Name: Gloria Della
Phone Number: 202.693.8664
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Tulsa, Oklahoma - The U.S. Department of Labor
has sued the fiduciaries of Tulsa-based Provider Medical Trust for taking
excessive fees and misrepresenting the trust’s solvency thereby causing
the health trust millions of dollars in losses. |
“This
Administration is committed to aggressively enforcing the law and
protecting the health benefits promised to workers and their families,”
said Secretary of Labor Elaine L. Chao. “Last year, the Department of
Labor achieved record results; more than $1 billion dollars was recovered
to pay pension, 401k, health and other benefits promised to America’s
workers.” |
The
department sued Robert Johnson, Jr., Bernard J. Westhoff , Mark Wright,
Johnson Brokers and Administrators LLC and Johnson Benefit Administrators
LLC. Johnson, Westhoff and Wright held a variety of positions in the named
entities, including serving as fiduciaries to the trust. The plan
administrator was owned by the fiduciaries, with Robert Johnson and
Johnson Brokers and Administrators LLC being the majority owners. |
According
to the suit, the defendants caused the trust to pay excessive service fees
to the administrator and misrepresented the trust’s solvency since
January 1, 1996. As the solvency of the trust became impaired, its
financial filings identified solvency shortfalls as “prepaid
administrative fees,” “prepaid administrative expenses” and/or “prepaid
actuary fees.” The fiduciaries’ misrepresentations allowed them to
meet state insurance solvency requirements and to continue to market the
trust, thus concealing its true financial condition. |
Provider Medical Trust is a multiple employer welfare
arrangement (MEWA) that covered 6,219 participants and had $7,793,266 in
assets, according to the latest financial report available to the
department. Johnson Benefit Administrators, which is no longer in
business, controlled PMT and managed approximately 45 self-funded single
employer group plans. |
The
suit seeks the removal and a permanent bar against the fiduciaries serving
any employee benefit plan governed by the Employee Retirement Income
Security Act (ERISA). The suit also asks that the fiduciaries provide an
accounting of the excessive fee charges and to restore misused funds. The
case was filed in federal district court in Tulsa. |
The
Dallas regional office of the department’s Employee Benefits Security
Administration (EBSA) conducted the investigation. In fiscal 2003, EBSA
achieved record monetary results of $1.4 billion related to the pension,
401(k), health and other benefits of millions of American workers and
their families. Employers and workers can contact the regional office at
214.767.6831 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. Johnson)
Civil Action 04-CV-066-EA (M) |
U.S.
Labor Department news releases are accessible on the Internet at
www.dol.gov. The information in this news release will be made available
in alternate format upon request (large print, Braille, audio tape or
disc) from the COAST office. Please specify which news release when
placing your request at 202.693.7765 or TTY 202.693.7755. The U.S.
Department of Labor 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
www.dol.gov/compliance. |