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Release Date: 05/18/2004
Release Number: 04-766-NEW
Contact Name: Gloria Della
Phone Number: 202.693.8664
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New York, New York - The U.S. Department of
Labor has sued Lawrence Aviation Industries Inc. of Brookhaven, New York
and its owner for making undocumented loans from the plan to themselves
and failing to collect on the unpaid loans. |
“This
Administration has a strong track record in protecting the benefits
promised to America’s workers; last year we achieved record monetary
results totaling $1.4 billion for retirement, 401(k), health and other
programs,” said U.S. Labor Secretary Elaine L. Chao. “Our legal action
in the Lawrence Aviation case makes it clear that those who manage funds
cannot use plan assets for personal gain.” |
The
lawsuit alleges that Gerald Cohen, the company’s owner, president and
401(k) trustee, and Lawrence Aviation violated the Employee Retirement
Income Security Act (ERISA) by making over $1.6 million in loans to
themselves between 1993 and 1995. The defendants allegedly failed to
collect on the loans, which have never been repaid. The lawsuit also
claims that the defendants failed to collect employee contributions owed
to the plan. |
Lawrence
Aviation is a manufacturer of titanium products for the aerospace
industry. The 401(k) plan covers 47 participants. |
The suit seeks to require that Cohen and Lawrence
Aviation restore all losses to the plan with interest, correct any
transactions with the plan that are prohibited by law and permanently bar
them from serving ERISA plans in the future. The suit also asks the court
to remove Cohen as a plan fiduciary and to appoint an independent
fiduciary to manage the 401(k) plan. |
The
lawsuit resulted from an investigation by the Labor Department’s
Employee Benefits Security Administration (EBSA). Employers and workers
can reach the New York regional office of the EBSA at 212.607.8600 or
through its toll-free number, 1.866.444.EBSA (3272), for help with
problems relating to private-sector retirement and health plans. |
(Chao
v. Cohen)
Civil Action No. CV-04-1921 |
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. |