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Release Date: 10/06/2004
Release Number: 04-2003-PHI
Contact Name: Gloria Della
Phone Number: 202.693.8664
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Newark, New Jersey - The U.S. Department of
Labor has sued the trustees and service providers to the H.E.R.E. Local
4-69 Health Fund in Secaucus, New Jersey, for misusing plan assets to pay
excessive and unreasonable compensation for services provided to the
health fund, resulting in losses to the fund in excess of $2 million. |
“This
Administration is committed to protecting the employee benefits of America’s
workers, and we won’t hesitate to act when plan officials are not
managing their workers’ benefits responsibly,” said U.S. Secretary of
Labor Elaine L. Chao. “Last year, we achieved record monetary results,
recovering $1.4 billion in retirement, 401(k), health and other benefits.” |
Named
in the lawsuit are trustees David Feeback, Theresa Alfano, Steven
Silverberg and Stuart Elfenbein; and service providers Jersey Integrated
Health Network LLC (JIH), Jersey Integrated Health Practice, Inc. and
their owner, Manmohann Patel. The suit alleges that the defendants
violated the Employee Retirement Income Security Act (ERISA) by paying
excessive fees and commissions to Patel and his companies to provide a
network of medical providers and administrative services to the fund. The
service providers received the excessive commissions and fees from 1998 to
2002. The suit also alleges that the trustees permitted the fund to
reimburse Feeback for more than $50,000 in unreasonable expenses. |
The
suit seeks to require that the defendants restore all losses with
interest, undo any transactions prohibited by law and to remove the
defendants from their positions with the fund. The department also is
seeking to require that Patel and his companies return any illegal profits
they received and to permanently bar all the defendants from service to
any plan governed by ERISA in the future. |
In a criminal case involving the same health plan,
David Feeback was indicted in August 2004 by a federal court in New Jersey
for embezzling more than $130,000 in assets from the union and the health
fund. Feeback was the former president of the union local. |
The
health fund provided medical, prescription drug and dental benefits to as
many as 3,059 union members throughout New Jersey and had assets of
$1,803,743 as of December 31, 2001. |
The
suit, filed in the federal district court in Newark, resulted from an
investigation conducted by EBSA’s New York regional office. Employers
and workers can reach EBSA’s New York office at 212.607.8600 or through
EBSA’s toll-free number at 1.866.444.EBSA (3272), for help with problems
relating to private-sector retirement and health plans. |
(Chao
v. Feeback) |
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. |
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