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Release Date: 05/26/2005
Release Number: 05-934-CHI
Contact Name: Brad Mitchell
Phone Number: 312.353.6976
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Detroit, Michigan - The U.S. Department of Labor
has sued an executive of The International Group, Sterling Heights,
Michigan, for failing to forward employee contributions to the company’s
401(k) plan in a timely manner, to segregate plan contributions from the
general operating assets of the now defunct company, and to insure that
required distributions were made to plan participants. |
“The department will act when plan fiduciaries fail
to carry out their duty to protect the retirement plan assets held on
behalf of participants,” said Joseph Menez, director of the department’s
Cincinnati regional office of the Employee Benefits Security
Administration (EBSA). |
The lawsuit alleges that Constantine Alexander failed
to remit to the company’s 401(k) plan, within the time required by law,
contributions deducted from workers’ paychecks from June 1, 1999 through
June 30, 2001. He also allegedly co-mingled the contributions with the
assets of the company in violation of the Employee Retirement Income
Security Act (ERISA). Alexander owned The International Group and its
predecessor, Alpha Construction & Development Corp., and was a plan
trustee. |
The suit seeks to require Alexander to restore to the
plan interest lost due to the late contributions and correct any
prohibited transactions. The suit also asks that the court order the
defendant to purchase a fidelity bond for the plan as required by ERISA
and permanently bar him from acting as a plan fiduciary or service
provider in the future. |
Employers with similar problems, who are not yet the
subject of an investigation by EBSA, may be eligible to participate in the
department’s Voluntary Fiduciary Correction Program (VFCP).
Participation in the VFCP requires employers to correct violations of the
law but allows them to avoid EBSA enforcement actions and civil penalties
as well as any applicable excise taxes. For more information about the
VFCP, see www.dol.gov/ebsa. |
The
suit, filed in federal district court in Detroit, resulted from an
investigation conducted by the Detroit district of EBSA’s Cincinnati
regional office. Employers and workers can reach the Cincinnati regional
office at 859.578.4680 or through EBSA’s toll-free number,
1.866.444.EBSA (3272), for help with problems relating to private-sector
retirement and health plans. In fiscal year 2004, EBSA achieved record
monetary results of $3.1 billion related to the pension, 401(k), health
and other benefits of millions of American workers and their families. |
Chao
v. Alexander
Civil Action No. 2:05CV71927 |
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 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 the
Department's Compliance
Assistance page. |
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