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Release Date: February 8, 2006
Release Number: 06-156-PHI (EBSA 06-006)
Contact Name: Leni Uddyback-Fortson
Phone Number: 215.861.5102
Charleston, West Virginia - The U.S.
Department of Labor has obtained a consent judgment requiring Richard
Lewis and Benefit Services Inc. (BSI) to restore $16,820 to the company’s
profit sharing plan. The judgment follows a Labor Department
investigation that found the defendants violated the Employee Retirement
Income Security Act (ERISA) by making unauthorized distributions from
the plan to themselves and others. BSI, a Charleston-based third party
administrator of health plans, went out of business in April 2000.
“Plan fiduciaries have a duty to act responsibly
with the funds entrusted to them,” says Mabel Capolongo, director of
the department’s Philadelphia regional office of the Employee Benefits
Security Administration (EBSA).
The judgment resolves a lawsuit filed by the Labor
Department July 2005, alleging that Lewis, the company’s owner and
plan trustee, and BSI, the plan administrator, failed to properly
distribute plan assets to participants after terminating the plan in
2000. Lewis was found to have made excessive benefit distributions to
himself and others and was unable to account for numerous plan
withdrawals. Both defendants also failed to ensure that all participants
received their full benefit distributions in accordance with the terms
of the plan.
The judgment removes Lewis and BSI from their
positions with the plan and appoints Jackie Carmichael as an independent
fiduciary with authority to administer, manage and dispose of plan
assets, including final disbursements to participants. In addition,
Lewis and BSI are permanently enjoined from serving as trustees,
fiduciaries, advisors or administrators of any ERISA-covered plan.
The judgment, entered in federal district court in
Charleston, resulted from an investigation conducted by EBSA’s
Philadelphia regional office. Employers and workers can reach the
Washington district office at 301.713.2000 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 2005, EBSA
achieved record monetary results of $1.7 billion related to pension,
401(k), health and other benefits for millions of American workers and
their families.
(Chao v. Lewis)
Civil Action No.: 2:05-0581
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