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Release Date: July 2, 2008
Release Number: 08-416-ATL (151)
Contact Name: Michael Wald
Phone Number: 404.562.2075
Atlanta – The U.S. Department of Labor has
sued Carl E. Reid, a corporate officer of defunct American Fittings
Inc., for violating the Employee Retirement Income Security Act (ERISA)
by failing to remit employee contributions to the company’s Savings
Incentive Match Plan for Employees individual retirement account (SIMPLE
IRA).
“This money belongs to the employees for their
future retirement, and the company cannot divert these funds for its own
needs,” said Rebecca Marshall, director of the Atlanta Regional Office
of the department’s Employee Benefits Security Administration (EBSA),
which investigated this case.
The suit alleges that Reid withheld $44,189 from
employees’ salaries but failed to segregate the funds from those of
the former Travelers Rest, South Carolina company, and did not forward
the money to the plan. The Labor Department seeks to recover the
contributions for the benefit of the plan’s participants.
The suit also asks the court to remove the defendant
as fiduciary of this plan, bar the defendant from serving as fiduciary
of any ERISA-covered plan, and appoint a successor fiduciary to receive
any funds recovered and distribute any proceeds to the 50 participants.
American Fittings Inc. was a manufacturer of
stainless steel tube fittings.
Employers with similar problems who are not yet
subjects of EBSA investigations may be eligible to participate in the
department’s Voluntary Fiduciary Correction Program. Participation
requires employers to make workers whole but allows them to avoid EBSA
enforcement actions and civil penalties as well as any applicable excise
taxes. For more information, see www.dol.gov/ebsa.
Employers and workers can reach EBSA’s Atlanta
Regional Office at 404.302.3900 or toll-free at 866.444.3272 for help
with problems relating to private sector retirement and health plans. In
fiscal year 2007, EBSA achieved monetary results of $1.5 billion related
to pension, 401(k), health and other benefits for millions of American
workers and their families.
Chao v. Carl E. Reid
(Civil Action Number 7:08-cv-02337-HFF)
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