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Release Date: 03/14/2003
Release Number: III-03-03-14-025-MD
Contact Name: Gloria Della
Phone Number: 202.693.8664
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Silver Spring, Maryland - The U.S. Department of
Labor sued executives of Silver Spring, Maryland-based Information Systems
Solutions International (ISSI), Inc. on March 13, 2003, to recover losses
on employee contributions that were not remitted to the company’s 401(k)
plan. |
The lawsuit alleges that James L. Finneran and Philip
R. Wright violated their duties under the Employee Retirement Income
Security Act (ERISA) as fiduciaries of the 401(k) plan. The defendants
allegedly failed to pay wages or remit employee contributions to the plan’s
custodian during the Fall of 2000. The department simultaneously filed
separate adversary complaints against the defendants to prevent them from
discharging any debt owed to the 401(k) plan in their respective
bankruptcy proceedings. |
The suit seeks a court order requiring defendants to
repay any losses with interest to the plan, to offset their accounts in
order to restore assets owed to the plan, to permanently bar them from
serving in positions of trust to any ERISA-covered plan in the future, and
remove them from their positions with the plan. The department also asks
the court to appoint J.M. Pension Advisory, Inc. of Olney, Maryland to
manage and administrate the plan. |
ISSI was a computer consulting firm with over 200
employees nationwide before ceasing business operations in 2001. Finneran,
vice president of the company, and Wright, the chief executive officer,
each filed for Chapter 7 bankruptcy in 2002. As of December 2000, the
401(k) plan had 51 participants and $1,624,744 in total assets. |
The suit, filed in federal district court in Baltimore,
Maryland, resulted from an investigation conducted by the Washington
District Office of the department’s Employee Benefits Security
Administration (EBSA). |
Mabel Capolongo, Director of EBSA’s Philadelphia
Regional Office said, “Despite the financial hardships of employers, the
law clearly states that employee contributions must be forwarded to the
plan to pay future promised benefits.” |
Capolongo noted that 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 make workers whole
but allows them to avoid EBSA enforcement actions, civil penalties and any
applicable excise taxes. For more information see www.dol.gov/ebsa. |
Employers and workers can reach the Philadelphia
Regional Office at 215.861.5300 or EBSA’s toll free number,
1.866.444.EBSA (3272), for help with any problems relating to
private-sector pension and health plans. |
(Chao v. Finneran) Civil Action No. JFM03-686, (Chao v.
Wright ) Bankruptcy Case No. ADV-03-5141-JS, (Chao v. Finneran) Bankruptcy
Case No. ADV-03-5140-JS |
U.S. Department of Labor
news releases are accessible on the Internet. The information in this news
release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing
your request. Call 202.693.7773 or TTY 202.693.7755. |