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Release Date: August 5, 2008
Release Number: 08-1055-SAN (SF-85)
Contact Name: Deanne Amaden
Phone Number: 415.625.2630
San Francisco – The U.S. Department of Labor has sued the
former president and chief executive officer of a defunct Phoenix
company for allegedly misusing assets of the CTC Engineering money
purchase plan of Scottsdale, Arizona, to pay personal and corporate
expenses.
The Labor Department lawsuit, filed in U.S. district court in
Phoenix, alleges that John Michael Lundberg of Scottsdale withdrew funds
from CTC Engineering’s money purchase plan for the purpose of paying
expenses not associated with the plan. Lundberg was a plan trustee at
the time. He allegedly withdrew $37,095 from other participants’
accounts between July 2001 and May 2004, and failed to collect $13,920
in mandatory company contributions owed for the plan year that ended
March 31, 2000.
“These funds were part of a compensation package promised to
employees,” said Crisanta Johnson, regional director of the
department’s Employee Benefits Security Administration in Los Angeles.
“The plan was not designed to be used by corporations and their
executives. A trustee has an obligation to put the interests of the plan
participants first.”
The suit seeks to require that Lundberg restore all losses plus
interest to the plan, remove him as a plan trustee and appoint an
independent fiduciary – at Lundberg’s expense – to terminate the
plan and distribute its assets. The suit also asks the court to
permanently bar Lundberg from serving as a fiduciary of any plan covered
by the Employee Retirement Income Security Act (ERISA).
CTC Engineering produced packaging used for shipping semi-conductor
micro-processors.
The action resulted from an investigation conducted by EBSA’s Los
Angeles Regional Office. Employers and workers with questions or
concerns regarding their private sector pension and health plans can
contact the regional office at 626.229.1000 or toll-free at
866.444.3272. Information is also available on the agency’s Web site
at www.dol.gov/ebsa. In fiscal year 2007, EBSA achieved monetary results
of $1.5 billion related to 401(k), health and other benefits for
millions of American workers and their families.
Chao v. John Michael Lundberg
Civil Action Number 2:08-cv-1344 ROS
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