Chicago, Illinois - The U.S. Department of Labor
has sued the trustees of the Northwest Indiana District and Regional
Councils of the Carpenters’ Pension Trust Fund and the owners of Sand
Creek Sales and Development Inc. to recover plan losses on a $10 million
land investment in the Coffee Creek real estate development in Chesterton,
Ind. Assets of the pension plan were used to purchase the real estate from
Sand Creek Sales and Development.
"In mismanaging a huge investment, pension plan
trustees jeopardized the retirement benefits of thousands of union
workers," said U.S. Secretary of Labor Elaine L. Chao. “We filed
suit to restore money owed to the plan so the union members will have
their retirement benefits when they need them.”
The lawsuit alleges that the union’s attorney, Peter
Manous, accepted $200,000 from Sand Creek co-owner Kevin Pastrick prior to
the land purchase in exchange for Manous’ agreement to influence the
purchase of the real estate by the pension plan. The suit further charges
that trustee Gerry Nannenga accepted $40,000 from Pastrick and $25,750
from Manous for influencing the plan purchase, while Sand Creek co-owner
C. Paul Ihle lied and submitted false documents to government
investigators looking into the payments to Manous and Nannenga. Additional
defendants named in the suit include pension trustees James Bohlen, Robert
Novak, Mark Danielson, Robert Bieker and Terry Sherwood, along with Sand
Creek Sales and Development. According to court documents, the trustees
failed to prudently discharge their duties to protect the retirement plan
assets of union member participants.
The suit seeks to restore any losses incurred by the
pension fund and to permanently bar the defendants from serving as
fiduciaries or service providers to any employee benefit plan governed by
the Employee Retirement Income Security Act. Last year, the department
recovered over $3 billion related to pension, 401(k), health and other
benefits for American workers and their families.
In related criminal actions, Nannenga, Pastrick and
Manous pled guilty in connection with a kickback scheme involving the same
investment. Ihle was later convicted on charges of lying and submitting
false documents to government investigators. Each of these men has been
sentenced to terms of imprisonment ranging from 18–37 months.
Filed in federal district court in Hammond, the suit
resulted from an investigation conducted by the Chicago regional office of
the Labor Department’s Employee Benefits Security Administration (EBSA).
Employers and workers can reach the Chicago office at 312.353.0900 or
through EBSA’s toll-free number, 1.866.444.EBSA (3272), for help with
problems relating to private-sector retirement and health plans.
(Chao v. Nannenga)
Civil Action No. 2:05CV258 |