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Release Date: March 30, 2006
Release Number: 06-586-BOS/BOS 2006-087
Contact Name: John M. Chavez
Phone Number: 617.565.2075

Rhode Island Employer Agrees to Restore Funds to 401(k) Plan to Settle U.S. Labor Department Lawsuit

Boston, Massachusetts - Matthias E. Lukens, president of the now-defunct e-tel Corp., of West Warwick, Rhode Island, has agreed to repay over $38,000 to the company’s 401(k) plan to settle a lawsuit filed by the U.S. Department of Labor alleging violations of the Employee Retirement Income Security Act (ERISA).

According to James Benages, Boston regional director for the department’s Employee Benefits Security Administration (EBSA), the suit was filed in early March with the U.S. District Court for the District of Rhode Island against Matthias E. Lukens whose company ceased operations January, 2003, and was placed in receivership by the State Court of Rhode Island. The company’s 401(k) profit sharing plan was established January 1, 2000.

The Labor Department’s suit alleged that from March 2001 until December 2002 e-tel Corp. withheld employee contributions but failed to forward them to the 401(k) plan, a violation of ERISA, the federal law that protects private employee pension and benefit plans.

The consent judgment and order permanently prohibits Lukens from serving in a fiduciary capacity to any employee benefit plan covered by ERISA, except to carry out the requirements of the court order. The judgment also requires Lukens to pay, on or before March 31, $38,147.25, representing principal and lost earnings, to e-tel Corp.’s 401(k) plan.

The defendant also must ensure that participants receive their appropriate shares of the plan’s assets. Once distributions are made, the plan will be terminated.

Said Benages, “Our legal action in this case should put employers and plan sponsors on notice that we will not hesitate to resort to litigation to enforce the law and make sure that plan participants receive the benefits to which they are entitled.”

The Labor Department’s legal action resulted from an investigation conducted by EBSA’s Boston regional office. In fiscal year 2005, EBSA achieved record monetary results of $1.7 billion related to the pension, 401(k), health and other benefits for millions of American workers and their families. Employers and workers can contact the Boston regional office at 617.565.9600 or EBSA’s toll-free number, 1.866.444.EBSA (3272), for more information on the requirements of ERISA or for help with problems relating to private-sector pension and health plans. Additional information can be found at www.dol.gov/ebsa.

(Chao v Matthias E. Lukens)
Civil Action Number: 06-93 ML

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