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Release Date: April 25, 2006
Release Number: 06-538-CHI
Contact Name: Brad Mitchell
Phone Number: 312.353.6976
Minneapolis, Minnesota - The U.S. Department
of Labor has sued Falcon Communications Group Inc., Minneapolis,
Minnesota, and its owner to recover employee contributions that they
failed to forward to the workers’ SIMPLE IRA plan.
“The law requires plan fiduciaries to act
responsibly in managing money set aside for retirement plans for the
benefit of workers and their families,” said Steven Eischen, director
of the Employee Benefits Security Administration’s (EBSA) Kansas City
Regional Office. The Kansas City regional office investigated the case.
The department’s lawsuit, filed in United States
District Court for the District of Minnesota, alleges that Falcon
Communications Group and Jim Frisco violated the Employee Retirement
Income Security Act (ERISA) when they failed to forward in a timely
manner SIMPLE IRA plan contributions withheld from employees’
paychecks for intermittent pay periods from January 14, 2001 through May
31, 2002 and failed to segregate and forward contributions withheld from
employees’ paychecks for pay periods from July 15, 2002 through August
8, 2003.
The suit seeks to require the defendants to repay all
contributions owed to the plan and restore all losses to the plan with
earnings. It also asks the court to permanently bar Frisco from serving
as a fiduciary to any plan governed by ERISA.
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 correct any violations
but allows them to avoid EBSA enforcement actions and civil penalties as
well as any applicable excise taxes. For more information about the VFCP,
see www.dol.gov/ebsa.
Employers and workers with questions or concerns
regarding their private-sector pension and health plans can contact the
EBSA regional office in Kansas City at 816.426.5131 or EBSA’s toll
free number, 1.866.444.EBSA (3272). In fiscal year 2005, EBSA achieved
record monetary results of $1.7 billion related to pension, 401(k),
health and other benefits of millions for American workers and their
families.
(Chao v. Frisco)
Civil Action No. 0:06-cv-01511-PAM-JSM
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