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Release Date: June 2, 2006
Release Number: 06-478-SEA (06-46)
Contact Name: Michael Shimizu
Phone Number: 206.553.7620
Portland, Oregon - The U.S. Department of
Labor has sued William Patterson and C. Dixon Rauch, former owners and
officers of defunct Rundel Products Inc., Portland, Oregon, in federal
district court in Portland to recover over $15,000 in retirement plan
losses resulting from violation of the Employee Retirement Income
Security Act (ERISA).
Between August 15, 2001, and January 2002, the
defendants failed to transfer to the retirement plan $15,000 in
contributions withheld from employees’ pay. Instead, the money was
co-mingled with the company’s general assets. The company ceased
business shortly thereafter and was placed into bankruptcy March 12,
2002.
“The misuse of pension assets to subsidize
corporate activities jeopardizes the retirement income of workers and
will not be tolerated,” said Francis C. Clisham, regional director of
the department’s Employee Benefits Security Administration (EBSA) in
San Francisco.
The suit asks the court to bar Patterson and Rauch
from serving as fiduciaries or service providers to any employee benefit
plan covered by ERISA and to appoint an independent fiduciary to
terminate the plan and distribute plan assets to eligible participants.
The suit resulted from an investigation conducted by
EBSA’s Seattle District Office. In fiscal year 2005, EBSA achieved
monetary results of $1.7 billion related to pension, 401(k), health and
other benefits for millions of American workers and their families.
Employers and workers can reach EBSA’s Seattle office at 206.553.4244
or through its toll free number, 1.866.444.EBSA (3272), for help with
problems relating to private-sector retirement and health plans.
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 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.
(Chao v. Rauch)
Civil Action No. 3:06-cv-00761-HA
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