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Release Date: June 20, 2006
Release Number: 06-1037-ATL
Contact Name: Gloria Della/David James
Phone Number: 202.693.8664/202.693.4676
Atlanta, Georgia - The U.S. Department of
Labor has obtained a consent judgment and order requiring Elk Valley
Professional Affiliates, Inc. (EVPA) of Fayetteville, Tennessee, to
restore $295,455 to the company’s retirement plan and to pay $29,545
in civil monetary penalties to the federal government for violating
federal employee benefits law.
The judgment also bars Mark Waters permanently and
David Groce for seven years from serving in a fiduciary capacity to any
employee benefit plan governed by the Employee Retirement Income
Security Act (ERISA).
“Those entrusted to manage workers’ retirement
benefits cannot use those funds for personal gain,” said Ann L. Combs,
Assistant Secretary of Labor for the Employee Benefits Security
Administration (EBSA). “The department will not hesitate to act to
ensure that retirement assets are used solely to benefit workers and
their families.”
In April 2003, the department sued the company,
Waters and Groce for using plan assets to purchase EVPA stock between
November 1995 and May 1996 for more than fair market value. Waters and
Groce both served on the administrative committee of the company’s
employee stock ownership plan (ESOP). The suit also alleged that these
defendants improperly secured an ESOP loan with a certificate of deposit
owned by the plan and then used the certificate to pay off the loan.
Waters and Groce also used plan assets to pay closing expenses to
Telesis, a broker Waters hired to find a buyer for the company, and
failed to maintain a fidelity bond to protect the plan against losses as
required by law.
EVPA, which was purchased by Deaconess HomeCare, Inc.
in December 1996, operated home health care agencies and home medical
equipment facilities in Tennessee, northern Alabama and Mississippi.
The suit was filed in federal district court in
Winchester, Tenn. The civil investigation leading to the suit was
conducted by the Atlanta regional office of EBSA. Employers and workers
can reach the Atlanta office at 404.562.2156 or toll-free number at
1.866.444.EBSA (3272), for help with problems relating to private-sector
pension and health plans.
(Chao v. Elk Valley Professional Affiliates, Inc.)
Civil Action No. 4:03-CV-17
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