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Release Date: June 21, 2006
Release Number: 06-948-NEW/BOS 2006-167
Contact Name: John M. Chavez
Phone Number: 617.565.2075
New York, New York - The U.S. Department of
Labor has sued the trustees of the welfare, annuity and pension funds
covering members of the Material Yard Workers Local 1175, Laborers
International Union of North America (LIUNA), based in Howard Beach, New
York, to restore any losses caused by the trustees.
The defendants allegedly violated the Employee
Retirement Income Security Act (ERISA) by using plan funds to pay
salaries and other expenses not directly related to the operation of the
plans. Named in the department’s lawsuit, filed in the U.S. District
Court for the Eastern District of New York, are defendants Fred Clemenza,
Anthony Ferrari, Frank Castiglione and Richard Grace, all trustees of
the plans. Also named in the suit are the Material Yard Workers Local
1175 LIUNA Pension, Welfare and Annuity Funds, and Local 1175 Pension
Fund Building Holding Corporation.
The suit alleges that the trustees caused or
permitted the funds to pay a portion of the salaries and severance pay
of two union employees and to pay credit card charges of one defendant
and a union employee, without proof that the funds were obligated for
the charges.
“The law is very clear,” said Assistant Secretary
of Labor Ann L. Combs of the department’s Employee Benefits Security
Administration (EBSA). “Plan assets must be used to benefit the
workers who have earned them. Using plan assets to pay salaries, fees or
expenses unrelated to the plan is unacceptable.”
The department’s suit asks the court to require the
trustees to restore all losses plus interest or lost opportunity costs
and to permanently bar them from serving as fiduciaries or service
providers to any ERISA-covered plans. The suit also seeks to offset the
benefits due to the defendants from the annuity and pension funds
against the amount the defendants owe to the funds.
The suit resulted from an investigation by EBSA’s
New York regional office. Employers and workers can reach EBSA at
212.607.8600 or toll-free number at 1.866.444.EBSA (3272) for help with
problems relating to private-sector retirement and health plans. In
fiscal year 2005, EBSA achieved record monetary results of $1.7 billion
related to pension, 401(k), health and other benefits for millions of
American workers and their families. For more information, visit
www.dol.gov/ebsa.
(Chao v Fred Clemenza, et al)
Civil Action Number: 06-CV-2877
U.S. Department of Labor news releases are accessible on the
Department's Newsroom
page. The information in this news release will be made available
in alternate format upon request (large print, Braille, audio tape or
disc) from the COAST office. Please specify which news release when
placing your request at 202.693.7765 or TTY 202.693.7755. The U.S.
Department of Labor is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit the
Department's Compliance
Assistance page.
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