Archived News Release Caution: Information may be out of date.
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Release Date: 08/03/2004
Release Number: 04-1479-NAT
Contact Name: Gloria Della
Phone Number: 202.693.8664
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Washington, DC - The U.S. Department of Labor
filed a consent order on August 2, 2004, ousting four trustees from the
board of the Plumbers and Pipefitters National Pension Fund and requiring
them to pay $10.98 million in restitution and civil penalties in
connection with the imprudent management of the fund’s investment in the
Diplomat Resort and Country Club in Hollywood, Florida. |
"The
Plumbers trustees mismanaged the investment and placed the retirement
benefits of thousands of union workers at risk," said U. S. Secretary
of Labor Elaine L. Chao. "Our legal action recovered nearly $10
million for workers in the Plumbers pension plan. Last year, the
Administration achieved record monetary results recovering a total of $1.4
billion for retirement, 401(k), health and other programs." |
The
settlement resolves allegations against pension trustees Martin J.
Maddaloni, President of the United Association of Journeymen and
Apprentices of the Plumbing and Pipefitters Industry of the United States
and Canada; Thomas Patchell, General Secretary-Treasurer of the Plumbers
union; Charles H. Carlson, former Chairman of Industrial Piping Company;
James A. House, part owner of, J. A. House, Inc., a bankrupt refrigerant
manufacturing corporation; and Patrick Perno, administrative assistant to
the general president of the Plumbers union. In addition to paying
restitution, Maddaloni and Patchell have permanently resigned their
positions as trustees for the fund and the six other ERISA-covered plans
they currently serve as fiduciaries. Carlson and House have resigned
permanently as trustees. Perno, who became a trustee after the project was
initiated, may continue to serve as a trustee of the fund, but will recuse
himself from any decision concerning the investment of the assets until
December 31, 2006. The federal district court in Ft. Lauderdale, Florida
must approve the settlement. |
The Labor Department sued the trustees in September
2002 for violating the Employee Retirement Income Security Act (ERISA)
when they imprudently proceeded with the Diplomat project without
conducting the analysis required to make an informed decision. The suit
also alleged that the trustees failed to maintain adequate financial
controls over construction costs and paid excessive fees to service
providers on the project. Additional funds also have been recovered for
the plan by Independent Fiduciary Services, Inc., (IFS), an independent
fiduciary appointed in 2000 pursuant to an agreement with the Secretary.
That agreement appointed an independent fiduciary to manage the Diplomat
project. IFS is continuing to pursue additional claims against
subcontractors and service providers involved in the Diplomat project. |
The
settlement resulted from an investigation conducted by the Atlanta
regional office of the Employee Benefits Security Administration (EBSA).
Employers and workers can contact a regional EBSA office at its toll free
number, 1.866.444.EBSA (3272), for help with any problems relating to
private-sector pension and health plans. |
(Chao
v. Maddaloni)
Civil Action No. 02-61289CIV |
U.S.
Labor Department news releases are accessible on the Internet at
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in alternate format upon request (large print, Braille, audio tape or
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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
www.dol.gov/compliance. |
Archived News Release Caution: Information may be out of date.
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