Archived News Release Caution: Information may be out of date.
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Release Date: 09/15/2004
Release Number: 04-1809-ATL
Contact Name: Gloria Della
Phone Number: 202.693.8664
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Atlanta, Georgia - The U.S. Department of Labor
has obtained a preliminary injunction removing the trustees of the
Paramount, California-based International Union of Industrial and
Independent Workers Benefit Fund (IUIIW) and permanently barring them from
service to the fund. |
The
order requires that the fund, which purported to be a union-sponsored
benefit plan, be terminated, appoints Jeanne Barnes Bryant as the
independent fiduciary to manage the fund and its assets, and directs
Bryant to establish a claims procedure for participants. Under the
injunction, trustees Geoffrey J. Beltz and David Wright must cooperate
with Bryant and are barred from serving as fiduciaries of the benefit
fund. |
“The
trustee of a pension fund is supposed to be someone who is entrusted to
protect the workers. When malfeasance is discovered, the Labor Department
will vigorously fight to protect the health benefits of workers and their
families from fraud, abuse, and mismanagement,” said U.S. Secretary of
Labor Elaine L. Chao. “The department’s court action puts the fund
under responsible management and will help ensure that the interests of
workers and their families are protected.” |
The
Labor Department filed the lawsuit against IUIIW on April 6, 2004. Other
defendants in the suit include former plan administrator Oak Tree
Administrators, its owner Cherille Shelp and current and former trustees
Beltz, Wright, James Miller, and Henry Solowiej. The suit alleged that the
defendants operated the fund in a manner that violated the Employee
Retirement Income Security Act (ERISA). The fund’s health benefits were
marketed to employers and individuals in Texas, Georgia, Oklahoma,
California and many other states. Several states, including Oklahoma and
Georgia, have ordered the fund’s operators to stop all insurance-related
activities. |
The department alleged that from July 2000 to June
2003, the defendants spent millions of dollars of fund assets on
administrative expenses – including several hundred thousand dollars
paid to the purported union and more than $1 million to marketers of the
arrangement. The defendants also allegedly delayed processing health
claims, failed to operate the fund in an actuarially sound manner and paid
excessive fees for services provided to the fund. In its suit, the
department is seeking to restore losses and to obtain other appropriate
relief. |
The
injunction was entered in federal district court in Atlanta. The Atlanta
regional office of the department’s Employee Benefits Security
Administration (EBSA) investigated the case. Tips for small employers on
purchasing health benefits may be found at EBSA’s Web site at http://www.dol.gov/ebsa/newsroom/fshlthinstips.html.
Employers and workers can reach the Atlanta regional office at 404.562.2156
or EBSA toll-free at 1.866.444.EBSA (3272), for help with problems
relating to private-sector retirement and health plans. |
(Chao
v. International Union of Industrial and Independent Workers)
Civil Action No. 1:04-CV-0934-BBM |
U.S.
Labor Department news releases are accessible on the Internet at
www.dol.gov. 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
www.dol.gov/compliance. |
Archived News Release Caution: Information may be out of date.
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