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Release Date: April 25, 2006
Release Number: 06-419-CHI
Contact Name: Brad Mitchell
Phone Number: 312.353.6976
Columbus, Ohio - The U.S. Department of Labor
has filed a lawsuit in federal district court against Clifford D. Simms,
president and owner of Advanced Gear Technology, Columbus, Ohio, seeking
to recover funds he owes to the company’s SIMPLE IRA plan.
The suit, filed in the U.S. District Court in
Columbus, alleges that Simms violated his fiduciary duties under the
Employee Retirement Income Security Act (ERISA) by allowing employee
contributions owed to the plan to be used for the benefit of Advanced
Gear Technology. The department’s suit alleges that from August 2001
through April 2002, Simms failed to forward voluntary employee
contributions to the plan in a timely manner. He also failed to
segregate employees’ contributions from the company’s general
assets.
“The department will act when plan fiduciaries fail
to carry out their duty to protect the retirement plan assets held on
behalf of participants,” said Joseph Menez, director of the department’s
Cincinnati regional office of the Employee Benefits Security
Administration (EBSA).
The suit asks the court to order Simms to remit
elective employee salary deferrals for contributions to the plan and to
make good on any losses the plan may have incurred as a result of his
fiduciary breaches. It further asks that Simms be permanently barred
from serving as a fiduciary or service provider to any ERISA-covered
employee benefit plan.
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 any violations,
but allows them to avoid EBSA enforcement actions and civil penalties as
well as applicable excise taxes. For more information about the VFCP,
see www.dol.gov/ebsa.
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 Cincinnati regional office at 859.578.4680 or
through EBSA’s toll-free number, 1.866.444.EBSA (3272), for help with
problems relating to private-sector retirement and health plans.
(Chao v. Clifford D. Simms)
Civil Action No. CV00294
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