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Release Date: May 18, 2006
Release Number: 06-818-BOS/BOS 2006-141
Contact Name: John M. Chavez
Phone Number: 617.565.2075
Boston, Massachusetts - The president of West
End Lumber Company of Bridgeport, Connecticut, has been ordered to repay
over $401,000 to two company employee benefit plans to resolve a lawsuit
filed by the U.S. Department of Labor alleging violations of the
Employee Retirement Income Security Act (ERISA).
Under the consent judgment and order, Sargent Shaw
must pay $260,000 to the profit sharing plan and $141,199 to the money
purchase plan. The restored assets will be allocated or distributed to
eligible participants. Shaw has 60 days to make the payments, after
which he will be prohibited from serving as a fiduciary with respect to
any ERISA-covered plan. In addition, Shaw agreed to pay a civil penalty
of $80,239.80 directly to the U.S. Department of Labor once he has made
restitution to the plans.
“Plan officials have a duty to protect employees’
retirement assets,” said Assistant Secretary of Labor Ann L. Combs, of
the department’s Employee Benefits Security Administration (EBSA). “The
Labor Department will not hesitate to hold accountable those who do not
fulfill their duties.”
The legal actions, filed with the U.S. District Court
for the District of Connecticut, resulted from an investigation
conducted by the Boston regional office of EBSA. The lawsuit alleged
that both the company and Shaw failed to fulfill certain
responsibilities as plan fiduciaries. Specifically, from November 1,
1998 to June 30, 2002, Shaw failed to adequately diversify plan
investments, thereby failing to minimize the risk of large losses to
each plan. The suit also alleged that significant losses resulted from
these fiduciary violations, and that both the company and Shaw were
liable for the losses.
In fiscal year 2005, EBSA achieved monetary results
of $1.7 billion related to the pension, 401(k), health and other
benefits for millions of American workers and their families. Employers
and workers can contact the Boston regional office at 617.565.9600 or
EBSA’s toll-free number, 1.866.444.EBSA (3272), for more information
about ERISA or for help with problems relating to private-sector pension
and health plans. Additional information can be found at www.dol.gov/ebsa.
(Chao v Sargent Shaw)
Civil Action Number: 3:06-CV-00642-MRK
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