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Release Date: 01/05/2000 Release Number:
V-69 Contact Name: Sharon Morrissey Phone Number :
202.219.8921 |
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The Carpenters Pension Trust Fund - Detroit
and vicinity of Troy, Mich. - was sued by the U.S. Department of Labor for
allegedly making a series of prohibited mortgage loans from plan assets to
certain participants of the pension plan. |
According to the lawsuit, since September 1995,
plan trustees Joseph Molnar, Melvin Stokes, Sr., H. Boyd Harris, Kenneth
Stewart, Joseph Gambino, Jr., Anthony Michael, Walter Mabry, Donald Stewart and
Donald Salkowski authorized AAA Mortgage Corporation to make first
lien mortgage loans even though the plan provisions did not allow for
such loans. In addition, participants were allowed to pledge their interest in
their vested accrued benefits in the plan as collateral for the mortgage loans
although such pledges are expressly prohibited by the plan. |
As of July 30, 1999, the outstanding principal
balances of the alleged prohibited mortgage loans exceeded $14.7
million. |
The plan is a multi-employer, Taft-Hartley pension
plan established as a result of collective bargaining by the Michigan Regional
Council of Carpenters and five employer associations. As of April, 1998, the
plan had 16,762 participants and assets totaling $1,043,125,738. |
The department is seeking a court order to require
the plan and its trustees to correct the prohibited loans and restore to the
plan any losses, including interest, that may result from the correction. It
also seeks to have all of the defendants barred from violating provisions of
Title 1 of the Employee Retirement Income Security Act (ERISA). |
The complaint is the result of an investigation
conducted by PWBAs Detroit District Office. It was filed on Jan. 5, 2000,
in federal district court in Detroit. |
(Herman v. Joseph Molnar, et al) Civil Action
# 00-40007 (Judge Paul V. Gadola) |
U.S. Department of
Labor news releases are accessible on the Internet. The information in this
news release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing your
request. Call 202.693.7773 or TTY 202.693.7775. |
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