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Release Date: 03/22/2000 Release Number:
2000-040 Contact Name: John M. Chavez Phone Number:
617.565.2075 |
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The U.S. Department of Labor has obtained a
summary judgment from the U.S. District Court for the District of New
Hampshire, resolving a suit it had filed against the fiduciary of a
Manchester-based 401(k) pension plan alleging that deductions had been made
from workers paychecks which were never forwarded to their retirement
plan accounts |
According to James M. Benages, New England
Regional Director for the Departments Pension and Welfare Benefits
Administration (PWBA), Chris Liponis, President and principal owner of
the Tractor Trailer School of New Hampshire (doing business as
Northeast Career Schools), SNOPL, Inc., and Northeast Career
Schools of Maine, has been ordered to offset his own benefits in the
Northeast Career Schools 401(k) plan to restore the benefits of other
participants in the plan. |
Specifically, said Benages, U.S.
District Judge Steven J. McAuliffe has ordered defendant Liponis to transfer a
total of $13,877.23 from his own 401(k) account to the accounts of
fourteen other participants in the Northeast Career Schools 401(k)
plan. |
Benages noted that the Labor Department lawsuit
filed against Liponis one year ago charged that, between January and April,
1998, approximately $8,000 in 401(k) plan contributions had been deducted from
employees wages, but that Liponis failed to transfer those assets to the
participants plan accounts as required by Federal law. The suit further
alleged that Liponis instead commingled the employees deductions with the
general assets of his companies and used the funds for business purposes rather
than for the benefit of the plan participants in violation of the Employee
Retirement Income Security Act (ERISA), the Federal law which protects
workers pension rights. |
Stated Benages: Any official who has
responsibility for and control over the assets of a pension plan knows that,
under the law, they must administer those assets solely for the benefit of the
plan participants and beneficiaries. Pension plan contributions deducted from
workers salaries must be promptly transferred to their plan accounts and
cannot be used for any other purpose. |
He noted that the difference between the original
$8,000 Liponis failed to deposit and the nearly $14,000 he must now forfeit
represents the earnings that would have accumulated in the participants
accounts in the interim. |
The court also ordered Liponis to promptly
effectuate the distribution of plan benefits to any participant requesting
them, and he has been permanently barred from serving as a fiduciary or service
provider to any plan covered by ERISA. |
The Departments legal action against Liponis
followed an investigation by the Boston Regional Office of the Pension and
Welfare Benefits Administration. That office is located in Room 575 of the John
F. Kennedy Federal Building in Boston. The telephone number is
617-565-9600. |
(Herman v Chris Liponis Civil Action File
Number: 99-115-M) |
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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