Archived News Release Caution: Information may be out of date.
|
Release Date: 03/01/2001 Release
Number: 01-36 Contact Name: Michael Shimizu Phone Number: 206.553.7620 |
|
Los Angeles, California - The U.S. Department of Labor has
filed suit against Avcon, Inc. (Avcon), a California-based Delaware
corporation, and Avcons former chief financial officer, John N. Cowles,
for violations of the Employee Retirement Income Security Act. The Avcon, Inc.
401(k) Plan, an employee benefit plan, was named as a defendant in the suit,
which was filed February 22, 2001, in U.S. District Court for the Central District
of California. |
The alleged violations of ERISA occurred when
Avcon and Cowles failed to forward contributions withheld from employee
paychecks to the plan from November 27, 1997, to May 22, 1998, according to Billy
Beaver, Los Angeles regional director for the Labor Departments Pension
and Welfare Benefits Administration. Avcon and Cowles are also alleged to have
delayed the forwarding of employee contributions to the plan from March 6,
1996, to May 22, 1998. |
The departments complaint contends that
Cowles, as CFO of Avcon, handled the forwarding of employee contributions to
the plan, including withholding contributions from employee paychecks and
deciding when, and if, to forward those contributions to the plan. Cowles is
identified in the complaint as the person who exercised all of the
discretionary authority for the administration of the plan on behalf of
Avcon. |
The suit asks the court to require Avcon and
Cowles to make full restitution of all losses suffered by the plan and to
require the plan to set off Cowles individual plan account against the
losses caused by the alleged misconduct. It also seeks to remove Avcon as plan
administrator and named fiduciary; to remove Cowles as plan trustee and named
fiduciary; to appoint an independent fiduciary to make distributions to the
plans participants; to require Cowles and Avcon to pay for all costs
associated with the appointment and retention of the independent fiduciary; and
to bar Cowles permanently from serving as a fiduciary of or service provider to
any employee benefit plan subject to ERISA. |
Todays court action was a result of an
investigation conducted by the Los Angeles Regional Office of PWBA, headed by
Beaver, and is part of an ongoing initiative to ensure compliance with ERISA
fiduciary standards with respect to timely deposit of employees
contributions to 401(k) plans. |
Beaver said, This case exemplifies our
commitment to protect the hard-earned benefits of workers. Workers can help us
protect their plan benefits by contacting our office at 626.583. 7862 if they
have questions or suspect abuse of their pension, health or other benefit
plans. |
(Chao v. Avcon & Co., Inc. et al
Civil Action No.
01-CV-1737) |
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. |
Archived News Release Caution: Information may be out of date.
| |
|