The U.S. Department of Labor has obtained a
judgment requiring the owner of TennOhio Transportation Co. of Columbus, Ohio
to restore $192,764 to the companys 401(k) profit sharing plan and
appoint an independent person to oversee the orderly termination of the plan.
Under the judgment, the court appointed M. Larry
Lefoldt as the independent plan fiduciary with authority to terminate the
401(k) plan and distribute plan assets, including money restored to the plan,
to all participants except defendant John Armstrong. The judgment also
permanently bars Armstrong from serving in a position of trust to any plan
governed by federal pension law.
On April 22, 1999, the department sued Armstrong
and TennOhio for failing to deposit employee contributions into investment
accounts of the company's 401(k) plan and keeping plan money in accounts of
TennOhio and related companies. The plan covered as many as 356 employees of
TennOhio and three related companies: Marpam Truck and Trailer Co., Commercial
Trailer Co. and Garland Transportation Co. The plan had assets of $649,931.00
as of June 30, 1997.
The departments lawsuit alleged that
Armstrong violated the Employee Retirement Income Security Act (ERISA) by
failing to remit voluntary employee contributions to the 401(k) plan's
investment accounts over the period Nov. 1, 1996, to Aug. 25, 1997. Armstrong
was the president of TennOhio and a major owner of the three related companies.
He also allegedly held plan money in the corporate accounts of the companies
sponsoring the plan and failed to hold plan assets in trust.
Joseph Menez, Director of the Cincinnati Regional
Office of the Pension and Welfare Benefits Administration (PWBA), 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 606-578-4680 if they have questions or suspect abuse of their
pension, health or other benefit plans.
The judgment, entered on June 30 in federal
district court in Columbus, Ohio, resulted from an investigation by the
Cincinnati Regional Office of the PWBA into alleged violations of ERISA.
Herman v. Armstrong C2-99-395 |