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Release Date: June 25, 2008
Release Number: 08-764-BOS/BOS 2008-183
Contact Name: John M. Chavez
Phone Number: 617.565.2075
New York – Trustees of the welfare, annuity
and pension funds of the Material Yard Workers Local 1175, Laborers
International Union of North America (LIUNA), Howard Beach, New York,
must restore approximately $227,000 to the plans and pay nearly $23,000
in civil monetary penalties, according to a consent judgment obtained by
the U.S. Department of Labor.
“Benefit plan assets cannot be used to pay
salaries, fees or expenses unrelated to the operations of the plan,”
said Bradford P. Campbell, assistant secretary of the Labor Department’s
Employee Benefits Security Administration (EBSA). “This judgment
rightfully restores $227,000 to the plans that workers and their
families rely on for their retirement and other benefits.”
The defendants allegedly violated the Employee
Retirement Income Security Act (ERISA) by using plan funds to pay
salaries and other expenses not directly related to the operation of the
plans. Named as defendants in the department’s lawsuit were trustees
Fred Clemenza, Anthony Ferrari, Frank Castiglione and Richard Grace.
Also named in the suit were the Material Yard Workers Local 1175 LIUNA
Pension, Welfare and Annuity Funds, and Local 1175 Pension Fund Building
Holding Corp.
The trustees allegedly caused the funds to pay a
portion of the salaries and severance pay of two union employees and to
pay credit card charges of one defendant and a union employee, without
proof that the funds were obligated for the charges.
The judgment, entered in the U.S. District Court for
the Eastern District of New York, orders the defendants to make
restitution to the funds and pay the civil penalty to the Labor
Department. In addition, trustees Clemenza and Castiglione are
permanently barred from serving in a fiduciary capacity or as service
providers to any plan governed by ERISA. Ferrari is barred from such
positions for five years while Grace is enjoined for a period of two
years.
The suit resulted from an investigation by EBSA’s
New York Regional Office. Employers and workers can reach EBSA at
212.607.8600 or toll-free at 866.444.3272 for help with problems
relating to private sector retirement and health plans. In fiscal year
2007, EBSA achieved monetary results of $1.5 billion related to pension,
401(k), health and other benefits for millions of American workers and
their families. For more information, visit www.dol.gov/ebsa.
Chao v Clemenza
Civil Action Number: 06-CV-2877
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placing your request at 202.693.7828 or TTY 202.693.7755. The Labor Department is committed to providing America's employers and
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with its laws and regulations. For more information, please visit the
Department's Compliance
Assistance page.
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