Ohio Dairy Executives Charged With Misusing 401(K) Assets

Archived News Release — Caution: Information may be out of date.

The U. S. Department of Labor today sued executives of Brewster Dairy, Inc., in Brewster, Ohio, for imprudently investing more than $1 million of the company’s 401(k) profit sharing plan assets in a real estate limited partnership.

Brewster Dairy is a manufacturer of cheese and other dairy byproducts. The 401(k) plan, which covered 194 employees, had $10,440,119 in assets as of March 1996.

The Labor Department lawsuit charges the dairy, co-owners Fritz Leeman and Walter Leeman, and vice president of finance Thomas Riegler with violating the Employee Retirement Income Security Act. The defendants also served as members of the plan’s investment committee.

According to the lawsuit, the defendants committed the plan to pay $1,031,115 to purchase units in the Heartland California Clayton Limited Partnership. The plan has invested $749,462.50 in the partnership over the period December 1990 to February 1996. The limited partnership is invested in a parcel of property located in the San Franciso Bay Area. Brewster Dairy is charged with failing to take steps to remedy the improper actions of the plan committee members.

The lawsuit seeks a court order to require that the defendants reimburse the plan for any losses resulting from the investments and to permanently bar them from violating ERISA in the future. The lawsuit was filed on March 30 in federal district court in Cleveland, Ohio.

The case resulted from an investigation conducted by the Cincinnati Regional Office of the Labor Department’s Pension and Welfare Benefits Administration into alleged violations of ERISA.

(Herman v. Brewster Dairy, Inc.)
Civil Action No. 5:98cv744

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Contact Name: GLORIA DELLA
Phone Number: 202.219.8931