Labor Department Obtains Judgment Against Trustee Of Hempstead, New York, Pension Plan

Archived News Release — Caution: Information may be out of date.

The U. S. Department of Labor has obtained a consent judgment against the trustee of a pension and health plan of a Hempstead, New York community service organization for mismanaging plan assets

The plans provided retirement and health benefits to employees of the Economic Opportunity Community (EOC), a nonprofit community service program, through the Luenetta Miller EOC Retirement Benefit Program and the Community Action Agencies Insurance Group for employees.

Under the judgment, John Kearse is permanently barred from being a plan trustee and from doing business with any plan governed by the Employee Retirement Income Security Act (ERISA). The judgment also limits Kearse’s serving in a position of trust to any plan governed by ERISA, communicating with officials of such plans and receiving compensation from those plans.

A lawsuit, filed simultaneously with the judgment, alleged that Kearse violated his duties as trustee to the plans by:

• investing retirement plan assets in low interest bearing accounts of the CEDC Federal Credit Union whose credit committee Kearse served on;
• failing to set up individual accounts for each participant and to credit, in a timely manner, earnings to the accounts; and
• allowing pension and health plan assets to be used as collateral on loans by the credit union to affiliated companies, including to the sponsors of the retirement plan and the health plan.

The judgment was approved on October 5 by the federal district court in Brooklyn. This case resulted from an investigation conducted by the New York Regional Office of the Pension and Welfare Benefits Administration into alleged violations of ERISA.

(Herman v. Kearse)
Civil Action No. CV 98 5900

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Archived News Release — Caution: Information may be out of date.

Contact Name: Gloria Della
Phone Number: 202.219.8921