Brownsville, Tex., Trustees Ordered To Repay More Than $87,000 To 401(K) Plan For Federal Pension Law Violations

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor has obtained a consent order and judgment requiring three corporations and three trustees of the Nomali, Inc. Employees 401(k) plan in Brownsville, Tex., to repay $87,318.00 to its plan participants and beneficiaries for failure to charge the full market value on rental property and land that they authorized the plan to lease.

The defendants were ordered to distribute pro rata to the accounts of the plan participants the money lost by the plan; and to correct the breaches made in the lease agreements between the plan and Nomali, Inc., with respect to the properties located at 4303 N. Navarro St., in Victoria, Tex., and 230 Security Drive in Brownsville, Tex. Nomali, Inc. owns and operates Drug Emporium drug stores in Victoria and Brownsville, Tex.

Named as defendants in the consent order and judgment were trustees Ronald L. Mann, Danny L. Mann and Dougals A. Mann. Also named were Nomali, Inc., and two of its subsidiaries, Mann Drug, Inc. of Victoria and Mann Drug, Inc. of Brownsville. The three companies are plan sponsors of the 401(k) plan.

The defendants’ actions in improperly leasing the plan-owned properties to parties related to the plan by leasing at less than fair market value allegedly violated provisions of the Employee Retirement Income Security Act (ERISA).

The consent order and judgment resulted from an investigation by the Dallas Regional Office of the Pension and Welfare Benefits Administration into violations of ERISA. The consent order and judgment were entered on Oct. 8, 1998 in the federal district court in Brownsville, Tex.

Herman v. Nomali
Civil Action No. B-98-136

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Archived News Release — Caution: Information may be out of date.

Contact Name: Diana Petterson or
Beverly Sepulveda
Phone Number: 214.67.4776, ext. 222 or 221