LABOR DEPARTMENT SUES OHIO EXECUTIVE OVER MISUSE OF 401(K) CONTRIBUTIONS

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor has sued the owner of Columbus, Ohio-based TennOhio Transportation Co. 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, established in 1993, provides retirement benefits to 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.

According to the lawsuit, John 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. At the time of the improper action, Armstrong was the president of TennOhio and a major owner of the three related companies.

Armstrong also was alleged to have used plan assets to benefit parties related to the plan when he held plan money in the corporate accounts of the companies sponsoring the plan. In addition, the lawsuit alleges that Armstrong failed to hold plan assets in trust.

The lawsuit seeks an order from the court for Armstrong to reimburse the plan, with interest, for any losses resulting from his fiduciary breaches and correct the prohibited transactions in which he engaged. It also asks that Armstrong's individual account be offset against the amount of losses, if they are not properly restored to the plan, that the plan redistribute the amount off set from Armstrong's plan accounts to the remaining participants in amounts necessary to restore their losses, and that Armstrong be permanently barred from serving as a fiduciary or service provider to any ERISA-covered employee benefit plan.

The lawsuit resulted from an investigation by the Cincinnati Regional Office of the Pension and Welfare Benefits Administration into violations of ERISA. It was filed April 22 in the federal district office in Columbus, Ohio.

Herman v. Armstrong
Civil Action No. C2-99-395

U.S. Department of Labor news releases are accessible on the Internet. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the Central Office for Assistive Services and Technology. Please specify which news release when placing your request. Call 202.693.7773 or TTY 202.693.7775.

Archived News Release — Caution: Information may be out of date.

Contact Name: RITA FORD
Phone Number: (202) 219-8921