LABOR DEPARTMENT SUES HARRIS COUNTY 401(K) PLAN OFFICIAL FOR FAILURE TO FORWARD EMPLOYEE CONTRIBUTIONS TO PLAN

Archived News Release — Caution: Information may be out of date.

The U. S. Department of Labor sued a Harris County, Tex. company and its 401(k) plan official for failing to forward to the plan employee contributions withheld from their paychecks, resulting in losses to the participants of $6,986.

Defendants in the case include the Pin Oak Medical/Surgical Associates, located in Houston, the company owner Dr. Lynn R. Gibbs, who also was the plan trustee, and the plan.

According to the department’s lawsuit, beginning in February 1995, Dr. Gibbs allegedly withheld contributions from his employees’ paychecks for the 401(k) plan he set up in January 1994, but failed to forward the funds to the plan in a timely fashion. The plan had seven participants and $17,374 in assets as of Dec. 31, 1995.

Defendants recently repaid the plan for all losses with interest. The department is seeking an injunction and the removal of Gibbs from his fiduciary position and a permanent bar against him from serving any plan covered by the Employee Retirement Income Security Act. The lawsuit also seeks to have an independent successor trustee appointed to oversee the plan.

The lawsuit, filed April 30 in federal district court in Houston, is the result of an investigation conducted by the Dallas Regional Office of the department’s Pension and Welfare Benefits Administration into alleged violations of federal pension law.

(Herman v. Pin Oak Medical/Surgical Associates.)
Civil Action No. H 991324

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Archived News Release — Caution: Information may be out of date.

Issued by the Office of Public Affairs in Dallas, Texas Contact Name: Diana Petterson or Beverly Sepulveda
(214) 767-4777, ext. 222 or ext. 221
Sharon Morrissey
(202) 219-8921