LABOR DEPARTMENT SETTLES LAWSUIT AGAINST HARRIS COUNTY 401(K) PLAN FOR VIOLATING FEDERAL PENSION LAW

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor today settled its lawsuit against a Harris County, Tex. company, its 401(k) plan and the company owner and plan trustee requiring $6,986 in restitution be paid to five of the plan’s participants.

The settlement also ordered Dr. Lynn R. Gibbs, who owns Pin Oak Medical/Surgical Associates of Houston, removed from his position as the plan’s trustee and barred for five years from serving any employee benefit plan covered by of the Employee Retirement Income Security Act.

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.

Under the settlement, filed simultaneously with the lawsuit, Dr. Gibbs will be replaced by an independent fiduciary if he fails to terminate the plan and distribute the restored funds to plan participants by May 31. Additionally, if Gibbs fails to take these actions by the court- ordered termination date, an independent successor trustee will be appointed by the Labor Department and Gibbs will be personally liable to pay any and all costs associated with the independent fiduciary’s appointment and services.

The settlement, entered on May 24 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 the federal pension law.

(Herman v. Pin Oak Medical/Surgical Associates.)
Civil Action No. 99-1324

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Archived News Release — Caution: Information may be out of date.

Office of Public Affairs Dallas, Texas
Contact Name: Diana Petterson or Beverly Sepulveda
Phone Number: (214) 767-4776, ext. 222 or 221