Executives Of ASA Freight, Milwaukee, Ordered To Make Restitution To Health Plan Participants

Archived News Release — Caution: Information may be out of date.

Executives of ASA Freight Systems, Inc., a now defunct Milwaukee business, were ordered to pay more than $10,000 in restitution to participants covered by the company’s health benefit plan and were barred from managing any plans governed by federal pension law in a consent order and judgment obtained by the U.S. Department of Labor.

In addition, the court ordered defendants Melvin Gust and Patrick Crawley, the president and vice president, respectively of ASA Freight, to amend the company’s bankruptcy filing to include any unpaid medical claims owed to participants.

Gust and Crawley managed the company’s self-funded health plan, which provided medical and dental benefits to 105 employees. The plan required that monthly contributions be withheld from employees’ paychecks to pay for stop loss insurance coverage and plan administrative costs. Any excess contributions could be used to pay medical claims.

In a lawsuit filed simultaneously with the judgment, the department alleged that the defendants failed to timely remit employee contributions to the plan, did not pay the stop loss insurance premiums and failed to pay any medical or dental claims of participants from the period June 1 to Sept. 7, 1996. During that time, participants incurred in excess of $100,000 in claims.

The action resulted from an investigation by the Chicago Regional Office of the Pension and Welfare Benefits Administration into violations of the Employee Retirement Income Security Act (ERISA).

The consent order and judgment were entered and the complaint was filed July 2 in the federal district court in Milwaukee, Wis.

Herman v. Melvin Gust et al
Civil Action No. 99-C-0752

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Archived News Release — Caution: Information may be out of date.

Contact Name: Rita Ford
Phone Number: 202.219.8921