Labor Department Sues Florida Company Official For Failing To Forward Employee Contributions To 401(K) Plan

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor has sued a Florida pension plan official for deducting but not forwarding $84,521 from employees’ paychecks to the company-sponsored 401(k) savings and investment plan.

The department’s complaint names as the sole defendant Charles J. Givens, III., an officer of the Group of Companies, L.C., who allegedly had discretion and control over management and assets of the plan and, accordingly, was responsible for the improper violations of the Employee Retirement Income Security Act. The Group of Companies, L.C. was founded by his father Charles J. Givens, Jr., who developed and successfully marketed financial advice and wealth-building strategies through books and television appearances between 1986 and 1996.

Originally, the defendant’s father established a Subchapter S Corporation called the Charles J. Givens, Jr., Organization with himself as the single shareholder. Subsequently, Givens Jr. reorganized his business by establishing four new companies including Financial Programs, Inc.; Financial Success Systems, Inc.; Givens Television, Inc., and Share the Wealth, 2000, Inc. In November 1994 he established the Group of Companies, L.C., based in Longwood, Fla., as a holding company for the four companies.

In March, 1995, Givens Jr. resigned from managing his organization, which was renamed International Administration Services (IAS). After downsizing from 300 to 15 employees, IAS filed for bankruptcy in 1996.

On Jan. 1, 1996, employees of the Group of Companies were transferred to employment of Financial Programs, Inc., a subsidiary. On June 17, 1996, the subsidiary filed a petition in Florida State Court for assignment of a benefit of creditors. Effectively, the companies are no longer in business. Givens Jr. died in July 1998.

During 1995, the Group of Companies established a 401(k) plan, with eligible employees making contributions by means of payroll deduction. Between Feb. 1, 1996 and May 31, 1996, while the defendant was in control of the companies’ finances, $84,521 was deducted from the employees’ paychecks but never remitted to the 401(k) plan. The employee contributions were commingled with the general assets of the Group and/or its affiliates.

The department is seeking to have the defendant Givens III restore to the plan all losses, plus interest, and to have him permanently barred from serving any plan subject to ERISA. The department also is asking the court to name a successor independent fiduciary to take over operation of the plan, giving the successor authority to marshal and distribute its assets and ultimately to terminate the plan.

The complaint resulted from an investigation conducted by the Miami District Office of the department’s Pension and Welfare Benefits Administration into alleged violations of the federal pension law. The lawsuit was filed in federal district court on Nov. 12 in Orlando.

(Herman v. Charles J. Givens, III.)
Civil Action No. 99-1448 CRV ORL-19

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

Contact Name: Sharon Morrissey
Phone Number:202.219.8921