Labor Department Settles Lawsuit Against Florida Trustee For Self Dealing In Violation Of Federal Pension Law

Archived News Release — Caution: Information may be out of date.

A Fort Lauderdale, Fla., pension plan trustee was ordered to restore to the plan $90,818.60 for losses that occurred from his fiduciary breaches. In a settlement agreement and consent order obtained by the U.S. Department of Labor, B.E. Hensley also agreed to waive any claims he has against the plan, including claims for benefits; was removed from his position as plan trustee and permanently barred from exercising control over any federally-covered pension plan.

The settlement agreement also stipulated that Larry Lefoldt of Lefoldt & Co. in Jackson, Miss., be appointed to serve as an independent fiduciary to exercise control over the plan, including distributing any proceeds that may accrue.

The order resulted from a simultaneous lawsuit that alleged B.E. Hensley, trustee of the profit sharing trust for employees of B.E. Hensley, Inc., used plan money to make a personal loan to himself of $50,000, with an 8 percent interest rate. The action constituted self-dealing and violated the Employee Retirement Income Security Act (ERISA). No documents were ever executed for the loan and the accrued interest totaled $39,091.

B.E. Hensley, Inc. was a construction firm, where Hensley served as the owner, chief officer and trustee of its profit sharing plan, which provided retirement, death and disability benefits. Two related firms, B.E. Hensley Forming Company of Broward, Inc. and B.E. Hensley Forming Company of Dade, Inc., also had employees covered by the plan. B.E. Hensley, Inc. ceased operations and was dissolved in December 1991. The plan document provided for a 10-year vesting schedule and, as of Dec. 31, 1993, covered 81 participants.

The action resulted from an investigation by the Miami District Office of the Pension and Welfare Benefits Administration into violations of ERISA. The consent order was entered on Dec. 10 in the federal district court in Fort Lauderdale, Fla.

Herman v. Hensley
Civil Action No. 99-7544-CIV-LENARD

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Archived News Release — Caution: Information may be out of date.

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