New Hampshire Pension Plan Official Ordered To Forfeit Own Pension Assets To Restore Funds To Other Plan Participants' Accounts

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor has obtained a summary judgment from the U.S. District Court for the District of New Hampshire, resolving a suit it had filed against the fiduciary of a Manchester-based 401(k) pension plan alleging that deductions had been made from workers’ paychecks which were never forwarded to their retirement plan accounts

According to James M. Benages, New England Regional Director for the Department’s Pension and Welfare Benefits Administration (PWBA), Chris Liponis, President and principal owner of the Tractor Trailer School of New Hampshire (doing business as Northeast Career Schools), SNOPL, Inc., and Northeast Career Schools of Maine, has been ordered to offset his own benefits in the Northeast Career Schools 401(k) plan to restore the benefits of other participants in the plan.

“Specifically,” said Benages, “U.S. District Judge Steven J. McAuliffe has ordered defendant Liponis to transfer a total of $13,877.23 from his own 401(k) account to the accounts of fourteen other participants in the Northeast Career Schools 401(k) plan.”

Benages noted that the Labor Department lawsuit filed against Liponis one year ago charged that, between January and April, 1998, approximately $8,000 in 401(k) plan contributions had been deducted from employees’ wages, but that Liponis failed to transfer those assets to the participants’ plan accounts as required by Federal law. The suit further alleged that Liponis instead commingled the employees’ deductions with the general assets of his companies and used the funds for business purposes rather than for the benefit of the plan participants in violation of the Employee Retirement Income Security Act (ERISA), the Federal law which protects workers’ pension rights.

Stated Benages: “Any official who has responsibility for and control over the assets of a pension plan knows that, under the law, they must administer those assets solely for the benefit of the plan participants and beneficiaries. Pension plan contributions deducted from workers’ salaries must be promptly transferred to their plan accounts and cannot be used for any other purpose.”

He noted that the difference between the original $8,000 Liponis failed to deposit and the nearly $14,000 he must now forfeit represents the earnings that would have accumulated in the participants’ accounts in the interim.

The court also ordered Liponis to promptly effectuate the distribution of plan benefits to any participant requesting them, and he has been permanently barred from serving as a fiduciary or service provider to any plan covered by ERISA.

The Department’s legal action against Liponis followed an investigation by the Boston Regional Office of the Pension and Welfare Benefits Administration. That office is located in Room 575 of the John F. Kennedy Federal Building in Boston. The telephone number is 617-565-9600.

(Herman v Chris Liponis
Civil Action File Number: 99-115-M)

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