Houston Plan Administrators Barred From Serving ERISA Plans

Archived News Release — Caution: Information may be out of date.

The U. S. Department of Labor has obtained a consent order and judgment permanently barring Houston-based Administrative Services of Texas (ASO) and its parent company from serving in a fiduciary capacity to any employee benefit plan governed by Employee Retirement Income Security Act (ERISA).

The court order also discharges Jack M. Webb as the independent receiver to the plans and returns to certain contributing employer all assets remaining after payments of plan expenses. The consent order does not, however, resolve the department’s allegations against Mark A. Strange, a former corporate executive.

Previously, the department restored $737,636.19 in plan assets held by Administrative Services of North American (ASONA) to employers sponsoring the welfare benefit plans.

The Labor Department sued ASO, ASONO and Strange, for allegedly using plan assets to pay the operating expenses of the two corporations. Strange allegedly authorized the transfer of funds from plan trust accounts to corporate accounts between October 1998 and March 1999.

A preliminary injunction obtained by the department on June 11, 1999 froze the assets of the corporations to prevent further depletion of plan assets owed to client plans managed by them.

ASONO and ASO served as third-party administrators to self-funded employee welfare benefit plans sponsored by a variety of employers.

This case resulted from an investigation conducted by the Dallas Regional Office of PWBA into alleged violations of ERISA. The consent order and judgment was entered on April 19 in federal district court in Houston.

(Herman v. Administrative Services of North America, Inc.)
Civil Action No. H-99-1793

U.S. Department of Labor news releases are accessible on the Internet. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the Central Office for Assistive Services and Technology. Please specify which news release when placing your request. Call 202.693.7773 or TTY 202.693.7775.

Archived News Release — Caution: Information may be out of date.