Stamford, Connecticut-Based Employer And Pension Plan Fiduciaries Sued By U.S. Labor Department To Restore Plan Assets

Archived News Release — Caution: Information may be out of date.

MRCA Information Services, Inc., headquartered in Stamford, Connecticut, and two company officials have been sued by the U.S. Department of Labor in Federal District Court over alleged violations of Federal pension law.

According to James M. Benages, New England Regional Director for the Labor Department’s Pension & Welfare Benefits Administration (PWBA), the suit was filed following an investigation by his agency which revealed that the company and two of its officials failed to forward at least $761,850 withheld from employees’ paychecks to the company pension plan.

During the period covered by the investigation, January 1, 1991 through the present, David Learner, as president of MRCA, and Michael Hay, as chief financial officer of the company, were both trustees of the MRCA Information Services, Inc. Shared Savings Growth Plan. This is an employee pension benefit plan covered by the Employee Retirement Income Security Act (ERISA), the federal law which protects employee pension and benefit plans.

According to Benages, the Department’s complaint, filed with the U.S. District Court in Hartford, Connecticut, alleges that during the pertinent period the defendants failed to forward to the plan at least $625,559 in plan contributions which had been withheld from employee paychecks. Further, the suit alleges that the defendants also failed to forward to the plan at least $136,291 in participant loan repayments which had also been withheld from employee paychecks.

Benages noted that MRCA Information Services, Inc., is a marketing research company headquartered in Stamford, Connecticut, with offices also located in Chicago and Palatine, Illinois. As of December 31, 1997, the company’s pension plan had forty-seven participants, he said. “The use of pension plan assets for any purpose other than the benefit of plan participants is strictly prohibited by ERISA,” said Benages. “For the defendants to withhold these funds from employee paychecks and then use the money for company business instead of depositing it in the participants’ plan accounts is totally unacceptable.” He noted that the suit also alleges that Learner and Hay failed to obtain a fidelity bond for the plan as required by law.

Therefore, the Department’s lawsuit asks the court to: permanently enjoin Learner and Hay from ever again serving as fiduciaries to any employee benefit plan covered by ERISA; permanently enjoin defendant MRCA from acting as fiduciary or plan administrator to any ERISA-covered plan; require the defendants to restore all losses – plus interest – to the plan; and require the defendants to undo all of their prohibited transactions and return to the plan any profits which resulted from those prohibited transactions.

The Department’s legal action against the MRCA defendants is the result of an investigation by the New England Regional Office of the Pension & Welfare Benefits Administration, which is headquartered in the John F. Kennedy Federal Building in Boston, Massachusetts.

Herman v MRCA Information Services, Inc., et al
Civil Action File Number: 3:00-CV-769(RNC)

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