Labor Department Seeks To Recoup Simple Ira Plan Losses From Officer Of Des Moines Recycling Company

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor today sued an Iowa businessman Fred Bovee of Des Moines for failing to forward employees’salary deductions to the savings incentive match IRA plan of State Wide Metal Recycling, Inc.

As a result of the defendant’s failure to forward monies withheld from workers’ paychecks from June 6, 1997 to Jan. 22, 1999, the plan allegedly suffered losses of $2,155.76 plus interest.

State Wide established the Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) in March, 1996. There were five participants, including Bovee, and assets of $1,804.86 as of Dec. 31, 1998. The company, in the process of being sold, has been engaged in the reclamation and sale of scrap metal with Bovee as its president, director and corporate agent.

The department is seeking to have Bovee repay the plan all losses, including earnings lost and post judgment interest, attributed to his fiduciary breaches of the Employee Retirement Income Security Act (ERISA). The lawsuit is also asking that he be removed from his position with the plan, permanently barred from serving as a fiduciary to any ERISA plan and for an independent fiduciary to be appointed to administer and terminate the plan. The lawsuit further seeks to have Bovee’s own individual plan account set off to recoup the losses if he can’t otherwise restore the money.

The complaint is the result of an investigation by the department’s Kansas City Regional Office of the Pension and Welfare Benefits Administration, which oversees the federal pension law. It was filed in federal district court in Des Moines.

(Herman v.Fred Bovee and State Wide Metal Recycling, Inc.)
Civil Action No. 4-00-CV-90285

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Archived News Release — Caution: Information may be out of date.