Court Bars McLaughlin, Companies from Benefit Plan Administration - Defunct Plan Provided Health Benefits and Insurance to 3,000 Central Valley Teamsters

Archived News Release — Caution: Information may be out of date.

San Francisco, California - The U.S. Department of Labor today obtained a court order permanently barring Patrick C. McLaughlin and two companies in which he is an officer from serving any employee benefit plans governed by the Employee Retirement Income Security Act of 1974.

The consent judgment and order is the most recent development in a Department of Labor lawsuit filed in March, 2000, against McLaughlin, the companies, and the trustees of the Teamsters Miscellaneous Employees Health and Welfare Trust for mismanagement resulting in $3.6 million in unpaid health benefit claims.
TMET was a collectively-bargained employee benefit plan which provided life insurance, medical, dental, prescription drug and vision benefits for more than 3000 employees and union members throughout the Central Valley. TMET is also known as the Pacific States Health and Welfare Trust. The plan was terminated by the court in an earlier ruling.

The lawsuit alleges that McLaughlin used his positions as president of the consulting firm McLaughlin and Associates, Inc., and as secretary and treasurer of the health claims administrator Claims Benefit Insurance Administrators, Inc., to pay his companies approximately $3.6 million. That amount greatly exceeds the provisions in the companies’ written agreements with TMET.

The federal complaint also alleges that TMET trustees failed to establish and maintain the plan’s financial solvency, failed to pay benefits while paying excessive amounts to the plan’s consultant and claims administrator for unsubstantiated charges, and failed to properly bond the plan.

A May, 2000 interim consent order required the resignations of trustees Victor L. Shada, Ron Costa, and Terry Smith, and appointed Thomas A. Dillon as independent fiduciary to manage the plan. On January 18, 2001, the court ordered the termination of the Trust due to insolvency, and placed the Trust into quasi-bankruptcy to protect its participants, marshall its assets and satisfy its creditors. Department action continues against the former trustees of the defunct plan for payment of past due claims and restoration of losses to the plan. McLaughlin has filed for personal bankruptcy, but has agreed not to challenge any claims filed on behalf of TMET.

The Labor Department credits TMET plan participants who reported delays of as long as five months in paying dental benefit claims for prompting the investigation. “People having trouble getting benefits claims paid should contact us,” said Bette Briggs, regional director of the Department’s Pension and Welfare Benefits Administration in San Francisco. “Unpaid claims are often the first sign that a plan is in financial trouble.” Briggs encourages workers to contact her office at 415.975.4600 if they have questions or suspect abuse of their pension, health or other benefit plans.

The consent judgment resulted from an investigation conducted by PWBA’s San Francisco Regional Office. It was filed on May 8, 2001, in the United States District Court for the Eastern District of California, Sacramento Division, in Case No. CIV-S-00-0583 LKK/JFM.

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