Reston, Virginia Trustees Sued For Failure To Remit Employees' 401(K) Contributions And Loan Payments

Archived News Release — Caution: Information may be out of date.

Washington, DC - The U.S. Department of Labor filed suit on June 20 against trustees of the defunct IBIS Corporation of Reston, Virginia, for failure to pay interest to the company’s 401(k) plan on $20,895 in delinquent employee contributions and loan repayments.

IBIS Corporation, which terminated its operations July 31, 1998, was in the business of computer system integration. The corporation’s 401(k) plan covered about 30 participants and had $554,681 in assets at the end of 1996.

The lawsuit alleges that trustees Fred Molthen and James M. Mooney violated their duties under the Employee Retirement Income Security Act (ERISA) by failing to pay the interest due on delinquent contributions. The department believes that the delinquent contributions and loan repayments have now been repaid.

As relief, the lawsuit seeks a court order requiring payment of the interest due on delinquent contributions. The lawsuit also asks the court to remove the defendants as plan trustees and to appoint an independent trustee to manage the plan’s affairs, including termination of the plan and distribution of its assets to plan participants and beneficiaries.

The lawsuit was filed in federal district court in Alexandria, Virginia. The court action resulted from an investigation conducted by the Washington, DC District Office of the department’s Pension and Welfare Benefits Administration into alleged violations of ERISA.

“This action reaffirms our commitment to protect the hard-earned benefits promised by employers,” said Mabel Capolongo, Director of PWBA’s Philadelphia Regional Office. “Employers and workers can reach us at 301.713.2000 for help with any problems relating to private-sector pension and health plans.”

(Chao v. Molthen
Civil Action No. 01-972-A)

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Archived News Release — Caution: Information may be out of date.