Labor Department Judgment Orders GMR Plastics and Owner to Repay Pension Plan

Archived News Release — Caution: Information may be out of date.

Cincinnati, Ohio - GMR Plastics Corp. in Wayne County, Michigan and company owner Gary M. Raykhinshteyn were ordered to pay $12,257.74, in losses and interest to the company’s pension plan in a judgment obtained September 11 by the U.S. Department of Labor.

The company and Raykhinshteyn were removed from their positions with the plan, and Raykhinshteyn was barred permanently from serving as a fiduciary or service provider to any employee benefit plan governed by the Employee Retirement Income Security Act (ERISA).

The court named Joseph S. Moynihan and Robert H. Bosart, McDonald Investments - a KeyCorp Company of Birmingham, Michigan, as the independent co-fiduciaries to manage the plan. They are to liquidate the plan’s assets, communicate with participants regarding the plan termination and their disbursement options and file termination papers with the IRS and Department of Labor.

In March, defendants were sued for failing to remit employee contributions to the plan. The department’s lawsuit alleged that the withholdings of the participating employees were commingled with the general assets of GMR to benefit the company or Raykhinshteyn. The suit also alleged the plan did not have a fidelity bond required by federal pension law.

The company, a subchapter S corporation producing plastic parts and products, went into receivership on April 17, 1998, and the receivership was dissolved on December 11, 1998. The company had a simplified employee pension plan (SEP-SAR) with participants voluntarily electing to make salary deferrals to the plan.

“Our goal is to assure that consumers know the department is only a phone call away to help protect the benefits promised by employers,” said Joseph Menez, director of the Cincinnati Regional Office of the department’s Pension and Welfare Benefits Administration. “Employers and workers can reach us in Cincinnati at 859.578.4680 or in the agency’s Detroit District Office at 313.226.7450 for help with any problems relating to pension and health plans provided in the private-sector.” The Cincinnati office conducted this investigation.
The judgment was entered in the federal district court in the Eastern District of Michigan in Ann Arbor.

(Chao v. Gary Raykhinshteyn
Civil Action No. 01-60056)

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