National Recycling Institute's Profit Sharing Plan Ordered to be Terminated and Assets Distributed to Participants

Archived News Release — Caution: Information may be out of date.

Philadelphia, Pennsylvania - The Department of Labor obtained a consent judgment against National Recycling Institute, Inc. (NRI) of Philadelphia and its owner requiring that they terminate the company's profit-sharing plan and distribute the remaining assets to other participants in the plan. The defendants allegedly used plan funds in their own interest.

Defendant Stewart R. Golen, the plan's trustee, is to pay the plan $8,930.04 no later than February 26, 2002, in addition to a penalty to the Labor Department for 20 percent of the recovery as required under the Employee Retirement Income Security Act (ERISA). The consent judgment, entered December 28 in federal district court in Philadelphia, also bars Golen and NRI from serving as fiduciaries to any ERISA-covered employee benefit plan.
National Recycling was in the waste paper business and ceased operations in approximately 1995. Its plan had 50 participants and $28,318 in assets as of February 2001.

In its lawsuit, filed simultaneously with the consent judgment on December 28, the department alleged that from November 1994 through April 1995, Golen signed checks against the plan's bank account for approximately $45,000 payable to NRI and to Integrated Waste Management, for which Golen served as chief executive officer. Since December 1994, the plan allegedly maintained no records reflecting the value or types of investments held by the plan, individual participant account balances or earnings of the plan on its investments.

The suit further alleged that since December 31, 1994, Golen sold the plan's investments in corporate securities and paid himself or the companies he controlled the proceeds from the sales and did not maintain records of these payments. The department further alleges the plan's assets would have earned a greater return if they had been invested prudently rather than in the non-interest bearing accounts in which Golen maintained them.

(Chao v. Stewart R. Golen
Civil Action No. 01-CV-7148)

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Archived News Release — Caution: Information may be out of date.