Labor Department Sues Hennepin County Financial Group For Failing to Forward Employees’ Withholdings to Pension Plan

Archived News Release — Caution: Information may be out of date.

Minneapolis, Minnesota - The U.S. Department of Labor filed suit in federal district court here against officials of the 401(k) plan sponsored by Tuschner & Company, Inc. (TCI) for its employees. TCI was a Hennepin County financial group that filed for Chapter 7 bankruptcy on March 10, 2000.

According to the department's lawsuit, defendants John M. Tuschner, Dennis B. Reiter and Francis A. Dahlberg, plan trustees, did not put money into the 401(k) plan that was withheld from workers’ paychecks and did not keep these funds separate from TCI’s general assets. This failure occurred from February through June 1999.
TCI also withheld money from paychecks of some employees as loan repayments to the plan and failed to segregate these repayments. The funds were commingled with the company's general fund and used for operating expenses.

TCI's 401(k) plan had 25 participants and assets of $213,400 as of December 31, 1998.

The lawsuit seeks to have the defendants repay the plan for any losses, including lost opportunity costs, resulting from their fiduciary breaches, and permanently bar them from serving as fiduciaries or service providers to any employee benefit plan covered by the Employee Retirement Income Security Act (ERISA).

If necessary, the department is asking that the defendants' own accounts be used to restore the losses they caused. The lawsuit is also seeking to have the court appoint an independent fiduciary to oversee the plan after the trustees are removed.

“The department is only a phone call away to protect the benefits promised by employers," said Gregory Egan, director of the Kansas City Regional Office of the department's Pension and Welfare Benefits Administration, whose office conducted the investigation. "Employers and workers can reach us at 816. 426.5131 for help with any problems relating to pension and health plans provided in the private-sector."

The lawsuit was filed on January 14, 2002 in the federal district court in the District of Minnesota in Minneapolis.

(Chao v. John M. Tuschner
Civil Action No. 02-CV-114)

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Archived News Release — Caution: Information may be out of date.