Labor Department Sues Colorado Trustee For Failure To Make Timely Plan Deposit

Archived News Release — Caution: Information may be out of date.

Denver, Colorado - The U.S. Department of Labor sued the trustee of the 401(k) profit sharing plan of Denver-based Salazar Associates International, Inc. (SAI) for failing to timely deposit more than $68,000 of employees’ contributions into the corporation’s 401(k) plan. The suit was filed January 30, 2001 in federal district court in Denver.

Named as a defendant in the suit was Michael J. Salazar, who was also the co-owner of SAI.  The suit alleged from 1995 to June 1998, Salazar withheld $68,507.22 from employees’ paychecks, but failed to deposit the money in the corporation’s 401(k) plan.  The plan was established on January 1, 1990, as a deferred compensation plan that allowed employees to elect to defer a portion of their compensation for Salazar to contribute to the plan.  SAI provides engineering and environmental services.

Salazar’s failure to timely deposit employees’ contributions to the plan violated provisions of the Employee Retirement Income Security Act (ERISA).  He also failed to administer the plan assets solely in the interests of the plan participants, and he enabled co-trustee Marilyn L. Salazar, now deceased, to also breach her fiduciary responsibility of insuring employees’ withholdings were forwarded to the plan.

The suit seeks to have Salazar restore to the plan all losses to participants, with interest, stemming from the actions of Salazar and former co-trustee Marilyn L. Salazar; to appoint an independent trustee to manage the plan’s assets at Salazar’s expense; and to permanently bar Salazar from serving as a fiduciary to any plan covered by ERISA.

“The U.S. Department of Labor is committed to protecting the benefits promised by employers,” said Gregory Egan, director of PWBA’s Kansas City Regional Office.

Employers and employees can reach the Kansas City office of PWBA at 816.426.5131 for help with problems relating to private-sector pension and health plans.

The suit resulted from an investigation conducted by the Kansas City Regional Office of the Labor Department’s Pension and Welfare Benefits Administration into violations of ERISA.

(Chao v. Michael J. Salazar
Civil Action No. 02-K-183)

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Archived News Release — Caution: Information may be out of date.