New York District 6 Health and Pension Plan Officials Sued Over Plan Expenses

Archived News Release — Caution: Information may be out of date.

New York, New York - The U.S. Department of Labor has sued pension and health plan officials of New York City-based District 6 of the International Union of Industrial Service, Transport & Health Employees for allegedly paying excessive administrative expenses and improperly administering the plans.

“Our goal is to protect the hard-earned benefits promised by employers,” said Francis Clisham, director of the New York Regional Office of the Labor Department’s Pension and Welfare Benefits Administration (PWBA), which investigated the case.

The department’s suit, filed on March 19 in federal district court in Manhattan, names as defendants William Perry, administrator and trustee of the plans and union president; trustees Jerome Vuoso, Ludovic Marcovici and Francis Winn; and the union.

Perry allegedly violated his fiduciary duties under the Employee Retirement Income Security Act (ERISA) by issuing, endorsing and cashing 1,100 health plan checks made payable to others during the period 1993 to 1999. He failed to collect rent for the health plan from the union for occupying a building substantially owned by the health plan through a holding company known as District 6 Realty Corp. Perry also used pension and health plan assets to reimburse the union for expenses not incurred in the administration of the plans.

In addition, the suit alleges that Perry failed to diversify plan investments by investing over 90% of health plan’s assets in the building occupied by the union at 18 East 31st Street, New York City. The remaining trustees allegedly failed to monitor, or to take steps to correct the improper actions of, Perry.

The Labor Department asks the court to require the plan officials to restore to the plans all losses with interest or lost opportunity costs and to permanently bar them from serving any plan governed by ERISA. In addition, the suit seeks to require that the union and Perry undo any prohibited transactions with the plans.

Employers and workers can contact the Toll-Free Employee & Employer Hotline at 1.866.275.7922 for help with any problems relating to private-sector pension and health plans. The public should leave contact information and the office will return calls in the order received.

(Chao v. William Perry, et al
Civil Action No. 02-CV-337-2583)

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