Please note: As of January 20, 2021, information in some news releases may be out of date or not reflect current policies.
News Release
Labor Department Restores 401(K) Funds To Phoenix Software Company Workers
Archived News Release — Caution: Information may be out of date.
Los Angeles, California – A Phoenix software company and two of its former executives will restore more than $180,000 to the Gateway Data Sciences Corporation 401(k) Plan, according to a settlement agreement and a consent judgment entered on April 10, 2002, by the United States District Court in Phoenix.
The judgment resolves a lawsuit filed by the U.S. Department of Labor on November 13, 2001, against Gateway Data Sciences Corporation; Michael Gordon, the company’s former chief executive officer; and Vickie Jarvis, the former chief financial officer, for violations of the Employee Retirement Income Security Act of 1974 (ERISA). The Labor Department alleged that violations of ERISA occurred when Gateway, Gordon and Jarvis failed to forward contributions withheld from employee paychecks to the 401(k) Plan, enabling the company to use the funds to pay operating expenses.
Under the terms of the judgment, Gateway Data Sciences Corporation, currently undergoing Chapter 11 bankruptcy reorganization, will pay $80,972 to the 401(k) Plan upon confirmation of the reorganization plan. Gordon and Jarvis will pay $100,088 to the 401(k) Plan within ten days. None of the money restored to the 401(k) Plan will be allocated to Jarvis and Gordon’s 401(k) participant accounts. The judgment also bars Gordon and Jarvis from serving as trustees or fiduciaries to any employee pension benefit plan.
This court action was a result of an investigation conducted by the Los Angeles Regional Office of PWBA, headed by Billy Beaver. It is part of an ongoing initiative to insure compliance with ERISA fiduciary standards with respect to timely deposit of employees’ contributions to 401(k) plans.
Beaver said, “This case exemplifies our commitment to protect the hard-earned benefits of workers. Workers can help us protect their plan benefits by contacting the Toll-Free Employee & Employer Hotline at 1.866.275.7922, if they have questions or suspect abuse of their pension, health or other benefit plans.”
(Chao v. Gateway Data Sciences Corporation
Civil Action No. 01-2204 PHX-FJM)
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Archived News Release — Caution: Information may be out of date.