Maryland 401(k) Official Makes Restitution For Failure To Collect Court Judgment

Archived News Release — Caution: Information may be out of date.

Philadelphia, Pennsylvania - A federal court in Greenbelt, Maryland ordered the former independent fiduciary of the Bauer Associates, Inc. 401(k) plan in Bowie, Maryland to pay $2,000 to the plan and permanently barred him from serving as a trustee to any plan governed by federal employee benefits law, according to a consent judgment obtained by the U. S. Department of Labor.

“This action reaffirms our commitment to protect the hard-earned benefits promised by employers,” said Mabel Capolongo, Director of the Philadelphia Regional Office of the Pension and Welfare Benefits Administration.

A lawsuit, filed simultaneously with the judgment on May 10, states that John MacLean, the independent fiduciary appointed by the court to oversee the plan in 1998, allegedly colluded with defendant Thomas Bauer to reduce the amount of the debt owed by Bauer to the plan. The suit contends MacLean told Bauer he would not answer Labor Department questions regarding the payments. He also received reimbursement for time spent on the collusion with Bauer. In addition, MacLean failed to timely deposit for nine months the 1999 check of defendant Waters and did not pursue collection of the debt owed that year by Bauer.

In 1998, the department obtained separate consent judgments with plan officials Thomas Bauer and William Waters. The judgments, among other things, required the defendants to repay $161,280 over five years.

Bauer Associates sponsors the 401(k) plan for 78 participants and had $545,304 in assets as of December 31, 1998. The plan allows elective contributions to be deducted from employees’ paychecks every two weeks.

This suit, filed in federal district court in Baltimore, Maryland was investigated by the Washington, D.C. District Office of PWBA into alleged violations of ERISA. Employers and workers can contact the regional office at 215.861.5300 or PWBA's Toll-Free Employee & Employer Hotline number: 1.866.275.7922, for help with any problems relating to private-sector pension and health plans.

(Chao v. MacLean
Civil Action No. 02- CV- 1652)

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Archived News Release — Caution: Information may be out of date.