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News Release
Labor Department Sues Longshoremen’s Local 1969 Plans’ Trustees and Service Providers for Misuse of Fund Assets
Archived News Release — Caution: Information may be out of date.
Chicago, Illinois - The U.S. Department of Labor has sued trustees and service providers of the pension, welfare and off-season supplement plans of the Portage, Ind.-based International Longshoremen’s Association Local 1969 for violations of federal pension law.
The suit alleges the plans’ trustees authorized multi-million dollar payments to parties-in-interest in connection with two Nevada real estate investments. Named in the lawsuit were trustees Andre Joseph, Raymond Sierra, David Lynch and Edward Rentz as well as Michael A. Daher, sole owner and investment advisor with Leader in Marketing Fulfillment, Inc. (LMF) and John Sherwood Dunsmoor who had power of attorney over the pension plan account.
Daher and Dunsmoor equally owned Qualified Investment Limited (QIL), a Nevada corporation formed in connection with the plans’ investments in real estate. Both were indicted and have pleaded guilty to various criminal charges with respect to the plans’ real estate investments.
The suit alleges violations of the Employee Retirement Income Security Act (ERISA) involving loans of $3.475 million by the plans through QIL for a residential development known as Grapevine Villas in Mesquite, Nev. The suit also alleges the plans improperly purchased a parcel of undeveloped property, also in Mesquite, known as the Chardonnay property. The suit alleges that the plans’ investments in these properties violated ERISA, because they involved prohibited transactions between the plans and parties in interest to the plans.
The suit, filed May 24 in federal district court in South Bend, Indiana, further alleges the trustees breached their responsibilities when they used plan funds to pay union and non-plan expenses.
The suit is asking that the trustees be removed from their positions with the plans and permanently barred from serving any ERISA-covered plans. It also seeks to offset the trustees’ own individual plan accounts to help restore the losses to other participants and asks the court to name an independent fiduciary to administer the plans and undo the prohibited transactions.
“This action reaffirms our commitment to protect the hard-earned benefits promised by employers,” said Kenneth Bazar, director of the Chicago regional office of the department’s Pension and Welfare Benefits Administration, which investigated the case.
Employers and workers can contact the regional office at 312.353.0900 or call the Toll-Free Employee & Employer Hotline at 1.866.275.7922 for help with problems relating to private-sector pension and health plans.
(Chao v. International Longshoremen's Association Local 1969, et al
Civil Action No. 3:02CV380RM)
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Archived News Release — Caution: Information may be out of date.