Labor Department Sues Official of Terminated Canton, Ohio Pension Plan to Recover Delinquent Contributions

Archived News Release — Caution: Information may be out of date.

Cincinnati, Ohio - The U.S. Department of Labor filed both a complaint and an adversary action on January 31, 2003 against the trustee of the Comco, Inc. 401(k) plan for failing to forward employee withholdings to the plan.

“This action demonstrates our commitment to protect the hard-earned benefits of American workers," said Joseph Menez, director of the department’s Cincinnati Regional Office of the Employee Benefits Security Administration (EBSA), which investigated the violations of the Employee Retirement Income Security Act (ERISA).

The department’s complaint, filed in federal district court in Cleveland, alleged that company president Douglas Ray Smith failed to remit $6,675 in contributions withheld from employees’ paychecks during October 2001 and again from December 2001 until March 2002, using the money to benefit the company. Smith also failed to file required reports with the federal government.

The suit asks the court to require Smith to repay the contributions plus interest still owed to the plan to be distributed to other participants and to bar him permanently from serving as a fiduciary to any ERISA-covered plan.

The department also alleged Smith’s failure to forward withheld employee contributions in the adversary action it filed simultaneously in the U.S. Bankruptcy Court in Canton. The action seeks to prevent him from discharging debts still owed to the plan, which he terminated on March 19, 2002 and for which its 31 participants have already received distributions. The plan had $229,838 in assets as of February 28, 2001.

Comco, Inc. manufactured parts for automobiles until the company was dissolved in March 2002. The company’s assets were auctioned on April 30, 2002 to pay the company’s secured creditors. In July 2002, Smith filed for Chapter 7 bankruptcy protection.

Employers and workers can contact the regional office at 859.578.4680 or EBSA’s toll free number, 1.866.444-EBSA (3272), for help with any problems relating to private-sector pension and health plans.

(Chao v. Douglas Ray Smith and Comco, Inc. 401(k) Plan)
Civil Action No. 5:03CV0199
(In re Douglas Ray Smith) Case No. 02-63079, U.S. Bankruptcy Court

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Archived News Release — Caution: Information may be out of date.