Labor Department Sues Plan Officials Of Production Workers Local 148 for Engaging in Multiple Prohibited Transactions

Archived News Release — Caution: Information may be out of date.

New York, New York - The U.S. Department of Labor filed a complaint on January 17, 2003, alleging multiple violations of the Employee Retirement Income Security Act (ERISA) by plan officials for the Production Workers Union Local 148 welfare and pension plans.

Named as defendants were Joseph Nardone, Jr., the current plan administrator, who, in 1998, was removed from his position as the local’s president as well as from his position as the trustee for the welfare and pension plans, and Ralph Somma, president of Brueton Industries, a contributing employer to the plans who is the current employer-trustee.

“This action demonstrates our commitment to protect the hard-earned benefits of American workers,” said Francis Clisham, director of the department’s New York Regional Office of the Employee Benefits Security Administration, which investigated the case.

According to the department’s suit, filed in federal district court in Newark, New Jersey, the defendants imprudently caused the welfare plan to purchase property for $300,000, intended for use as a parking lot near the funds’ office, on the same day that the seller purchased the property for $125,000.

The department’s complaint also alleged that the defendants caused the welfare plan to pay benefits for Sylvia Nardone even though she was not eligible to receive benefits; the defendants caused the plans to improperly pay for Nardone, Jr.’s attorney representing him in the Local 148 trusteeship litigation; the defendants caused the welfare plan to pay the salary plus expenses for former Local 911 president Edward Bigham, Jr., even though he did not perform commensurate services for the plan, and that Nardone Jr. caused the welfare fund to pay for expenses incurred by the pension plan providing benefits to employees of the union and the plans from February 1996 through July 1999.

The department is seeking to restore to the plans all losses, permanently bar the defendants from serving any ERISA-covered plans, and remove Sylvia Nardone as an eligible welfare plan benefit recipient. The department is also seeking to have the local union repay the plans for the fees paid to Nardone Jr.'s attorney. Finally, the department seeks to offset the individual retirement plan account balances of Nardone Jr. and Somma to repay amounts they owe to the plan.

The membership of Local 148 includes of a variety of factory workers in the five boroughs of New York, New Jersey and Long Island. In 1997, Local 148 absorbed the membership of United Services Employees Union Local 911. The Local 148 membership has fluctuated over the years. In 1997, there were approximately 2000 members.

Employers and workers can contact the New York Regional Office at 212.337.2462 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. Joseph Nardone, Jr., Ralph Somma, et al.)
Civil Action No. CV-03-181 (William J. Martini)

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