Executives Of Defunct Maryland Computer Firm Sued To Recover 401(K) Assets

Archived News Release — Caution: Information may be out of date.

Silver Spring, Maryland - The U.S. Department of Labor sued executives of Silver Spring, Maryland-based Information Systems Solutions International (ISSI), Inc. on March 13, 2003, to recover losses on employee contributions that were not remitted to the company’s 401(k) plan.

The lawsuit alleges that James L. Finneran and Philip R. Wright violated their duties under the Employee Retirement Income Security Act (ERISA) as fiduciaries of the 401(k) plan. The defendants allegedly failed to pay wages or remit employee contributions to the plan’s custodian during the Fall of 2000. The department simultaneously filed separate adversary complaints against the defendants to prevent them from discharging any debt owed to the 401(k) plan in their respective bankruptcy proceedings.

The suit seeks a court order requiring defendants to repay any losses with interest to the plan, to offset their accounts in order to restore assets owed to the plan, to permanently bar them from serving in positions of trust to any ERISA-covered plan in the future, and remove them from their positions with the plan. The department also asks the court to appoint J.M. Pension Advisory, Inc. of Olney, Maryland to manage and administrate the plan.

ISSI was a computer consulting firm with over 200 employees nationwide before ceasing business operations in 2001. Finneran, vice president of the company, and Wright, the chief executive officer, each filed for Chapter 7 bankruptcy in 2002. As of December 2000, the 401(k) plan had 51 participants and $1,624,744 in total assets.
The suit, filed in federal district court in Baltimore, Maryland, resulted from an investigation conducted by the Washington District Office of the department’s Employee Benefits Security Administration (EBSA).

Mabel Capolongo, Director of EBSA’s Philadelphia Regional Office said, “Despite the financial hardships of employers, the law clearly states that employee contributions must be forwarded to the plan to pay future promised benefits.”

Capolongo noted that employers with similar problems, who are not yet the subject of an investigation by EBSA, may be eligible to participate in the department's Voluntary Fiduciary Correction Program (VFCP).
Participation in the VFCP requires employers to make workers whole but allows them to avoid EBSA enforcement actions, civil penalties and any applicable excise taxes. For more information see www.dol.gov/ebsa.

Employers and workers can reach the Philadelphia Regional Office at 215.861.5300 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. Finneran) Civil Action No. JFM03-686, (Chao v. Wright ) Bankruptcy Case No. ADV-03-5141-JS, (Chao v. Finneran) Bankruptcy Case No. ADV-03-5140-JS

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