U.S. Labor Department Obtains Judgment Restoring Funds to Maumee, Ohio, Workers’ Retirement Program

Archived News Release — Caution: Information may be out of date.

Cincinnati, Ohio - The U.S. Department of Labor has obtained a judgment requiring that $38,247.72 be restored to employees’ 401(k) plan and permanently barring the president of Whitney Electric Corporation Inc., Maumee, Ohio, from serving in a fiduciary capacity for employee benefit plans governed by the Employee Retirement Income Security Act (ERISA).

“The department will act when plan fiduciaries fail to carry out their duty to protect the retirement plan assets held on behalf of participants,” said Joseph Menez, director of the department’s Cincinnati regional office of the Employee Benefits Security Administration (EBSA).

The judgment resolves a lawsuit filed by the Labor Department, which alleged that company president Richard Farrar failed to remit employee contributions to the 401(k) plan from January 1999 through September 2002. The suit further alleged that Farrar violated ERISA when he failed to timely remit to the plan loan repayments deducted from employee paychecks from November 2001 through September 2002 and commingled the contributions with company assets.

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 correct violations of the law but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes. For more information about the VFCP, see www.dol.gov/ebsa.

The suit, filed in federal district court in Ohio, resulted from an investigation conducted by the Cincinnati regional office of EBSA. Employers and workers can reach the Cincinnati regional office at 859.578.4680 or through EBSA’s toll-free number, 1.866.444.EBSA (3272), for help with problems relating to private-sector retirement and health plans. In fiscal year 2004, EBSA achieved record monetary results of $3.1 billion related to the pension, 401(k), health and other benefits of millions of American workers and their families.

Chao v. Richard Farrar
Civil Action No.: 3:04CV7771

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Archived News Release — Caution: Information may be out of date.