Sudbury, Massachusetts Employer Restores More Than $10,600 to 401(k) Plan To Settle U.S. Labor Department Lawsuit

Archived News Release — Caution: Information may be out of date.

Boston, Massachusetts - Landscape Design Inc., Sudbury, Massachusetts, and its owner have restored $10,678.93 to its 401(k) plan to resolve a lawsuit filed by the U.S. Labor Department that alleged violations of the Employee Retirement Income Security Act (ERISA).

Under a court order, Landscape Design and owner, David J. Howe, were ordered to make restitution for all employee and employer contributions plus opportunity losses to the plan. The restored funds will be allocated to all eligible participants except Howe. The court also required that an independent fiduciary manage or terminate the 401(k) plan and properly distribute the assets to participants. Howe is barred from serving in a fiduciary capacity to any ERISA-covered plan for five years.

Landscape Design was the administrator and Howe the trustee for the plan, which was adopted in January 1999 to provide retirement benefits for company employees. In October 2004, following an investigation by the department’s Employee Benefits Security Administration (EBSA), a lawsuit was filed alleging that money was withdrawn from the plan in August 2001 and deposited into the company’s business account. The suit also charged that the defendants failed to forward to the plan employee contributions withheld from wages from 2001 through 2004 or failed to forward such amounts in a timely manner, as required by ERISA. The suit was filed in U.S. District Court in Boston.

“Plan administrators and trustees are required to function solely in the interests of plan participants and beneficiaries,” said James Benages, EBSA’s regional director. “When they fail to do so, the Labor Department will not hesitate to take appropriate legal action on behalf of those workers who placed their funds and their trust in the plan.”

This case was investigated by EBSA’s Boston regional office. Employers and workers can reach the Boston office at 617.565.9600. Help with problems relating to private-sector retirement and health plans can also be obtained through EBSA’s toll-free number, 1.866.444.EBSA (3272).

(Chao v David J. Howe, et al)
Civil Action No. 04-12140-MEL

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Archived News Release — Caution: Information may be out of date.