Labor Department Sues Defunct Pittsburgh Company Over 401(k) Retirement Savings Plan Violations

Archived News Release — Caution: Information may be out of date.

Philadelphia, Pennsylvania - The U.S. Labor Department sued Expert Dry Wall Company Inc. and its president Valerie Kelly for transferring plan assets to Kelly and her sister from the company’s 401(k) savings plan and other violations. The company ceased operations October 2001.

“The Department of Labor will aggressively enforce the law to protect the retirement funds of this nation’s hardworking men and women,” said Mabel Capolongo, director of the Philadelphia regional office of the Employee Benefits Security Administration (EBSA). “Our legal action will ensure that these workers receive the benefits due them.”

The lawsuit alleges that Kelly violated her duties as sole trustee to the plan under the Employee Retirement Income Security Act. In addition to the unauthorized transfers, she allegedly failed to forward employee contributions in a timely fashion and to pay interest on the delinquent contributions owed to the plan between January 2000 and May 2001. The suit also alleges Kelly failed to distribute to each plan participant their respective balance when the plan was terminated in November 2002.

The suit seeks a court order requiring the defendants to restore all losses, including lost opportunity costs, removing them as plan fiduciaries and appointing an independent fiduciary to manage the plan. The department also asks that the defendants be permanently barred from serving as fiduciaries to any plan in the future.

The suit, filed in the Federal District Court for the Western District of Pennsylvania, resulted from an investigation conducted by EBSA’s Philadelphia regional office.

(Chao v. Kelly)
Civil Action No.: 2:06-cv-156

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Archived News Release — Caution: Information may be out of date.

Contact Name: Leni Uddyback-Fortson
Phone Number: 215.861.5102