U.S. Labor Department Obtains Settlement Restoring Funds to Profit Sharing Plan of Defunct Charleston Business

Archived News Release — Caution: Information may be out of date.

Charleston, West Virginia - The U.S. Department of Labor has obtained a consent judgment requiring Richard Lewis and Benefit Services Inc. (BSI) to restore $16,820 to the company’s profit sharing plan. The judgment follows a Labor Department investigation that found the defendants violated the Employee Retirement Income Security Act (ERISA) by making unauthorized distributions from the plan to themselves and others. BSI, a Charleston-based third party administrator of health plans, went out of business in April 2000.

“Plan fiduciaries have a duty to act responsibly with the funds entrusted to them,” says Mabel Capolongo, director of the department’s Philadelphia regional office of the Employee Benefits Security Administration (EBSA).

The judgment resolves a lawsuit filed by the Labor Department July 2005, alleging that Lewis, the company’s owner and plan trustee, and BSI, the plan administrator, failed to properly distribute plan assets to participants after terminating the plan in 2000. Lewis was found to have made excessive benefit distributions to himself and others and was unable to account for numerous plan withdrawals. Both defendants also failed to ensure that all participants received their full benefit distributions in accordance with the terms of the plan.

The judgment removes Lewis and BSI from their positions with the plan and appoints Jackie Carmichael as an independent fiduciary with authority to administer, manage and dispose of plan assets, including final disbursements to participants. In addition, Lewis and BSI are permanently enjoined from serving as trustees, fiduciaries, advisors or administrators of any ERISA-covered plan.

The judgment, entered in federal district court in Charleston, resulted from an investigation conducted by EBSA’s Philadelphia regional office. Employers and workers can reach the Washington district office at 301.713.2000 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 2005, EBSA achieved record monetary results of $1.7 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

(Chao v. Lewis)
Civil Action No.: 2:05-0581

U.S. Department of Labor news releases are accessible on the Department's Newsroom page. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the COAST office. Please specify which news release when placing your request at 202.693.7765 or TTY 202.693.7755. The U.S. Department of Labor is committed to providing America's employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit the Department's Compliance Assistance page.

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

Contact Name: Leni Uddyback-Fortson
Phone Number: 215.861.5102