U.S. Labor Department Obtains Settlement Restoring More Than $118,000 To Retirement Fund of Defunct Lehigh County Company

Archived News Release — Caution: Information may be out of date.

Philadelphia, Pennsylvania - The U.S. Department of Labor has obtained a consent judgment requiring Cathy Milder to restore $118,736 to her company’s pension plan. Milder was a trustee of the benefit plan and owner of the plan’s sponsor, G&M Land Development Inc., a Wescosville, Pennsylvania, mobile home business that ceased operations in 1999.

“The Labor Department will not hesitate to hold accountable those who misuse workers’ retirement benefits,” said Ann L. Combs, assistant secretary of labor for employee benefits security. “Plan trustees have a legal responsibility to properly manage and protect the funds entrusted to them.”

The consent judgment resolves a lawsuit filed by the Labor Department in December 2004 alleging that plan trustees Charles and Cathy Milder violated the Employee Retirement Income Security Act (ERISA) between 1997 and 1999. According to the suit, the Milders caused the plan to execute notes with borrowers who were purchasing mobile homes from their business, but did not ensure that all loan payments were deposited into the plan. The Milders also failed to repossess the homes when the buyers defaulted, and purchased real estate with plan assets but failed to title the property in the plan’s name. Some of the parcels were sold, but the proceeds were not deposited into the plan. Finally, the Milders transferred plan money into an attorney’s escrow account and then made interest-free loans to various individuals. A default judgment was entered against defendants Charles Milder and G&M on July 21, 2005.

The consent judgment removes Cathy Milder as a plan trustee and appoints an independent fiduciary to terminate the plan and distribute benefits to plan participants and beneficiaries. The court also barred the Milders and G&M from serving in a fiduciary capacity to any ERISA-covered plan in the future.

The judgment, entered in the federal district court for the eastern district of Pennsylvania, resulted from an investigation conducted by the Philadelphia regional office of the Employee Benefits Security Administration (EBSA). 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. Employers and workers can contact the regional office at 215.861.5300 or can call EBSA’s toll-free number, 1.866.444.EBSA (3272), for help with problems relating to private-sector pension and health plans.

(Chao v. Milder)
Civil Action No.: 04-5999

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

Contact Name: Leni Uddyback-Fortson
Phone Number: 215.861.5103