Labor Department Restores Nearly $170,000 to Reno Software Firm’s 401(k) Plan

Archived News Release — Caution: Information may be out of date.

San Francisco, California - The U.S. Department of Labor has reached agreement with a now-defunct Reno company and its bonding firm to restore $167,530 owed to the bankrupt firm’s 401(k) plan. The action resolves all complaints by the Labor Department against Lodging & Gaming Systems Inc. (LGS), which develops software for casinos and hotels.

The Labor Department determined the firm failed to forward employee contributions and loan repayments deducted from employees’ pay to the company’s 401(k) plan. During proceedings in August, the U.S. Bankruptcy Court in Reno ruled the debt to the plan was not dischargeable, holding the firm’s owner, Steven H. Urie, responsible for the full $167,530 that had not been forwarded to the plan’s account.

The Labor Department sued Urie and LGS in June 2004 after an investigation revealed the defendants failed to collect delinquent employer contributions and to forward to the plan employee contributions and loan repayments deducted from employee paychecks during 2000, 2001 and 2003. Urie allegedly used the money to pay corporate debts and expenses after the corporation and two other companies he owned experienced financial problems. Urie and LGS filed for bankruptcy in December 2003. The company’s plan covered as many as 34 participants and had $755,428 in assets during 2002.

“We are very pleased to have successfully restored the full amount due these workers,” said Assistant Secretary of Labor for Employee Benefits Security Ann L. Combs. “This action demonstrates the department’s commitment to protect the retirement benefits of America’s workers.”

A consent judgment was entered in the U.S. District Court, District of Nevada, on February 27. An independent fiduciary was appointed to administer the plan and make final distributions to plan participants.

The San Francisco regional office of the Employee Benefits Security Administration (EBSA) investigated the case. Employers and workers with questions or concerns regarding their private-sector pension and health plans can contact the San Francisco regional office at 415.975.4600 or through EBSA’s toll free number, 1.866.444.EBSA (3272). Information is also available from the agency’s Web site at www.dol.gov/ebsa.

(Chao v. Urie)
Civil Action No. CV-N-04-0623-HDM-VPC
Bankruptcy Adversary Proceeding No. 04-05161-GWZ

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

Contact Name: Deanne Amaden
Phone Number: 415.975.4741