U.S. Labor Department Sues Framingham, Massachusetts, Employer to Restore Funds to Company 401(k) Plan

Archived News Release — Caution: Information may be out of date.

Boston, Massachusetts - The U.S. Department of Labor has sued the president of now-defunct One Source Computer Corporation, Framingham, Massachusetts, seeking restoration of funds to the company’s 401(k) plan.

The lawsuit was filed in the U.S. District Court for the District of Massachusetts against Minh Q. Nguyen, sole trustee of the plan; One Source Computer Corporation, plan sponsor; and One Source Computer Corporation 401(k) Plan. The plan was established January 1, 1999, to provide retirement and death benefits for employees of the company.

The Labor Department’s suit alleges that, on November 14, 2002, Nguyen instructed the custodian of the plan’s assets to liquidate and transfer them to his personal bank account. Of the $38,234.85 transferred, a total of $28,647.18 represented benefits for eight other plan participants. Between November 14 and November 22, 2002, Nguyen depleted the entire amount in his personal bank account without making any distributions to the eight additional plan participants.

Said James Benages, Boston regional director for the department’s Employee Benefits Security Administration (EBSA), “It is totally unacceptable for the trustee of an employee benefit plan to use the assets of the plan for his or her own private purposes. Such action is a clear violation of federal retirement law, and the filing of this lawsuit demonstrates that we will not hesitate to resort to litigation to ensure that plan participants receive the benefits to which they are entitled.”

The department’s suit asks the court to permanently bar Nguyen from serving as a fiduciary to any employee benefit plan covered by the Employee Retirement Income Security Act. The suit also asks the former plan trustee to undo his prohibited transactions and restore all plan losses including interest resulting from his improper actions.

The Labor Department’s legal action resulted from an investigation conducted by EBSA’s Boston regional office. In fiscal year 2005, EBSA achieved 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 Boston regional office at 617.565.9600 or EBSA’s toll-free number, 1.866.444.EBSA (3272), for help with problems relating to private-sector pension and health plans. Additional information can be found at www.dol.gov/ebsa.

(Chao v Minh Q. Nguyen, et al)
Civil Action Number: 06-CA-10427-RGS)

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

Contact Name: John M. Chavez
Phone Number: 617.565.2075