U.S. Labor Department Sues Falcon Communications Group to Protect Contributions to SIMPLE IRA Plan

Archived News Release — Caution: Information may be out of date.

Minneapolis, Minnesota - The U.S. Department of Labor has sued Falcon Communications Group Inc., Minneapolis, Minnesota, and its owner to recover employee contributions that they failed to forward to the workers’ SIMPLE IRA plan.

“The law requires plan fiduciaries to act responsibly in managing money set aside for retirement plans for the benefit of workers and their families,” said Steven Eischen, director of the Employee Benefits Security Administration’s (EBSA) Kansas City Regional Office. The Kansas City regional office investigated the case.

The department’s lawsuit, filed in United States District Court for the District of Minnesota, alleges that Falcon Communications Group and Jim Frisco violated the Employee Retirement Income Security Act (ERISA) when they failed to forward in a timely manner SIMPLE IRA plan contributions withheld from employees’ paychecks for intermittent pay periods from January 14, 2001 through May 31, 2002 and failed to segregate and forward contributions withheld from employees’ paychecks for pay periods from July 15, 2002 through August 8, 2003.

The suit seeks to require the defendants to repay all contributions owed to the plan and restore all losses to the plan with earnings. It also asks the court to permanently bar Frisco from serving as a fiduciary to any plan governed by ERISA.

Employers with similar problems, who are not yet the subject of an investigation by EBSA, may be eligible to participate in the department’s Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP requires employers to correct any violations but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes. For more information about the VFCP, see www.dol.gov/ebsa.

Employers and workers with questions or concerns regarding their private-sector pension and health plans can contact the EBSA regional office in Kansas City at 816.426.5131 or EBSA’s toll free number, 1.866.444.EBSA (3272). In fiscal year 2005, EBSA achieved record monetary results of $1.7 billion related to pension, 401(k), health and other benefits of millions for American workers and their families.

(Chao v. Frisco)
Civil Action No. 0:06-cv-01511-PAM-JSM

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

Contact Name: Brad Mitchell
Phone Number: 312.353.6976