Bridgeport, Conn., Employer Ordered to Repay Over $401,000 to Employee Benefit Plans to Settle U.S. Labor Department Lawsuit

Archived News Release — Caution: Information may be out of date.

Boston, Massachusetts - The president of West End Lumber Company of Bridgeport, Connecticut, has been ordered to repay over $401,000 to two company employee benefit plans to resolve a lawsuit filed by the U.S. Department of Labor alleging violations of the Employee Retirement Income Security Act (ERISA).

Under the consent judgment and order, Sargent Shaw must pay $260,000 to the profit sharing plan and $141,199 to the money purchase plan. The restored assets will be allocated or distributed to eligible participants. Shaw has 60 days to make the payments, after which he will be prohibited from serving as a fiduciary with respect to any ERISA-covered plan. In addition, Shaw agreed to pay a civil penalty of $80,239.80 directly to the U.S. Department of Labor once he has made restitution to the plans.

“Plan officials have a duty to protect employees’ retirement assets,” said Assistant Secretary of Labor Ann L. Combs, of the department’s Employee Benefits Security Administration (EBSA). “The Labor Department will not hesitate to hold accountable those who do not fulfill their duties.”

The legal actions, filed with the U.S. District Court for the District of Connecticut, resulted from an investigation conducted by the Boston regional office of EBSA. The lawsuit alleged that both the company and Shaw failed to fulfill certain responsibilities as plan fiduciaries. Specifically, from November 1, 1998 to June 30, 2002, Shaw failed to adequately diversify plan investments, thereby failing to minimize the risk of large losses to each plan. The suit also alleged that significant losses resulted from these fiduciary violations, and that both the company and Shaw were liable for the losses.

In fiscal year 2005, EBSA achieved monetary results of $1.7 billion related to the 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 more information about ERISA or for help with problems relating to private-sector pension and health plans. Additional information can be found at www.dol.gov/ebsa.

(Chao v Sargent Shaw)
Civil Action Number: 3:06-CV-00642-MRK

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Archived News Release — Caution: Information may be out of date.

Contact Name: John M. Chavez
Phone Number: 617.565.2075