Palm Springs Clinic Owner Ordered to Pay Nearly $34,000 to Employee Profit Sharing Plan

Archived News Release — Caution: Information may be out of date.

San Francisco, California - The former owner of the now-defunct Palm Springs Orthopaedics Medical Clinic has been ordered to pay $33,600 to two employees covered by an employee profit sharing plan. An investigation by the U.S. Department of Labor found that Glenn D. Cunningham, who was the sole owner of the clinic and the plan fiduciary, illegally withdrew funds and failed to deposit participant loan repayments into the plan.

The department’s lawsuit, filed in U.S. District Court, Southern District of Mississippi, Western Division, alleged that the clinic, at Cunningham’s direction, retained more than $4,000 in salaries intended for participant loan repayments and that Cunningham withdrew at least $23,000 in plan assets for his own personal use.

“Those responsible for employee benefit plans cannot misuse the plan’s assets,” said Billy Beaver, regional director of the Labor Department’s Employee Benefits Security Administration (EBSA) in Los Angeles, which investigated the case. “The Labor Department will pursue every avenue to protect employee benefits and prevent those responsible from repeating abuses.”

Cunningham has since moved to Natchez, Mississippi, where he and his wife filed for voluntary bankruptcy protection. Pursuant to a consent judgment and order issued by the court, Cunningham is required to repay all missing funds by July 2007 and is permanently barred from acting as a fiduciary of employee benefit plans covered by the Employee Retirement Income Security Act.

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 with questions or concerns regarding their private-sector pension and health plans can contact the EBSA regional office in Los Angeles at 626.229.1000 or 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. Cunningham)
Civil Action No. CV-63-DCB-JCS

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Archived News Release — Caution: Information may be out of date.

Contact Name: Deanne Amaden
Phone Number: 202.693.1234/20234