Labor Department Sues Trustee of St. Joseph, Michigan 401(k) Plan Over Improper Use of Plan’s Assets

Archived News Release — Caution: Information may be out of date.

St. Joseph, Michigan - The Labor Department has sued Edward L. Krieger, president of the now defunct National Sales Inc., St. Joseph, Michigan, for using a portion of the company’s 401(k) plan assets for purposes other than to pay plan expenses. In a separate complaint, the department sued Krieger in bankruptcy court to ensure that any debts owed to the plan are not discharged.

The department’s civil lawsuit, filed in U.S. District Court for the Western District of Michigan, alleges that Krieger violated the Employee Retirement Income Security Act (ERISA) by requesting funds from the company’s 401(k) plan and using some of the money for non-plan expenses. At the time of the violations, which allegedly occurred during 2001 through 2004, Krieger was the trustee of the 401(k) plan.

The suit seeks to require that Krieger repay any losses with interest owed to the plan and to undo any transactions prohibited by law. The suit also asks the court to appoint an independent fiduciary to collect, terminate and distribute any remaining plan assets to the plan participants, and to bar Krieger from serving as a fiduciary or service provider to any ERISA-covered employee benefit plan in the future.

“The department will aggressively enforce the law to protect the retirement funds of the hardworking men and women of this company,” said Joseph Menez, director of Employee Benefits Security Administration’s Cincinnati regional office. “Our legal actions are designed to restore money owed to the plan to pay future benefits to these workers.”

Employers and workers can reach EBSA’s Cincinnati regional office at 859.578.4680 or through EBSA’s toll-free number, 1.866.444.EBSA (3272), for help with problems relating to private-sector retirement and health plans. In fiscal year 2005, EBSA achieved record monetary results of $1.7 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

(Chao v.Krieger) Civil Action No. #06-00365-GJQ
In Re: Edward Loren Krieger Bankruptcy Case No. 05-18436-JRH

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Archived News Release — Caution: Information may be out of date.

Contact Name: Brad Mitchell
Phone Number: 312.353.6976