Tennessee Corporation Ordered to Pay Approximately $300,000 To Company Retirement Plan

Archived News Release — Caution: Information may be out of date.

Atlanta, Georgia - The U.S. Department of Labor has obtained a consent judgment and order requiring Elk Valley Professional Affiliates, Inc. (EVPA) of Fayetteville, Tennessee, to restore $295,455 to the company’s retirement plan and to pay $29,545 in civil monetary penalties to the federal government for violating federal employee benefits law.

The judgment also bars Mark Waters permanently and David Groce for seven years from serving in a fiduciary capacity to any employee benefit plan governed by the Employee Retirement Income Security Act (ERISA).

“Those entrusted to manage workers’ retirement benefits cannot use those funds for personal gain,” said Ann L. Combs, Assistant Secretary of Labor for the Employee Benefits Security Administration (EBSA). “The department will not hesitate to act to ensure that retirement assets are used solely to benefit workers and their families.”

In April 2003, the department sued the company, Waters and Groce for using plan assets to purchase EVPA stock between November 1995 and May 1996 for more than fair market value. Waters and Groce both served on the administrative committee of the company’s employee stock ownership plan (ESOP). The suit also alleged that these defendants improperly secured an ESOP loan with a certificate of deposit owned by the plan and then used the certificate to pay off the loan. Waters and Groce also used plan assets to pay closing expenses to Telesis, a broker Waters hired to find a buyer for the company, and failed to maintain a fidelity bond to protect the plan against losses as required by law.

EVPA, which was purchased by Deaconess HomeCare, Inc. in December 1996, operated home health care agencies and home medical equipment facilities in Tennessee, northern Alabama and Mississippi.

The suit was filed in federal district court in Winchester, Tenn. The civil investigation leading to the suit was conducted by the Atlanta regional office of EBSA. Employers and workers can reach the Atlanta office at 404.562.2156 or toll-free number at 1.866.444.EBSA (3272), for help with problems relating to private-sector pension and health plans.

(Chao v. Elk Valley Professional Affiliates, Inc.)
Civil Action No. 4:03-CV-17

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Archived News Release — Caution: Information may be out of date.

Contact Name: Gloria Della/David James
Phone Number: 202.693.8664/202.693.4676