Labor Department Sues Torrance Firm to Protect Employees’ 401(k) Funds

Archived News Release — Caution: Information may be out of date.

San Francisco, California - The U.S. Department of Labor has sued two senior executives of Torrance-based Advanced Hi-Tech Corporation for failing to forward employee contributions to the company’s 401(k) profit sharing plan.

The suit, filed in U.S District Court in Los Angeles, seeks at least $78,000 in employee contributions and lost opportunity income for 87 employees who are plan participants. The defendants allegedly commingled the withheld amounts with the company’s general assets between February 2003 and January 2004.

The defendants named in the suit are company president Fou-Sen Chang, of PalosVerdes and executive vice president Yow-Yieh Chang, of Palos Verdes Estates.

The suit seeks to permanently bar the two defendants from serving as fiduciaries or service providers of employee benefit plans covered by the Employee Retirement Income Security Act. In addition, the lawsuit seeks the appointment of an independent fiduciary to administer the plan, distribute its assets to plan participants and beneficiaries, and oversee the plan’s termination.

Advanced Hi-Tech is a software company specializing in the design, manufacturing and sales of print controllers for digital copiers.

“The department is committed to protecting the benefits of America’s workers and retirees,” said Billy Beaver, regional director of the Labor Department’s Employee Benefits Security Administration (EBSA) in Los Angeles, which investigated the case. “This is money that was deducted from employees’ paychecks that belongs to the workers. The department will not hesitate to seek recovery from plan sponsors and fiduciaries.”

The suit resulted from an investigation conducted by EBSA’s Los Angeles regional office. 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. Advanced Hi-Tech Corporation 401(k) Profit Sharing Plan)
Civil Action No. CV 06-4020 RGK, United States District Court for the Central District of California.

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Archived News Release — Caution: Information may be out of date.

Contact Name: Deanne Amaden
Phone Number: 415.975.4741