U.S. Labor Department Sues to Recover Losses to Roswell, Georgia, Company’s 401(k) Plan

Archived News Release — Caution: Information may be out of date.

Atlanta, Georgia - The U.S. Department of Labor has filed suit to restore losses to the 401(k) plan of Commetrex Corp., Roswell, Georgia.

“Trustees of a 401(k) plan have a responsibility to ensure that the assets of the plan are used solely to benefit participants,” said Howard Marsh, director of the Atlanta regional office of the department’s Employee Benefits Security Administration (EBSA).

The department’s suit alleges that Commetrex and its 401(k) plan fiduciary, Michael Coffee, violated the Employee Retirement Income Security Act (ERISA) between January 2000 and March 2006. The suit charges that the defendants failed to segregate employee plan contributions from company assets and to forward contributions to the plan in a timely manner, causing as much as $41,000 in losses.

Filed in U.S. District Court in Atlanta, the suit seeks an order requiring the defendants to restore all contributions to the plan, along with interest and lost earnings. The suit also asks the court to permanently bar Coffee from serving as a fiduciary for any plan covered by ERISA.

Commetrex develops telecommunications software and provides engineering and consultation services. The company-sponsored 401(k) plan had 14 participants and assets totaling $140,516 as of December 2003.

Employers with similar problems who are not yet the subject of an investigation by EBSA may be eligible to participate in the department’s Voluntary Fiduciary Correction Program (VFCP). Participation in the program requires employers to correct all violations but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes. For more information about the VFCP, see www.dol.gov/ebsa.

The lawsuit followed an investigation by EBSA’s Atlanta regional office. Employers and workers can contact the regional office at 404.562.2156 or EBSA’s toll-free number 1.866.444.EBSA (3272) for help with problems relating to private-sector pension and health plans. 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.

(Chao v. Commetrex Corp., et al)
Civil Action No. 1:06-CV-01548-BBM

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Archived News Release — Caution: Information may be out of date.

Contact Name: Dan Fuqua
Phone Number: 404.562.2078