Labor Department Sues Owners of San Luis Obispo Firms 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Archived News Release — Caution: Information may be out of date.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 John S. and Louise S. Villa, the owners of Villa Automotive and Villa Service Center of San Luis Obispo, California, for failing to forward employee contributions to the Villa Automotive 401(k) employee pension benefit plan. The defendants are the trustees of the 401(k) plan.

The suit, filed in U.S. District Court in Fresno, seeks at least $66,800 in employee contributions, plus lost opportunity income, for 51 current and former employees who are plan participants. The defendants allegedly commingled the withheld amounts with the companies’ general assets between June 2000 and March 2004.

The department’s 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.

The companies provide auto body repair and towing service at two locations in San Luis Obispo.

“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 trustees and employers who misuse pension contributions.”

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. San Geronimo Inc., Raphael Villa Vincencio Inc., John S. Villa, Louise S. Villa, and Villa Automotive 401(k) Plan)
Civil Action No. CVCV06-5462AHM(PJx), 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: Roger Gayman
Phone Number: 415.975.4742