U.S. Labor Department Action To Restore More Than $1 Million in Retirement Funds for Congers, New York Companies’ Employees

Archived News Release — Caution: Information may be out of date.

New York - The owner of now defunct Warde Electric Contracting Inc. and L.A.B. Electric Sales Corp., both formerly based in Congers, New York, has been ordered to repay more than $1 million to four company retirement benefit plans to resolve a lawsuit filed by the U.S. Department of Labor alleging violations of the Employee Retirement Income Security Act (ERISA). In addition, Eric Appelbaum agreed to pay to the Federal government a civil penalty of $203,176.40. He and his wife, Claudia, also were barred from serving as fiduciaries or service providers to any ERISA-covered plan in the future.

“Protecting workers retirement funds is one of the highest priorities of this administration,” said Secretary of Labor Elaine L. Chao. “I am pleased that the department succeeded in recovering more than $1 million for workers whose retirement savings were put at risk. The court also sided with the department in barring the guilty parties from serving in the future as fiduciaries or service providers to ERISA-covered plans.”

Under a consent judgment entered in U.S. District Court for the Southern District of New York, Eric Appelbaum must pay $1,015,882 to the pension and profit sharing plans sponsored by each of his companies. Assets restored under the judgment will be distributed to eligible participants, most of whom were employees of the now defunct companies.

Between January 1, 1995 to January 29, 2002, the suit alleged defendants Appelbaum and his wife, Claudia, allowed assets of the companies’ pension and profit sharing plans to be loaned to various related parties, including Appelbaum and other companies in which he had an ownership interest. The defendants allegedly made the loans without properly documenting the loans or ensuring that the loans were ever repaid.

The legal action resulted from an investigation conducted by the New York regional office of the Labor Department’s Employee Benefits Security Administration (EBSA). In fiscal year 2005, EBSA achieved monetary results of $1.7 billion related to the pension, 401(k), health and other benefits for millions of American workers and their families. Employers and workers can contact the New York regional office at 212.607.8600 or EBSA’s toll free number at 1.866.444.EBSA (3272) for help with problems relating to private-sector retirement and health plans.

(Chao v Eric Appelbaum)
Civil Action Number: 06-CV-5601

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

Contact Name: John M. Chavez
Phone Number: 617.565.2075