U.S. Labor Department Sues to Appoint Independent Fiduciary to Manage Abandoned Mineola, New York, 401(k) Plan

Archived News Release — Caution: Information may be out of date.

New York, New York - The U.S. Department of Labor has sued to obtain court appointment of an independent fiduciary to manage the abandoned 401(k) profit sharing plan of the Mineola, New York-based Hagedorn Actuarial Services Inc. The suit also seeks to distribute more than $48,000 in plan assets to eligible participants and beneficiaries.

The department’s lawsuit alleges that a successor fiduciary was not appointed after plan trustee, William Lambiase, pleaded guilty to embezzlement of $16,000 in plan assets in August 2005. Since that time, the plan’s participants and beneficiaries have been unable to gain access to or obtain information about their individual account balances.

Plans become “orphan plans” when they are abandoned by all fiduciaries designated to manage and operate them and their assets. The plan had two participants and, as of August, 2006, approximately $48,446 in assets being held by custodian American Funds Group.

“The department took legal action to ensure that the participants receive their promised benefits,” said Jonathan Kay, director of the regional office in New York of the department’s Employee Benefits Security Administration (EBSA), which investigated the case.

The department’s suit asks the U.S. District Court for the Eastern District of New York to appoint an independent fiduciary to administer the plan, distribute plan assets to participants and beneficiaries, and oversee the plan’s termination.

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. Hagedorn Actuarial Services, Inc. 401(k) Profit Sharing Plan)
Civil Action Number: CV 06-5733 (EDNY)

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Archived News Release — Caution: Information may be out of date.

Contact Name: John M. Chaviz
Phone Number: 617.565.2075