Florida Insurance Agency and Owner Held in Contempt of Court for Failure to Pay Restitution Owed to Pension Plan

Archived News Release — Caution: Information may be out of date.

Atlanta - A federal district court in Miami has granted a request by the U.S. Department of Labor to impose a daily fine of $200 against the Gary M. Hochberg C.L.U. Insurance Agency Inc. of Hollywood, Florida, and its owner for civil contempt of court for failure to restore $107,938 in losses owed to the company’s pension plan. The court-ordered fines will be assessed until Hochberg and the insurance agency fully comply with the court’s previous order.

Besides the restitution, the contempt order requires the insurance agency and owner Gary Hochberg to pay additional post-judgment interest of $2,832 to the plan and $7,937 in fees owed to Neil A. Useden, an independent fiduciary appointed to manage the plan.

“Retirement benefits are crucial to America’s workers,” said Bradford P. Campbell, acting assistant secretary of labor for the Employee Benefits Security Administration (EBSA). “The department took this action to ensure that these defendants restore the pension funds to the worker’s plan.”

Under a Novembwer 16, 2005 judgment entered in federal district court in south Florida, the insurance agency and Hochberg were ordered to make restitution and were permanently barred from service as a fiduciary to any employee benefit plan governed by the Employee Retirement Income Security Act (ERISA).

Hochberg was the pension plan’s trustee as well as the sole owner, director and officer of the insurance agency. The U.S. Department of Labor sued Hochberg for allegedly transferring $55,120 in plan assets in 1994 and 1996 to himself and Designer Wear Inc., a company in which he had an interest. These transfers were prohibited by ERISA. The department also alleged that Hochberg failed to properly administer the plan.

Employers and workers can reach the EBSA regional office in Atlanta at 404.562.2156 or toll-free at 1.866.444.EBSA (3272) for help with problems relating to private-sector retirement 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. Gary Hochberg C.L.U. Insurance Agency, Inc.)
Civil Action No.: 03-61859-CIV

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Archived News Release — Caution: Information may be out of date.

Contact Name: Gloria Della/Peter Hong
Phone Number: 202.693.8664/202.693.4676