U.S. Labor Department Sues New Britain, Connecticut Company and its President to Recover Misused Assets of Employee Benefit Plan

Archived News Release — Caution: Information may be out of date.

New Britain, Connecticut - The U.S. Department of Labor has sued New Britain-based Macristy Industries Inc. and company president Jeffrey B. Barlow for alleged misuse of more than $1.8 million in assets of the company's cash balance plan.

The lawsuit, filed in U.S. District Court for the District of Connecticut, alleges the defendants violated the Employee Retirement Income Security Act (ERISA) between the fall of 2002 and the present when they improperly transferred up to $2,597,000 in plan assets to accounts of the company and filed false or no annual reports with the Labor Department. The defendants allegedly used approximately $773,186 for legitimate plan benefits and expenses and diverted the balance — approximately $1,823,813 — to pay for company operations.

"The department will not tolerate workers' retirement savings being abused and used as a piggy bank for the convenience of management," said Secretary of Labor Elaine L. Chao. "This legal action seeks on behalf of the workers full restitution, compliance with federal disclosure requirements and plan integrity going forward."

The department's suit seeks a court order requiring the defendants to restore to the plan all losses with interest, to disgorge all profits received, and to require the company to file appropriate Form 5500 annual reports. The suit also asks the court to bar Barlow from service as a fiduciary to any ERISA-covered plan and to appoint an independent fiduciary to be trustee of the plan.

Macristy Industries Inc. is a holding company that owns Connecticut Stamping and Bending Inc., Tube Bends Inc., The Sunrise Realty Corp. and Plumb E-Z Manufacturing Co. As of January 2003, the Macristy Industries Inc. Cash Balance Retirement Income Plan had approximately 286 participants.

The investigation of this case was conducted by the regional office in Boston of the Employee Benefits Security Administration. Employers and workers can contact the Boston office of EBSA at 617.565.9600 or may call EBSA's toll-free number 1.866.444.EBSA (3272) for help with any problems relating to private-sector pension and health plans.

In fiscal year 2006, EBSA achieved monetary results of $1.4 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

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