U.S. Labor Department settles with plan officials over mismanagement of Jefferson, Georgia, company employee benefits plan

Archived News Release — Caution: Information may be out of date.

Atlanta - The U.S. Department of Labor has obtained a consent judgment with plan officials of the Rehab Consultants Inc. (RCI) employee stock ownership plan regarding the making of improper loan payments to parent company Rehab Consultants of Florida (RCF) and then abandoning the plan. RCI was located in Jefferson, Georgia.

“The Labor Department is committed to protecting employees’ benefit plans and their assets,” said Howard Marsh, director of the department’s Employee Benefits Security Administration (EBSA) Atlanta regional office. “We want to ensure that workers and their families have someone with authority to conclude plan business and distribute assets to eligible participants.”

The department’s lawsuit alleged that named plan committee members violated the Employee Retirement Income Security Act (ERISA) by allowing the plan to engage in a prohibited transaction. Loan payments of more than $170,000 were paid from the plan to RCF, after which RCI was dissolved and these members resigned without providing for continued management of the plan.

Under the judgment, entered in U.S. District Court for the Northern District of Georgia, Atlanta Division, plan committee members Grayson Gentzel, Joseph Gentzel, MaryAnn Gentzel and Graeme Gentzel are barred from serving in a fiduciary capacity to any employee benefit plans governed by ERISA and must reimburse the plan for the fees and expenses of an independent fiduciary. The judgment also appoints Larry Lefoldt as the independent fiduciary to manage, terminate and distribute plan assets to eligible participants.

The case was investigated by EBSA’s Atlanta regional office. 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.

Employers and workers can contact EBSA’s Atlanta office at 404.562.2156 or toll-free at 1.866.444.EBSA (3272) for help with problems relating to private sector pension and health plans.

Chao v. Gentzel
Civil Action No. 1:06-CV-0448

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Archived News Release — Caution: Information may be out of date.