U.S. Labor Department sues Waitsfield, Vermont, executive to recover delinquent employee contributions for SIMPLE IRA

Archived News Release — Caution: Information may be out of date.

Boston - The U.S. Department of Labor has sued the former head of defunct Third Sector Systems Inc. of Waitsfield, Vermont, for failure to forward several thousand dollars in employee contributions to the Antaeus Inc. savings incentive match plan for employees individual retirement account (SIMPLE IRA) plan. The company also operated under the Antaeus Inc. name.

The lawsuit alleges that president and chief executive officer Yves Gonnet violated the Employee Retirement Income Security Act (ERISA) by failing to remit or timely forward employee contributions to the plan. He also allegedly failed to segregate these plan assets from those of the company. The alleged violations took place between July 2000 and September 2004.

The suit, filed in U.S. District Court for the District of Vermont, asks the court to order Gonnet to restore all losses with interest that resulted from his improper actions, correct any transactions prohibited by law, and bar Gonnet from serving as a fiduciary to any employee benefit plan covered by ERISA in the future.

Third Sector Systems closed its doors in 2004. The SIMPLE IRA plan covers four former employees.

“The law clearly states that plan assets are to be used for the benefit of plan participants and beneficiaries,” said James Benages, director of the department’s Employee Benefits Security Administration (EBSA) Boston Regional Office. “Employee contributions deducted from employee paychecks must be forwarded to the plan without delay. Even small plans with only a few participants are protected by the law.”

Employers in danger of committing similar violations who are not yet the subject of an investigation by EBSA may be eligible to participate in the department’s Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP requires employers to make workers whole but allows them to avoid EBSA enforcement actions, civil penalties and any applicable excise taxes. For more information see www.dol.gov/ebsa.

The investigation of this case was conducted by EBSA’s Boston Regional Office. Employers and workers can contact the Boston office at 617.565.9600 or toll-free at 1.866.444.EBSA (3272) for help with any problems relating to private sector pension and health plans.

Chao v. Yves Gonnet
Civil Action Number: 2:07-CV-00068-WKS

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