U.S. Labor Department sues to protect 401(k) funds of Oxnard, California, aquarium supply company

Archived News Release — Caution: Information may be out of date.

Los Angeles - The U.S. Department of Labor has filed suit in federal district court in Los Angeles to appoint an independent fiduciary to distribute more than $33,000 in 401(k) plan assets to10 former employees of Aquatronics, a defunct Oxnard, California, company.

The lawsuit alleges that the president of Aquatronics, Pedro “Peter” Escobal, and trustee Gayle Escobal abandoned their duties as fiduciaries under the Employee Retirement Income Security Act (ERISA). The defendants abandoned the 401(k) plan when the company ceased doing business in December 2002. As a result, former employees are unable to access their plan accounts. The suit also seeks to remove the Escobals as plan fiduciaries, permanently bar them from service to plans governed by ERISA and require them to cooperate with the independent fiduciary.

Universal Aquarium Systems Inc., which operated under the name Aquatronics Inc. to sell aquarium supplies through the Internet and to retail stores nationally, sponsored the 401(k) plan. Pedro and Gayle Escobal currently reside in Las Vegas, Nevada.

“The law requires plans to be managed and operated by plan fiduciaries,” said Billy Beaver, regional director of the Labor Department’s Employee Benefits Security Administration (EBSA) office in Los Angeles. “We hope that, through this action, these workers and their families will have access to their retirement savings.”

To assist workers in similar situations, the Labor Department instituted new rules last May to facilitate a voluntary, safe and efficient process for winding up the affairs of abandoned plans. The new rules allow financial institutions to take responsibility and distribute the assets of 401(k) plans to affected workers and their families. The department estimates that 1,650 such plans are abandoned each year.

Employers and workers with questions or concerns regarding their private sector pension and health plans can contact EBSA’s Los Angeles Regional Office at 626.229.1000 or toll-free at 1.866.444.EBSA (3272). Information is also available on the agency’s Web site at www.dol.gov/ebsa. 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.

Chao v. Universal Aquarium Systems 401(k) Plan
Civil Action Number: CV07-2706 DSF (RCx)

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