U.S. Labor Department sues trustee of Parma, Ohio, hair salon’s 401(k) plan to recover missing assets

Archived News Release — Caution: Information may be out of date.

Parma, Ohio – The U.S. Department of Labor has sued Ales Kramhoeller, president of Hair by Maxelle’s Inc. in Parma, for failure to forward employees’ contributions to their 401(k) plan accounts as required by the Employee Retirement Income Security Act (ERISA).

Kramhoeller allegedly failed to timely remit employee contributions and loan repayments to 401(k) accounts from January 1, 2004, through October 7, 2006, and has not remitted any employee contributions and loan repayments since the latter date. The Labor Department also alleges that those assets remained co-mingled with the general operating assets of Hair by Maxelle’s and were used to pay the company’s operating expenses. At the time of the improper actions, she was a trustee of the 401(k) plan.

“The department will act when plan fiduciaries fail to carry out their duty to protect the retirement plan assets held on behalf of participants,” said Joseph Menez, director of the department’s Cincinnati Regional Office of the Employee Benefits Security Administration (EBSA).

The suit seeks to require Kramhoeller to restore to the plan all contributions plus interest, remove her as a plan fiduciary and correct any transactions by law. The suit also asks the court to permanently bar her from serving as a fiduciary or service provider to any ERISA-covered employee benefit plan.

The case was investigated by EBSA’s Cincinnati Regional Office. Employers and workers can reach the office at 859.578.4680 or toll-free at 1.866.444.EBSA (3272) for help with problems relating to private sector retirement 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.

Chao v. Kramhoeller
Civil Action Number 1:07-cv-1933

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Archived News Release — Caution: Information may be out of date.