U.S. Labor Department sues president of MED-XS Solutions Inc. to recover delinquent contributions to company 401(k) plan

Archived News Release — Caution: Information may be out of date.

Mentor, Ohio – The U.S. Department of Labor has sued MED-XS Solutions Inc. and Kevin Tenkku, the company’s president and 401(k) plan fiduciary, for failing to remit employee contributions to the company-sponsored 401(k) plan and co-mingling those funds with those of the company funds.

“The Labor 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 Employee Benefits Security Administration’s (EBSA) Cincinnati Regional Office.

The lawsuit alleges that Tenkku violated the Employee Retirement Income Security Act (ERISA) by failing to remit and segregate employee contributions owed to the plan even though assets were deducted from workers’ paychecks.

The suit seeks to require Tenkku to restore all contributions plus interest to the 401(k) accounts, terminate the plan, distribute assets to eligible participants and beneficiaries, and permanently enjoin Tenkku from serving as a fiduciary or service provider to any ERISA-covered employee benefit plan.

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

Employers and workers can reach EBSA’s Cincinnati Regional Office at 859.578.4680 or through the agency’s toll-free number, 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. Tenkku
Civil Action Number 1-07-cv-02239-DCN

U.S. Department of Labor news releases are accessible on the Department's Newsroom page. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the COAST office. Please specify which news release when placing your request at 202.693.7828 or TTY 202.693.7755. The U.S. Department of Labor is committed to providing America's employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit the Department's Compliance Assistance page.

Archived News Release — Caution: Information may be out of date.