U.S. Labor Department sues officers of Port Huron, Michigan, business to recover contributions to company 401(k) plan

Archived News Release — Caution: Information may be out of date.

Port Huron, Michigan – The U.S. Department of Labor has sued Leslie H. Smith and Cheryl Wilson, officers of Smith Die & Mold Inc., Port Huron, for failing to remit employee contributions to the company-sponsored 401(k) plan and co-mingling those funds, deducted from employees’ paychecks, with 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 Smith and Wilson, fiduciaries of the plan and president and vice-president of the company, violated the Employee Retirement Income Security Act by failing to remit and segregate employee contributions owed to the plan.

The suit seeks to require that all contributions plus interest be restored to the 401(k) accounts and to remove the defendants as plan fiduciaries. The suit also seeks to appoint an independent fiduciary to manage the plan, terminate it and distribute assets to eligible participants and beneficiaries.

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 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. Smith
Civil Action Number 2:07-cv-13231

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Archived News Release — Caution: Information may be out of date.