U.S. Labor Department wins summary judgment against Framingham, Massachusetts, employer, requiring him to restore funds to company 401(k) plan

Archived News Release — Caution: Information may be out of date.

Boston – The U.S. Department of Labor has been granted summary judgment in federal district court against the president of now-defunct One Source Computer Corp., Framingham, Massachusetts, in a lawsuit seeking restoration of funds to the company’s 401(k) plan.

The judgment resolves the suit, which was filed last year in the U.S. District Court for the District of Massachusetts against Minh Q. Nguyen, sole trustee of the plan, and One Source Computer Corp., the plan’s sponsor. The plan was established to provide retirement and death benefits for employees of the company.

The Labor Department’s suit alleged that Nguyen instructed the custodian of the plan’s assets to liquidate and transfer them to his personal bank account. Of the $38,234.85 transferred, $28,647.18 represented benefits for eight other plan participants. Nguyen depleted the assets in his personal bank account without making any distributions to the eight additional plan participants.

“It is totally unacceptable for employee benefit plan officials to use plan assets for their personal benefit,” said James Benages, regional director in Boston for the department’s Employee Benefits Security Administration (EBSA). “Doing so is a clear violation of federal retirement law, and this legal action demonstrates that the Labor Department will not hesitate to pursue litigation to ensure that plan participants receive the benefits to which they are entitled.”

In granting the department’s motion for summary judgment, the court agreed with the department’s contention that Nguyen’s actions were clear violations of the Employee Retirement Income Security Act (ERISA). The court order permanently enjoins Nguyen from serving as a fiduciary or service provider to any ERISA-covered plan in the future and requires him to restore to the plan all losses with interest that incurred as a result of his fiduciary breaches and prohibited transactions.

The department’s legal action resulted from an investigation 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. 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. Additional information can be found at www.dol.gov/ebsa.

Chao v. Minh Q. Nguyen
Civil Action Number: 1:06-CA-10427-RGS

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