U.S. Labor Department obtains settlement to distribute 401(k) funds to former employees of Kropf Orchards and Appletree Farms

Archived News Release — Caution: Information may be out of date.

Lowell, Michigan – The U.S. Department of Labor has obtained a settlement requiring the appointment of an independent fiduciary to distribute the 401(k) assets of a Lowell, Michigan, company to participants and beneficiaries, and permanently enjoining Roger Kropf, a former officer of Kropf Orchards, from serving as a fiduciary or service provider to any plan governed by the Employee Retirement Income Security Act (ERISA).

“The department will not hesitate to act when plan fiduciaries fail to fulfill their duty to protect the retirement plan assets of participants and their beneficiaries,” said Bradford P. Campbell, assistant secretary of the Labor Department’s Employee Benefits Security Administration (EBSA). “Our legal action reaffirms our commitment to protect the hard-earned benefits promised to America’s workers.”

The settlement resolves a lawsuit filed by the Labor Department alleging that Roger Kropf used shares of stock from the 401(k) plan to obtain a loan for Kropf Orchards and Storage in 1999. Kropf later restored the shares of stock to the plan at a reduced value due to depreciation in the stock market. This action resulted in a loss of 401(k) assets. In a separate criminal prosecution, Kropf pled guilty to filing a false pension statement and was ordered to make restitution in the amount of $275,218.

Appletree Farms, which ceased operations, is the plan’s sponsor and the successor company to Kropf Orchards. The plan covered 62 participants and had $137,167 at the end of 2006.

The suit resulted from an investigation conducted by EBSA’s Cincinnati Regional Office. Employers and workers can reach the Cincinnati office at 859.578.4680 or through EBSA’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 the pension, 401(k), health and other benefits for millions of American workers and their families.

Chao v. Kropf
Civil Action Number 1:05cv845

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Archived News Release — Caution: Information may be out of date.