U.S. Labor Department settlement resolves lawsuit over payment for administrative services by New Jersey union health plan

Archived News Release — Caution: Information may be out of date.

Newark, New Jersey – The U.S. Department of Labor has obtained consent orders that permanently bar three trustees to the H.E.R.E. Local 4-69 Health Fund in Secaucus, New Jersey, from serving in a fiduciary capacity to employee benefit plans governed by the Employee Retirement Income Security Act (ERISA).

The trustees are Theresa Alfano, Stuart Elfenbein and David Feeback. The court orders also provide for payment of $15,000 to the fund by Elfenbein.

As a result of an earlier criminal case, trustee Feeback was barred from service to plans and ordered to restore $24,002.30 in restitution to the fund. Feeback, the former president of the union local, pleaded guilty to embezzling more than $120,000 in assets from the union and the health fund.

“The Labor Department is committed to protecting the employee benefits of America’s workers, and we won’t hesitate to act when plan officials fail to properly manage their workers’ benefits responsibly,” said Jonathan Kay, director of the New York Regional Office of the department’s Employee Benefits Security Administration (EBSA).

The lawsuit resolved by these consent orders alleged that the defendants violated ERISA by paying excessive fees and commissions to the operator of a network of medical providers for administrative services to the fund over a four-year period. The suit also alleged that the trustees permitted the fund to reimburse Feeback for unreasonable expenses.

The health fund provided medical, prescription drug and dental benefits to as many as 3,059 union members throughout New Jersey and had assets of $1,803,743 according to the latest data available. The local 4-69 fund was absorbed by the UNITE HERE National Health Fund.

The consent judgments, entered in federal district court in Newark, resulted from an investigation conducted by EBSA’s New York Regional Office. Employers and workers can reach that office at 212.607.8600 or toll-free at 1.866.444.EBSA (3272) for help with problems relating to private sector retirement and health plans.

Chao v. Feeback
Civil Action Number 04-4696 (GEB) (JJH)

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Archived News Release — Caution: Information may be out of date.