U.S. Labor Department sues officers of Dublin, Ohio, business to restore funds to 401(k) plan

Archived News Release — Caution: Information may be out of date.

Dublin, Ohio – The U.S. Department of Labor has sued executives of American Systems Consulting Inc. in Dublin for improperly using 401(k) assets for the benefit of the company in violation of the federal Employee Retirement Income Security Act (ERISA).

Named in the complaint are company president Clifford A. Gallatin, fiduciary of the company’s retirement plans, and Loree Gallatin, director of business operations for the company, who allegedly retained contributions and loan repayments deducted from employees’ pay instead of forwarding them to the company’s 401(k) plan. The lawsuit, filed in federal district court in Columbus, Ohio, also alleges that the defendants failed to maintain an adequate fidelity bond for the plan.

“The department will not hesitate to 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 (EBSA) Cincinnati Regional Office.

The suit seeks a court order that would require restoration of any losses to the plan resulting from fiduciary breaches, permanently bar the defendants from serving as fiduciaries to any ERISA-covered plans and correct any prohibited transactions.

The suit, filed in federal district court in Columbus, resulted from an investigation conducted by EBSA’s Cincinnati Regional Office. Employers and workers can reach the agency’s Cincinnati 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 2007, EBSA achieved monetary results of $1.5 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

Chao v. American Systems Consulting Inc.
Civil Action Number 2:08-cv-00019-GCS-MRA

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Archived News Release — Caution: Information may be out of date.