U.S. Labor Department seeks to restore employee contributions owed to Minnesota SIMPLE IRA plan and appoint independent plan fiduciary

Archived News Release — Caution: Information may be out of date.

Minneapolis – The U.S. Department of Labor has sued the owner of Duke’s Body Shop in Crystal, Minnesota, for allegedly retaining employee contributions owed to the company’s savings incentive match plan for employees individual retirement account (SIMPLE IRA) to pay the operating expenses of the company. Duke’s Body Shop is a commercial auto body repair shop.

The lawsuit seeks a court order to restore more than $25,000 in contributions owed to the plan, to remove Sheila Bergen as the plan’s fiduciary and to appoint an independent fiduciary to manage the plan. The department also asks the court to permanently bar Bergen from serving as a fiduciary to any plan governed by the Employee Retirement Income Security Act (ERISA).

“The Labor Department acts quickly to help workers get their benefits when plan assets are either misused or the plans are abandoned,” said Steve Eischen, director of the department’s Employee Benefits Security Administration (EBSA) Kansas City Regional Office, which investigated the case.

The suit alleges that Bergen violated her fiduciary duties under ERISA from March 10, 2003, through May 17, 2005. She allegedly caused Duke’s Body Shop to retain participant contributions intended for the plan and used plan assets to pay the operating expenses of the company. At the time of the violations, Bergen was the company’s office manager with responsibility for Duke’s corporate account. She subsequently became the owner of Duke’s Body Shop.

Employers and workers can reach EBSA’s Kansas City Regional Office at 816.285.1800 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. Bergen
Civil Action Number: 0-08-cv-00169-DSD-SRN

U.S. Department of Labor news releases are accessible on the Department's Newsroom page. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the COAST office. Please specify which news release when placing your request at 202.693.7828 or TTY 202.693.7755. The U.S. Department of Labor is committed to providing America's employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit the Department's Compliance Assistance page.

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