White Plains, New York employer and company president ordered to restore $1.5 million to retirement plan to resolve U.S. Labor Department lawsuit

Archived News Release — Caution: Information may be out of date.

New York – The marketing and communications company Guild Concepts Ltd., White Plains, New York, and its president have been ordered to repay $1.5 million to the company’s pension plan under a consent judgment resolving a U.S. Department of Labor lawsuit alleging violations of the Employee Retirement Income Security Act (ERISA).

“The department’s legal actions will restore the pension plan’s assets that these workers and their families have been counting on for their retirement,” said U.S. Secretary of Labor Elaine L. Chao.

Guild Concepts Ltd. and its president, Victor Ayala, were named as defendants in the suit, which was filed simultaneously with the judgment. The Guild Concepts Ltd. Employee Savings Plan provided retirement benefits for 77 participants as of December 2007. Defendant Ayala served as a trustee to the plan and was responsible for the proper management of its assets.

The suit states that Ayala and Philip Liu were co-trustees of the plan between January 1998 and May 2004. At the time of the improper acts, Liu was also controller of Guild Concepts Ltd. Liu is alleged to have failed to remit more than $200,000 in employee contributions to the plan and to have transferred more than $996,000 in plan assets to the company’s account. The suit also alleges that Ayala failed to monitor and prevent Liu’s misuse of plan assets, while the company knowingly received plan assets. Liu has pled guilty to embezzlement and is currently serving a sentence of 57 months in prison.

This judgment was entered in the U.S. District Court for the Southern District of New York. An independent fiduciary agreed to by the parties must report to the court. In addition, Ayala is ordered to forfeit his own plan account as restitution and is barred permanently from serving as a fiduciary to any plan governed by ERISA

The suit resulted from an investigation by the Labor Department’s Employee Benefits Security Administration’s (EBSA) New York Regional Office. Employers and workers can reach EBSA at 212.607.8600 or toll-free at 866.444.3272 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 Guild Concepts Ltd.
Civil Action Number: 08-CV-01716

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Archived News Release — Caution: Information may be out of date.