U.S. Labor Department recovers 401(k) contributions for former South Bay tech company employees

Archived News Release — Caution: Information may be out of date.

San Francisco – The U.S. Department of Labor has reached an agreement with the president of UltraCard Inc., a revoked Nevada corporation operating out of Los Gatos, California, to restore employee contributions and lost interest to the company-sponsored 401(k) plan.

The agreement, entered in federal district court in San Jose, California, calls for Daniel Kehoe to restore $33,829 in employee contributions and losses, and to distribute these funds to the plan’s participants. The agreement resolves a Labor Department lawsuit filed December 21, 2006, against Kehoe and UltraCard for failing to remit employee contributions to the plan in violation of the Employee Retirement Income Security Act (ERISA).

Kehoe, who currently resides in Bend, Oregon, also agreed to pay a $6,658 penalty. Kehoe is barred from future service as a fiduciary or service provider to an ERISA-covered employee benefit plan.

“This action demonstrates our continuing commitment to protect the hard-earned benefits of American workers,” said Billy Beaver, regional director for the Labor Department’s Employee Benefits Security Administration (EBSA) in San Francisco. “Through this action, these workers and their families will have access to their retirement savings.”

The Department of Labor suit alleged that the company deducted amounts from employee paychecks between April 15 and July 15, 2002, but never forwarded the workers’ contributions to the plan. The defendants allegedly also failed to terminate the plan and distribute its assets to eligible participants. Kehoe has agreed to distribute the funds, ranging from $1,100 to $4,350, to 15 plan participants.

Employers with similar problems who are not yet the subjects of investigations by EBSA may be eligible to participate in the department’s Voluntary Fiduciary Correction Program (VFCP). Participation requires employers to correct any violations but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes.

Employers and workers with questions or concerns regarding their private sector pension and health plans can contact EBSA’s San Francisco Regional Office at 415.625.2481 or toll-free at 866.444.3272. Information is also available on the agency’s Web site at www.dol.gov/ebsa.

Chao v. UltraCard Inc. et al
Civil Action Number C-06-7822 RMW

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