U.S. Labor Department obtains civil contempt order against Gary Hochberg for failing to comply with order to restore pension plan funds

Archived News Release — Caution: Information may be out of date.

Atlanta – The U.S. Department of Labor has obtained a second order of civil contempt against Gary Hochberg after a federal district court in Miami found that he failed to pay $75,000 to the Gary M. Hochberg CLU Insurance Agency Inc. Assumed Benefit Plan. The court ordered the defendant to be incarcerated until he complies with the order to pay $75,000. The next hearing is April 29.

“No employer has the right to deprive his employees of their pension benefits and we will continue to pursue this issue until employees are paid the benefits that they are promised,” said Rebecca Marshall, director of the Atlanta Regional Office of the department’s Employee Benefits Security Administration (EBSA).

In the contempt order issued on April 23, Hochberg is listed as owing $61,845 to the benefit plan, $110,200 in daily fines, and $59,437 to the plan’s independent fiduciary. Hochberg has disputed some of these expenses.

The original court order, entered in federal district court in Ft. Lauderdale, Florida, required the agency and Gary M. Hochberg to restore $107,938 to the plan. Hochberg also was permanently barred from serving as a fiduciary to any employee benefit plan governed by the Employee Retirement Income Security Act (ERISA), and an independent trustee was appointed to manage the plan.

Hochberg was the pension plan’s trustee as well as the sole owner, director and officer of the insurance agency. The department sued Hochberg October 8, 2003, for allegedly transferring $55,120 in plan assets in 1994 and 1996 to himself and Designer Wear Inc., a company in which he had an interest. These transfers were prohibited by ERISA.

The case resulted from an investigation conducted by EBSA’s Atlanta Regional Office. Employers and workers can reach EBSA’s Atlanta Regional Office at 404.302.3900 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. For more information, see www.dol.gov/ebsa.

(Chao v. Gary M. Hochberg C.L.U. Insurance Agency Inc.)
(Civil Action File Number 0:03-cv-61859-MGC)

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Archived News Release — Caution: Information may be out of date.