U.S. Department of Labor sues fiduciaries of Dadeville, Alabama employee leasing company to restore more than $200,000 to pension plan

Archived News Release — Caution: Information may be out of date.

Atlanta – The U.S. Department of Labor has sued Professional Employee Leasing Inc. in Dadeville, Alabama, Louie Sims and Judy Sims to recover more than $200,000 allegedly diverted by the defendants from the company’s money purchase pension plan in violation of the federal Employee Retirement Income Security Act (ERISA).

“Theft from employee benefits plans will not be tolerated,” said Bradford P. Campbell, assistant secretary of the Labor Department’s Employee Benefits Security Administration (EBSA). “Our legal action sends a clear message that plan fiduciaries cannot divert funds and then hide their illegal actions behind false reporting.”

Professional Employee Leasing Inc. provides record-keeping services to employers that include the handling of payrolls and benefit payments. The company offered a defined contribution pension plan to employees of its client employers. Client employers were required to contribute 7.5 percent of each employee’s compensation to the company’s pension plan. Employees were not allowed to make contributions to the plan.

The suit, filed in the U.S. District Court for the Middle District of Alabama, alleges that Louie Sims, the owner of the company, and his wife, Judy Sims, received contributions from employers but failed to hold them for the plan. In addition, the defendants sent the plan’s third party administrator false documents making it appear that individual participant accounts had the correct balances. In March 2007, Judy Sims pleaded guilty in federal district court to one count of making a false statement in a document required by ERISA.

The suit asks the court to order the defendants to restore all losses to the plan, appoint a successor trustee and administrator to distribute plan assets, and bar the defendants from acting in a fiduciary capacity to any employee benefit plan subject to ERISA.

The case was investigated by EBSA’s Atlanta Regional Office, which can be reached 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.

Chao v. Professional Employee Leasing Inc.
Civil Action Number 3:08-cv-00483-WKW-CSC

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Archived News Release — Caution: Information may be out of date.