U.S. Labor Department obtains judgment restoring nearly $71,000 in assets to Puerto Rican union employee benefit plan

Archived News Release — Caution: Information may be out of date.

San Juan, Puerto Rico – The union Sindicato de los Empleados de Equipo Pesado, Construcción y Ramas Anexas de Puerto Rico Inc. has agreed to pay $70,986.46 in restitution to the Plan de Bienestar de los Empleados de Equipo Pesado Construcción Ramas Anexas de Puerto Rico Inc. under a consent judgment obtained by the U.S. Department of Labor.

The judgment also provides that the union and plan must re-title the car being used for plan-related activities from the union to the plan, and orders the union to pay its share of expenses relating to office equipment jointly used by the union and the plan. The pension plan is based in Río Piedras, Puerto Rico, and covers unionized heavy equipment operators in the Puerto Rico construction industry.

“The law prohibits those entrusted with employee benefit assets from misusing those funds,” 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 must use funds solely for the benefit of plan participants.”

In the lawsuit being resolved by this judgment, the department alleged that the union violated the Employee Retirement Income Security Act by misusing $19,162.82 in plan assets to repair and upkeep an obsolete bulldozer in 2004, which the union accepted in satisfaction of a $32,000 debt owed to the plan. The union also allegedly allowed $18,000 of plan money to be used to pay strike expenses and for services rendered to the union election committee.

In addition, the union allegedly allowed $30,213 in plan assets to be used to purchase a copier machine for union business and for gifts to its members, and used plan assets to purchase and maintain two automobiles held in the union’s name. Finally, the suit alleged that the union failed to diligently monitor and review the actions of individuals it appointed to serve on the plan’s board of trustees.

The judgment, entered in the U.S. District Court for the District of Puerto, resulted from an investigation conducted by the Miami District Office of EBSA. Employers and workers can reach EBSA 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. Additional information can be found at www.dol.gov/ebsa.

Chao v. Plan de Bienestar
Civil Action Number 08-1596 (FAB)

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Archived News Release — Caution: Information may be out of date.