U.S. Labor Department obtains civil contempt order against trustees of California-based health benefit fund

Archived News Release — Caution: Information may be out of date.

Atlanta — A federal district court in Atlanta has held two former trustees of the California-based International Union of Industrial and Independent Workers Benefit Fund (IUIIW) in civil contempt for failing to comply with a previous court order barring them from serving in a fiduciary capacity to plans governed by the Employee Retirement Income Security Act (ERISA).

Under the contempt order, Geoffrey Beltz and James Miller are barred from serving in a fiduciary capacity to any plans governed by ERISA; communicating with participants of the IUIIW fund; and marketing, selling and recruiting employers or employees for plans offering benefits under ERISA. Furthermore, to the extent that Beltz or Miller work for any employer, association or labor organization which sponsors an ERISA-covered employee benefit plan in the future, the contempt order requires them to notify the directors and officers of such organizations of the terms and requirements of the contempt order.

“We are pleased that the court ordered these plan managers to comply with the earlier court order and found them to be in contempt,” said Bradford P. Campbell, assistant secretary of the Employee Benefits Security Administration (EBSA). “Our legal action will ensure that these defendants cannot misuse workers’ benefit programs in the future.”

Under the 2004 court order, the fund’s trustees were required to pay $840,000 in restitution to the fund and to pay civil penalties to the federal government. The trustees were also barred from serving as plan fiduciaries.

The Labor Department alleged in the 2004 lawsuit that improper actions by Beltz, Miller and other trustees to a health fund sponsored by the International Union of Industrial and Independent Workers resulted in several million dollars in unpaid health claims. The fund, which purported to be a union-sponsored benefit plan, was marketed to employers and individuals in Texas, Georgia, Oklahoma, California and many other states. Several states, including Oklahoma and Georgia, ordered the fund’s operators to stop all insurance-related activities.

Beltz and Miller admitted they later violated the 2004 contempt order by directly or indirectly controlling an ERISA-covered health plan offered by the International Union of Industrial and Independent Workers Local 30, another purported labor organization. The contempt order was entered in federal district court in Atlanta.

The Atlanta regional office of EBSA investigated the case. Employers and workers can reach the Atlanta Regional Office at 404.562.2156, or toll-free at 866.444.3272, for help with problems relating to private-sector retirement and health plans.

International Union of Industrial and Independent Workers
Civil Action No. 1:04-CV-0934-BBM

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