U.S. Department of Labor sues to recover 401(k) assets for former employees of Stockton, California dental manufacturer

Archived News Release — Caution: Information may be out of date.

San Francisco – The U.S. Department of Labor has sued a Stockton, California, dental manufacturer and its principals to recover nearly $28,000 in employee contributions and participant loan repayments owed to the company’s 401(k) profit sharing plan.

The suit alleges that the Gene Shaw Group, doing business as A-Q Dental Laboratory, and owner Young Jin Lee and his wife Juliette Myung Lee, a principal in the company, failed to forward employee contributions and loan repayments to the A-Q Dental Laboratory 401(k) Profit Sharing Plan between June 2005 and February 2007. The defendants allegedly co-mingled the employees’ contributions with the company’s other accounts in violation of the Employee Retirement Income Security Act (ERISA).

“The Labor Department is committed to protecting the benefits of America’s workers and retirees,” said Billy Beaver, regional director of the Labor Department’s Employee Benefits Security Administration (EBSA) in San Francisco, which investigated the case. “This is money that was deducted from employees’ paychecks and belongs to the workers. The department will not hesitate to act to hold accountable those who misuse workers’ retirement assets.”

The suit, filed in the U.S. District Court for the Eastern District of California in Sacramento, seeks to require the defendants to restore all losses to the plan plus lost opportunity costs. The suit also asks the court to permanently bar them from serving in a fiduciary capacity to any ERISA-covered plan, to remove them as plan fiduciaries and to appoint an independent fiduciary to manage the plan. A-Q Dental filed for Chapter 11 bankruptcy on June 3; the Lees jointly filed for Chapter 11 personal bankruptcy on June 5.

In fiscal year 2007, EBSA achieved monetary results of $1.5 billion related to the pension, 401(k), health and other benefits for millions of American workers and their families. Employers and workers can reach the agency’s San Francisco office at 415.625.2481 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans.

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. Participation in the program requires employers to correct any violations but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes. For more information, visit www.dol.gov/ebsa.

Chao v. Gene Shawn Group
Civil Action Number 2:08-CV-02743-MCE-EFB

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