U.S. Labor Department recovers funds for company 401(k) plan from Fairfield, Connecticut, employer

New Haven, Connecticut – The U.S. Department of Labor has obtained a consent judgment ordering the owner and operator of Fairfield Podiatry Associates LLC of Fairfield, Connecticut, to restore more than $32,000 to the company’s 401(k) plan. The defendant must also pay a civil penalty of almost $6,500 to the Labor Department.

The Labor Department filed a lawsuit last September in the U.S. District Court for the District of Connecticut, alleging that Anthony R. Iorio failed to discharge his fiduciary duties with respect to the plan between September 1, 2004, and February 21, 2007. The suit alleged that Iorio hired Jeffrey S. Lafferty and his company, Lafferty & Partners LLC, to provide investment and financial management services to the plan. During that time, Lafferty converted thousands of dollars of the plan’s funds for his own benefit.

As trustee of the plan, Iorio allegedly failed to carry out his fiduciary responsibilities under the Employee Retirement Income Security Act (ERISA). He allegedly failed to adequately monitor and control Lafferty’s activities, oversee and control the plan’s assets, and secure a bond to protect the plan’s assets.

The consent judgment orders Iorio to restore to the plan $32,263.51 and to pay the $6,452.70 civil penalty. He must ensure that the repayment amount, which represents both principal and interest, is properly allocated to participants’ accounts and provide to the department proof of the payment.

“Employers who sponsor employee benefit plans are responsible for keeping close watch over how the funds in those plans are administered,” said Jean Ackerman, regional director of the Labor Department’s Employee Benefits Security Administration (EBSA) in Boston. “We took legal action in this case to ensure the restoration and future protection of the funds in this 401(k) plan so that the employee participants can be sure of receiving their benefits when they need them.”

This case was investigated by EBSA’s Boston Regional Office, which can by reached at 617.565.9600. Employers and workers may also call toll-free at 866.444.3272 for help with problems relating to private sector pension and health plans. In fiscal year 2008, EBSA achieved monetary results of $1.2 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.

Solis v. Anthony R. Iorio
Civil Action Number: 3:08-CV-1440 AWT

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