Federal court holds Gulfport, Mississippi, defendant liable for more than $300,000 in pension assets following investigation by U.S. Department of Labor

Gulfport, Mississippi – A federal district court in Gulfport, Mississippi, has ordered Jomey B. Ethridge liable for $303,084.61 in assets belonging to the 401(k) plan of bankrupt Struthers Industries and permanently barred him from serving as fiduciary of any plan governed by the Employee Retirement Income Security Act (ERISA).

The legal action followed a lawsuit filed by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) in U.S. District Court for the Southern District of Mississippi, alleging that the defendant violated his fiduciary responsibilities under ERISA.

“The Labor Department is committed to protection of workers hard-earned retirement,” said Phyllis C. Borzi, assistant secretary for the Labor Department’s Employee Benefits Security Administration. “We are pleased the court has acted to hold this defendant accountable for misuse of workers’ retirement assets.”

The lawsuit alleged that Ethridge and Struthers Industries allowed employee contributions to be used for purposes other than providing benefits resulting in losses of $310,084.57. The $303,084.61 is the required restitution owed to the plan after deducting $6,999.96, representing Ethridge’s own unpaid contributions to the plan.

Struthers Industries designed and built heat transfer and pressure vessels at its Gulfport facility. In 2001, the company’s 401(k) plan had 278 participants and assets totaling $8,279,083. The company filed for bankruptcy in 2003, and its assets were auctioned off in 2005. An independent fiduciary was appointed by the court in 2007 to manage the plan’s assets.

Employers with similar problems who are not yet subjects of EBSA investigations may be eligible to participate in the department’s Voluntary Fiduciary Correction Program. Participation requires employers to make workers whole but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes.

In fiscal year 2009, EBSA achieved monetary results of $1.3 billion related to pension, 401(k), health and other benefits for millions of American workers and their families. Employers and workers can reach EBSA’s Atlanta Regional Office at 404.302.3900 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans. For more information, see www.dol.gov/ebsa.

Solis v. Struthers Industries Inc.
(Civil Action File Number 1:06cv50-LG-RHW)

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