U.S. Labor Department sues former president of Phezer Enterprises to recover former workers’ health care contributions

Crystal Lake, Illinois – The U.S. Department of Labor has filed an adversary complaint against Joseph Phelan, former president and fiduciary of Phezer Enterprises Inc. of Crystal Lake, in order to prevent the discharge of $10,470 from his personal bankruptcy, which is owed to the company’s employee health plan.

The legal action, based on an investigation conducted by the department’s Employee Benefits Security Administration (EBSA), alleges that Phelan violated the Employee Retirement Income Security Act (ERISA) during the period of May through July 2008. He allegedly failed to remit $10,470 in employee health premium contributions to the health plan’s insurance provider.

Phelan also allegedly co-mingled plan funds with Phezer Enterprises’ general assets and used the money to pay the company’s general operating expenses.

“The Labor Department will take whatever steps necessary to protect worker’s benefits,” said Steve Haugen, director of EBSA’s Chicago Regional Office, which investigated the case.

The adversary complaint, filed in the U.S. Bankruptcy Court for the Northern District of Illinois-Western Division, seeks a court order to bar Phelan from discharging a debt relating to unremitted employee health premium contributions owed to the Phezer Enterprises Inc. Health Plan.

Employers and workers can reach EBSA’s regional office at 312.353.0900 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans. 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. Additional information can be found at www.dol.gov/ebsa.

Solis V. Phelan
Adversary Complaint Number: 09-70398