U.S. Labor Department sues fiduciaries of Reno, Nevada, company to recover 401(k) assets

Reno, Nevada – The U.S. Department of Labor has obtained a bankruptcy court order in which the owners of Jeff Codega Planning & Design Inc. of Reno, Nevada, agreed to restore $35,864 owed to the company’s 401(k) profit-sharing plan.

Jeffrey A. Codega and Barbara T. Codega agreed that the $35,864 debt owed to the 401(k) plan is non-dischargeable in an order entered in the U.S. Bankruptcy Court for the District of Nevada on December 16, 2009. The Codegas’ company performed real estate planning and landscaping services. They filed for Chapter 7 bankruptcy on July 16, 2009.

“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. “We will not hesitate to act to hold accountable those who misuse workers’ retirement assets.”

Under the order, the Codegas stipulated that they are plan fiduciaries and they violated the Employee Retirement Income Security Act (ERISA) by failing to remit and timely remit employee contributions and participant loan repayments to the 401(k) plan. EBSA’s San Francisco Regional Office found that the Codegas caused the company to retain and co-mingle employee contributions and loan repayments from October 24, 2008, through April 10, 2009, in with the company’s general accounts.

As of December 17, 2009, the plan had 33 participants and approximately $465,912 in assets.

Employers and workers can reach EBSA’s San Francisco Regional Office at 415.625.2481 or through its toll-free number, 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 the pension, 401(k), health and other benefits for millions of American workers and their families.

Employers with similar problems who are not yet the subject of investigations by EBSA may be eligible to participate in the department’s Voluntary Fiduciary Correction Program (VFCP). 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. Additional information can be found at http://www.dol.gov/ebsa.

U.S. Bankruptcy Court v. Jeffrey A. Codega and Barbara T. Codega
Case Number BK-N-09-52325-GWZ

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