U.S. Department of Labor sues former Tampa, Fla., pharmacy and officials to restore losses to 401(k) plan

Tampa, Fla. – The U.S. Department of Labor has sued Medipharm-RX Inc., a former Tampa pharmacy, and two plan administrators to restore losses to the pharmacy's 401(k) plan.

Filed in the U.S. District Court for the Middle District of Florida, Tampa Division, the lawsuit alleges that Medipharm-RX, Brian Green and Grady D. Morrell violated the Employee Retirement Income Security Act (ERISA) by failing to forward to the plan contributions deducted from employees' paychecks. Instead, the contributions were co-mingled with the general assets of the company.

According to the suit, which was filed following an investigation by the department's Employee Benefits Security Administration, the defendants allegedly failed to terminate the plan when the pharmacy ceased operations in January 2007, to obtain an adequate fidelity bond for the plan, to secure fiduciary liability insurance, to file a required EBSA annual return/report form, and to monitor and control the actions of others.

"Workplace retirement plans are designed to provide future financial security for workers and their families, not to serve as a source of interest-free cash for the company," said R.C. Marshall, EBSA's regional administrator in Atlanta, Ga.

The suit seeks a court order requiring that the defendants restore to the plan all losses with lost interest or opportunity costs, offset individual plan accounts of any defendant for losses owed to this plan, be removed as fiduciaries from this plan and be permanently barred from acting as fiduciaries to any employee benefit plan subject to ERISA, as well as that an independent fiduciary be appointed at the defendants' expense.

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, http://www.dol.gov/ebsa.

Solis v. Medipharm-RX
Civil Action File Number 8:10-cv-569-T-33TBM

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