U.S. Department of Labor obtains civil contempt order against former president of Southern California telecommunications company

Los Angeles – The U.S. Department of Labor has obtained a contempt order against Kenneth Owen, the former president of the now-defunct Torrance, Calif.-based telecommunications company Communications 2000, for failing to pay restitution required under a 2006 consent judgment for unremitted employee contributions to two employee benefits plans that were sponsored by Communications 2000, as well as plan administrative fees. The judgment requires Owen to pay all expenses associated with the prosecution of his civil contempt proceeding and to remit the original restitution of $28,229 on or before July 16, 2010.

“This action sends a message that the U.S. Department of Labor will vigorously pursue those who misuse the assets of employee benefit plans,” said Crisanta Johnson, regional director for the department’s Employee Benefits Security Administration in Los Angeles. “This case is an example of how our strong enforcement program helps protect the retirement security of workers.”

In 2005, the Labor Department sued Owen and Communications 2000 for failing to remit at least $15,021 in employee 401(k) plan contributions withheld from employees’ paychecks and $7,708 in employee health, disability and life insurance payments between October 2001 and April 2002. Owen allegedly retained the plans’ assets and used the money to pay corporate expenses in violation of the Employee Retirement Income Security Act.

Under the original judgment entered in the U.S. Central District of California, the court removed Owen as a fiduciary to the plans and permanently enjoined him from serving in a fiduciary capacity to any employee benefit plan. Owen also was required to restore the plans’ contributions and pay $5,500 in fees for the services of an independent fiduciary to administer the plans, collect money owed to them and distribute any funds restored to the plans.

Prior to this judgment, Owen failed to respond to efforts by the Labor Department to obtain his compliance.

Employers and workers with questions or concerns regarding their private sector pension and health plans can contact EBSA’s Los Angeles Office at 626.229.1000 or toll-free at 866.444.3272. Information is also available on the agency’s Web site at www.dol.gov/ebsa.

Solis v. Communications 2000 Inc., Kenneth Owen, Karen Mars, Communications 2000 Inc. Welfare Plan
Civil Action Number: CV05-5890 RJK (Ex)

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