U.S. Labor Department sues San Jose firm and owner to recover workers' retirement assets

San Jose, California – The U. S. Department of Labor sued Mili Group Inc. of San Jose, and its owner for allegedly misusing retirement plan assets for their own benefit, in violation of the Employee Retirement Income Security Act.

The suit alleges that between 2006 and 2009, Cuong Do and his company improperly authorized at least $297,040 in withdrawals and loans from the retirement plan and used $247,900 in plan assets to purchase a condominium in Florida for the benefit of the defendants. The suit also alleges they failed to deposit to the retirement plan accounts between $15,000 and $20,000 in rental income from the condominium.

As relief, the department is seeking a court order to require that Do and the company restore to the plan any losses resulting from the unlawful transactions, to remove them as fiduciaries of the retirement plan, and bar the defendants from serving as fiduciaries or service providers to any plan governed by ERISA. In addition, the suit asks the court to appoint an independent fiduciary to manage and administer the plan and, if necessary, wind down the affairs of the retirement plan.

In a separate legal action, the Labor Department filed an adversary complaint in the U.S. Bankruptcy Court to prevent Do from discharging the debt that he owes to the retirement plan due to his alleged violations of ERISA. That complaint, filed in the U.S. Bankruptcy Court for the Northern District of California, alleges that Do used the plan’s assets to benefit himself and his company. Both legal actions resulted from an investigation conducted by the San Francisco Office of the department’s Employee Benefits Security Administration.

“Plan officials have a duty to manage and protect employees’ benefit plans and their assets,” said Jean Ackerman, EBSA’s regional director in San Francisco. “Our action today is designed to restore to the plan assets that were not properly preserved for the company’s workers.”

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 and workers can reach the San Francisco office at 415.625.2481 or toll-free number at 866.444.3272, for help with problems relating to private sector retirement and health plans.

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. 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 www.dol.gov/ebsa.

Solis v. Do Civil Action Number 5:10-cv-03823-HRL
In re: CUONG VIET DO, and MIHNA T. DO (Case No.: 10-51583)

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