U.S. Labor Department sues Dallas paralegal company and executive to recover plan assets for company's SIMPLE IRA plan

DALLAS - The U.S. Department of Labor has sued Paralegals Plus Inc. in Dallas and its chief executive officer for failure to remit employee contributions and plan assets to the company's savings incentive match plan for employees individual retirement account, or SIMPLE IRA plan and for using the plan's assets to benefit the company, in violation of the Employee Retirement Income Security Act.

The department's lawsuit alleges that the company and chief executive officer Jerry Haden violated ERISA by failing to remit and timely forward employee contributions to the plan and to segregate plan assets from those of the company. As a result of their improper actions, $21,615 in contributions was untimely deposited into the plan and $10,055.73 was never remitted to the plan. The suit also alleges that the defendants used plan assets for the company's benefit and failed to properly administer the plan. The suit was filed in the U.S. District Court for the Northern District of Texas-Dallas Division.

The department's suit asks the court to require that the defendants restore all losses with interest, correct any transactions prohibited by law and offset any claims or benefits owed to them by the plan. The suit also seeks the appointment of an independent fiduciary to oversee the plan and to distribute the plan's assets to eligible participants.

"Companies and their executives have an obligation to ensure that plan assets withheld from workers' wages are held in trust to pay future benefits," said Roger Hilburn, director of the Dallas Regional Office of the department's Employee Benefits Security Administration, which investigated the case. "This case demonstrates our commitment to take legal action to protect the hard-earned benefits of workers."

Paralegals Plus Inc. formerly operated offices in Dallas, Fort Worth and San Antonio, Texas. The plan was terminated Dec. 31, 2006; however, there were still seven participants in the plan as of Dec. 31, 2008, the latest data available.

This case is part of EBSA's employee contribution project to safeguard workers' contributions to 401(k) and health benefit plans. Employers and workers can reach EBSA's Dallas office at 972.850.4500 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa.

Solis v. Paralegals Plus Inc.

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