US Labor Department seeks to recover more than $256,000 in retirement assets for workers at Heartland Foods in Indianapolis

INDIANAPOLIS – The U.S. Department of Labor has filed a complaint in federal court seeking to restore $256,457.08, plus lost opportunity costs, to the Heartland Foods Inc. 401(k) Profit Sharing Plan. Based on the findings of an investigation by the department’s Employee Benefits Security Administration, the complaint alleges that co-owners Karen S. Curry and Danny Woods failed to properly manage the assets of the plan by comingling employee contributions with the company’s general operating accounts, in violation of the Employee Retirement Income Security Act.

“Incorporating employees’ voluntary salary contributions into the general assets of a company and failing to forward them to their retirement plan is a violation of the law and the trust workers have placed in their employers,” said L. Joe Rivers, director of EBSA’s Cincinnati Regional Office, which conducted the investigation. “The Labor Department is committed to helping workers obtain their rightful benefits so that they can continue to provide for themselves and their families during retirement.”

The department alleges that from Jan. 1, 2008, through Dec. 31, 2010, Curry and Woods, with knowledge of each other’s actions, withheld $85,232.08 in contributions and loan repayments to the plan from workers’ paychecks and commingled those funds with the general assets of the company. The funds were never remitted to the plan.

Additionally, from July 15 through Dec. 12, 2008, Curry and Woods allegedly transferred or caused to be transferred $171,225 in plan assets into a checking account in the company’s name. Those funds were never remitted to the plan.

Finally, in January 2011, Curry and Woods distributed Woods’ own plan account to him and distributed another individual account to a participant, exceeding the allowable distribution limit by $21,610.71.

As of April 30, 2011, the plan had 35 participants and $228,393.72 in assets, the latest data available.

The complaint seeks the restoration of all plan losses for which the defendants are liable, with appropriate interest. It also seeks to order Curry and Woods to correct the prohibited transactions and to permanently enjoin both from serving as fiduciaries or service providers to any employee benefit plan subject to ERISA. Additionally, both Curry and Woods would be required to disgorge any profits received as a result of the prohibited transactions. An independent fiduciary would be appointed to administer the plan.

The case is being litigated by the Labor Department’s associate regional solicitor in Cleveland. For help with problems related to private sector retirement and health plans, employers and workers can reach EBSA’s Cincinnati office at 859-578-4680 or toll-free at 866-444-3272. Additional information can be found at www.dol.gov/ebsa.

Solis v. Karen S. Curry and Danny Woods, individually and as fiduciaries of the Heartland Foods Inc. 401(k) Profit Sharing Plan, Heartland Foods Inc. and the Heartland Foods Inc. 401(k) Profit Sharing Plan

Civil Action Number: 1:12-cv-0301

U.S. Department of Labor news materials are accessible at www.dol.gov. The information above is available in large print, Braille, audio tape or disc from the COAST office upon request by calling 202-693-7828 or TTY 202-693-7755.