US Labor Department lawsuit leads to restoration of more than $2.3 million to annuity, vacation and hiring hall funds of IATSE Local 829 in New York

NEW YORK — The trustees of the pension plan, annuity fund and vacation fund of Exhibition Employees Local 829 of the International Association of Theatrical Stage Employees in New York repaid a total of $2,256,817, with an additional $50,000 scheduled to be paid, to the funds following a consent judgment, which came after a U.S. Department of Labor investigation revealed numerous violations of the Employee Retirement Income Security Act. The trustees have also agreed to make additional payments and forfeitures of their own annuity plan accounts, resign and take other corrective action.

"This case involved pervasive and serious diversions of retirement plan assets," said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. "Trustees must carry out their fiduciary duties solely in the interests of plan participants who have invested their funds and trust in them."

The department filed suit in February 2012 in the U.S. District Court for the Southern District of New York, alleging numerous violations of the Employee Retirement Income Security Act by the trustees. These included the improper transfer of assets from the Local 829 pension plan to the union's annuity, vacation, hiring hall and general funds as well as the improper transfer of at least $240,000 from the pension plan and annuity fund to service providers.

Under the consent judgment, the trustee defendants have repaid $1,975,209 to the pension plan, $219,467 to the annuity fund and $112,141 to the vacation fund. They have also placed $268,181.82 in an escrow fund to pay civil money penalties. Additionally, defendants Kevin Dunphy, Manuel Farina, John T. Hall, Michele Sullivan and John Walsh forfeited up to $325,000 of their annuity fund balances. The defendants also agreed to resign as trustees and to be permanently barred from serving in a fiduciary or service provider capacity for these or any other ERISA-covered benefit plans.

The investigation was conducted by the New York Regional Office of EBSA. The case was litigated by the department's Regional Office of the Solicitor in New York.

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Harris v. John V. McNamee Jr., Kevin Dunphy, Manuel Farina, John T. Hall, John Hamilton, Michele Sullivan, John Walsh, Exhibition Employees Local 829 IATSE Pension Plan, Exhibition Employees Local 829 IATSE Annuity Fund and Exhibition Employees Local 829 IATSE Vacation Fund.

Civil Action Number: 12-CV-1511