US Labor Department sues Wilmington, Del., construction company to recover lost employee contributions to 401(k) plan

Date of Action: May 29, 2014

Type of Action: Complaint

Name(s) of Defendant(s): Frank Robino Companies LLC, Michael Stortini, Paul Robino and Barbara Becker-Graham, and Frank Robino Companies LLC 401(k) plan

Allegations: Based on an investigation conducted by the U.S. Department of Labor’s Employee Benefits Security Administration, the Secretary of Labor filed a complaint alleging the following:

In 1994, Frank Robino Companies LLC a company based in Wilmington, Del., established the Frank Robino Companies LLC 401(k) plan for its employees. The company served as the plan administrator. Paul Robino, the chairman of the board, served as a trustee of the plan. Michael Stortini (the company’s vice-president and director of operations, also served as a trustee of the plan. Barbara Becker-Graham, the treasurer of the company, also served as a trustee of the plan. As plan trustees, Robino, Stortini and Becker-Graham exercised discretionary authority and control over the administration of the plan and the management of its assets and were considered fiduciaries to the plan.

The department alleges that between May 2009 through August 2009, Stortini transferred all of the assets from the plan’s account at Charles Schwab to an account in the name of Robino-Stortini Holding Company, which was also held at Charles Schwab. Robino, Stortini and Becker-Graham were each owners or investors in the Holding Company. Once the plan’s assets were transferred to the Holding Company, Stortini then wrote checks from the Holding Company to various entities, including himself and the company. On Oct. 24, 2013, Stortini entered a plea in United States District Court for the District of Delaware wherein he admitted to knowingly converting the plan’s assets for his own use. Robino and Becker-Graham, as trustees of the plan, took no steps to monitor the performance of the plan’s assets invested in the Holding Company or verify the existence of its assets. The Holding Company is now defunct and participants in the plan are unable to obtain their benefit payments.

Resolution: The complaint seeks restitution to the plan of all losses, including lost opportunity costs; removal of Stortini, Robino, Becker-Graham and the company as fiduciaries for the plan and any other Employee Retirement Income Security Act-covered plan for which they act as fiduciaries; and the appointment of an independent fiduciary to administer the plan with all costs of administration to be borne by the defendants. It also seeks an order requiring the defendants to provide the Secretary of Labor with all books and records relating to the finances and administration of the plan; an order requiring the defendants to make an accounting to the Secretary and the independent fiduciary of all contributions to the plan, and all transfers, payments, or expenses incurred by the plan; and an injunction permanently barring the defendants from serving as fiduciaries to any employee benefit plans covered by ERISA.

Court: United States District Court for the District of Delaware

Docket Number: 1:14-cv-00685-UNA

U.S. Department of Labor 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.