Judges orders fiduciary to restore losses to the employee benefit plan of The Anesthesia & Pain Center of Akron, Ohio

Date of Action: Aug. 1, 2014

Type of Action: Consent Order and Judgment

Names of Defendant: The Anesthesia & Pain Center of Akron Inc., The Anesthesia & Pain Center of Akron Inc. 401(k) and Profit Sharing Plan, Frank Kousaie

Allegations: The Anesthesia & Pain Center of Akron Inc. was the plan sponsor and plan administrator of The Anesthesia & Pain Center of Akron Inc. 401(k) and Profit Sharing Plan. Frank Kousaie was sole shareholder of the company. From Feb. 28, 2007, to at least Nov. 16, 2011, Kousaie and the company withheld money from the paychecks of employees as contributions to the plan, but failed to segregate and remit all contributions to the employee benefit plan. The contributions were commingled with the general assets of the company and used for general operating expenses. Furthermore, the company and Kousaie failed to maintain a fidelity bond to protect plan assets and to maintain accurate records of employer contributions allegedly made by the company in violation of the Employment Retirement Income Security Act.

As of Dec. 31, 2009, the plan held over $150,000.00 in assets.

Resolution: The judgment finds Kousaie liable for $25,686.90, which represents all losses, including unremitted contributions and lost opportunity costs, resulting from his fiduciary breaches. Pursuant to the judgment, Kousaie waives his right to receive the $12,843.29 owed to his personal account, and the remaining losses are to be paid through an approved Debtors’ Plan of Reorganization filed in In re: Frank M. Kousaie, Jr., et al., United States Bankruptcy Court, Northern District of Ohio, Eastern Division, Case No. 13-53034.  Through a separate proceeding in the bankruptcy case, Kousaie has also agreed not to collect any amount owed to his plan account through the Debtors’ Plan of Reorganization, and will instead use those amounts to pay losses to other plan participants.

Kousaie is also permanently enjoined violating ERISA in the future.

The court has appointed the independent fiduciary, AMI Benefit Plan Administrators Inc. in Youngstown, Ohio, to distribute the plan’s assets and terminate the plan.

Court: U.S. District Court for the Northern District of Ohio, Akron, Ohio

Docket Number: 5:14-cv-00366

Employers and workers can reach EBSA’s toll-free at 866-444-3272 for help with problems relating to private-sector retirement and health plans. Additional information can be found at www.dol.gov/ebsa.

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.