US Labor Department obtains consent judgment restoring more than $475,000 to 401(k) plan of Wilmington, Delaware, construction company

Date of Action: Nov. 19, 2014

Type of Action: Consent Judgment

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

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 on May 29, 2014, alleging:

Frank Robino Companies LLC, Paul Robino, Michael Stortini, and Barbara Becker-Graham each breached their fiduciary duties as trustees to the Frank Robino Companies LLC 401(k) plan. Robino, Stortini, and Becker-Graham authorized the investment of plan assets into the Robino-Stortini Holding Company without taking any steps to evaluate the soundness of the investment, and then failed to monitor the performance of the Holding Company. Between May 2009 and August 2009, Stortini transferred all of the assets from the plan’s account to an account in the name of Robino-Stortini Holding Company. After the transfer, Stortini wrote checks from the Holding Company account to various entities, including himself and Frank Robino Companies LLC, thereby depleting the account. The Holding Company became defunct and 41 plan participants were unable to obtain their benefit payments.

Resolution: Pursuant to the terms of the consent judgment, the Department agreed to resolve all claims against the defendants in exchange for the payment of restitution of $475,740.96. The restitution includes full payment of missing plan assets, lost interest, and payment for services of an independent fiduciary responsible for the plan administration, management, and distribution of the plan assets. The consent judgment also notes that the Secretary will impose a penalty of 20 percent of the applicable recovery amount, and permanently bars the defendants from serving in any fiduciary capacity to any Employee Retirement Income Security Act-covered plan in the future.

Court: United States District Court for the District of Delaware

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

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