US Labor Department obtains judgment to distribute $1.3M to participants in Ants Software Inc. 401(k) Plan in Dunwoody, Georgia

Date of Action: Jan. 8, 2016

Type of Action: Default Judgment and Order

Names of Defendants: Rik Sanchez, Ants Software Inc., and Ants Software Inc. 401(k) Plan

Allegations: In February 2013, Ants Software Inc. ceased operations and at the time Rik Sanchez was fiduciary to the Ants Software Inc. 401(k) Plan in Dunwoody, Georgia. Sanchez informed the plan’s third party administrator, Aspire Financial Services Inc., that the plan was being terminated and requested that Aspire distribute plan assets to the plan participants. Following an investigation conducted by the U.S. Department of Labor’s Employee Benefits Security Administration, the agency filed a complaint on July 2, 2015, against Sanchez and Ants alleging that in May 2013, Sanchez used his plan administrative login information to access each plan participants’ profile information and changed each participant’s mailing address to be that of Ants. He also changed the plan’s new bank account to be an account controlled by him. Due to the change in the plan’s participants’ account information, Aspire refused to proceed with distributing plan assets. The complaint further alleges that Sanchez then requested Aspire to transfer plan management and the assets of the plan to a company named Renowned Holdings Inc., an entity controlled by Sanchez. Again, Aspire refused to proceed with distributing plan assets. Then, Sanchez stopped administering the plan, leaving plan participants unable to receive information about their plan funds or gain access to their plan benefits. At that time, the plan had approximately 76 participants and assets totaling approximately $1,383,875.

Resolution: The order permanently enjoins the defendants from engaging in any further violations of Employee Retirement Income Security Act and permanently bars them from serving as a fiduciary or an employee of any employee benefit plan subject to ERISA. The order appoints, at the defendants’ expense, Receivership Management Inc. of Brentwood, Tennessee as the independent fiduciary of the plan for the purpose of terminating the plan and distributing its assets to plan participants. The defendants are ordered to pay the expenses of the independent fiduciary.  

Court: U.S. District Court for the Northern District of Georgia, Atlanta Division

Docket Number: 1:15-cv-02388-WSD