US Department of Labor seeks independent fiduciary for terminated Homestead Physicians P.A. 401(k) Plan in Florida

Date of Action: Sept. 16, 2016

Type of Action: Complaint

Name of Defendants: Homestead Physicians P.A.
Lorn Leitman
Homestead Physicians P.A. 401(k) Plan

Allegations: Homestead Physicians P.A., in Miami, Florida, sponsored the Homestead Physicians P.A. 401(k) Plan, a defined contribution plan funded by employee elective deferral contributions. Lorn Leitman – an attorney and certified public accountant – owned Homestead and served as the plan’s trustee. On Sept. 14, 2010, Homestead dissolved administratively and ceased operations later that month. At that time, Leitman began facilitating distributions to terminated participants. He failed, however, to ensure that terminated participants received all plan distributions. As of Dec. 31, 2012, one participant remained in the plan with an account balance of more than $91,000.

Background: In July 2011, a federal court sentenced Leitman to 210 months in federal prison for his role in a 10-year Ponzi scheme. The court found he violated the mail-fraud statute after he defrauded elderly victims, retirees, friends and family members in the scheme that sought investments in either phantom residential mortgages or a separate venture burdening U.S. military personal with predatory and usurious loans.

In a separate matter in November 2011, Leitman was convicted of one count of theft or embezzlement from an employee benefit plan. He was sentenced to 27 months and is concurrently serving time in both cases at this time.

In an unrelated civil case brought by the U.S. Department of Labor, the U.S. District Court for the Southern District of Florida, Miami Division barred Leitman permanently from serving as a fiduciary to any employee benefits plan. The court filed the order on Oct. 9, 2013, in the case, Solis v. South Florida Emergency Physicians, P.A. Profit Sharing Plan, et al, Case No. 13-cv-23499-00.

Resolution: The department seeks the court to appoint a successor fiduciary or administrator to the plan to replace Leitman and Homestead Physicians P.A. from serving as fiduciaries.

Court: U.S. District Court for the Southern District of Florida, Miami Division

Docket Number: 1:16-cv-23992-RNS