U.S. Department of Labor Reaches Agreement to Restore More Than $1 Million to Chicago-based Health Insurance Trust Fund

CHICAGO, IL – The U.S. Department of Labor has entered into an agreement with the fiduciaries of the National Allied Workers Union (NAWU) Local 831 Insurance Trust Fund to restore $1,113,636 to the Chicago-based health insurance trust fund after an investigation found violations of the Employee Retirement Income Security Act (ERISA). The fiduciaries will make an immediate payment of $813,636 to the NAWU Local 831 Insurance Trust Fund – Claims Reserve Account and $300,000 to the NAWU Local 831 Insurance Trust Fund – Independent Fiduciary Payment Account. Additionally, all four fiduciaries will retire as fund trustees by the end of 2018.

In the consent judgment entered by the U.S. District Court for the Northern District of Illinois, Eastern Division, the fund's fiduciaries - Robert J. Fiascone, Patrick Adams, Tonina Cozzo, and Vivienne Bailey – also agreed to the appointment of an independent fiduciary to ensure the fund functions in accordance with ERISA and for the sole benefit of its participants and beneficiaries.

After an investigation by the Chicago office of the Department's Employee Benefits Security Administration (EBSA) revealed the ERISA violations, the Department filed a complaint in federal court against Fiascone, Adams, Cozzo, and Bailey. The complaint alleged the fund trustees paid unreasonable compensation to the fund's service providers, Aegis Administrative Services Inc. (Aegis) and Noble Consulting Group. The compensation included payment of improper insurance commissions to Aegis. The complaint also alleged that the fund trustees set improper contribution rates for a participating employer in the fund, failed to maintain an adequate fidelity bond, and failed to appoint trustees properly.

"This settlement restores money to the fund for the payment of benefits and services necessary for the operation of the fund," said Jeffrey Monhart, Employee Benefits Security Administration Regional Director in Chicago. "Plan trustees must work solely in the interest of plans and participants."

The court has appointed an independent fiduciary to monitor the fund and the actions of the fund's trustees to ensure the fund functions in the best interest of its participants and beneficiaries. The independent fiduciary is also required to ensure the fund either meets the definition of a "multiemployer plan" under ERISA § 3(37), 29 U.S.C. § 1002(40), or operates in compliance with all applicable state and federal laws as a "multiple employer welfare arrangement" under ERISA § 3(40), 29 U.S.C. § 1002(40).

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

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Acosta v. Fiascone, Adams, Cozzo, Bailey and the National Allied Workers Union Local 831 Insurance Trust Fund
Civil Action No. 1:17-cv-04285