U.S. Department of Labor Obtains Default Judgment Requiring Defunct Virginia Company to Restore $21,880 to Employee 401(k) and Benefit Plans

MCLEAN, VA – The U.S. District Court for the Eastern District of Virginia has approved a default judgment that requires Mahan Consulting Group LLC and its president and owner Shaun Marzett to restore $21,880 to the 401(k), health and welfare benefit plans of the now defunct consulting company in McLean, Virginia.

The action by District Judge T.S. Ellis III follows a U.S. Department of Labor Employee Benefits Security Administration (EBSA) investigation that found – from August through December 2016 – fiduciaries Mahan Consulting Group and Marzett violated the Employee Retirement Income Security Act (ERISA). EBSA determined that the fiduciaries withheld employee contributions, failed to remit them to the company’s 401(k) plan, and failed to inform employees about the lapse of their benefits under the health and welfare plan.

The judgment requires the defendants to restore $6,443.80 in withheld, but unremitted, employee contributions to the Mahan Consulting Group 401(k) plan, along with interest of $1,385.71; make $2,542.71 in matching employer contributions to the 401(k) plan; and reimburse $1,508.68 in uncovered medical costs due to the lapse of employee health benefits from the Mahan Consulting Group Health and Welfare Plan. In addition, they must pay employees $10,000 for failing to maintain life insurance benefits. The total restitution to four remaining plan participants is $21,880.90. 

The court also removed the defendants as fiduciaries of the plans, permanently enjoined them from serving as fiduciaries to any ERISA-covered plan in the future and appointed an independent fiduciary to distribute the assets and terminate the plans.  

“Fiduciaries must work solely in the interest of plans and participants. When they fail to do so, they jeopardize the financial security of workers, which we will not tolerate,” said Employee Benefits Security Administration Regional Director Michael Schloss in Philadelphia, Pennsylvania.

“The U.S. Department of Labor took this action on behalf of this company’s former employees to ensure the proper administration of the plans, and secure the participants’ access to their hard-earned retirement funds,” said Regional Solicitor Oscar L. Hampton III, in Philadelphia.

EBSA’s Washington, D.C., district office investigated and the Regional Solicitor in Philadelphia litigated on the department’s behalf.

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/agencies/ebsa.

EBSA’s mission is to assure the security of the retirement, health and other workplace related benefits of America’s workers and their families. EBSA accomplishes this mission by developing effective regulations; assisting and educating workers, plan sponsors, fiduciaries and service providers and vigorously enforcing the law.

The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and, assure work-related benefits and rights.