The U.S. Department of Labor today announced that the owners of Heartland Foods Inc. will restore $283,530 to the Heartland Foods Inc. 401(k) Profit Sharing Plan under terms of a consent judgment and order. The decision follows an investigation by the department’s Employee Benefits Security Administration that found co-owners Karen S. Curry and Danny Woods transferred assets from the plan to the company’s checking account and failed to properly manage the plan’s assets, commingling employee contributions with the company’s general operating accounts in violation of the Employee Retirement Income Security Act.
“Actions like these violate not just the law, but also the trust workers place in their employers,” said L. Joe Rivers, director of EBSA’s Cincinnati Regional Office, which conducted the investigation. “The Labor Department is committed to helping workers obtain their rightful benefits so that they can continue to provide for themselves and their families during retirement.”
The department alleges that from Jan. 1, 2008, through Dec. 31, 2010, Curry and Woods knowingly withheld $85,232 in contributions and loan repayments to the plan from workers’ paychecks and commingled those funds with the general assets of the company. The funds were never remitted to the plan. Additionally, from July 15 through Dec. 12, 2008, Curry and Woods allegedly transferred or caused to be transferred $171,225 in plan assets into a checking account in the company’s name. The total amount due represents principal and lost opportunity cost from Jan. 1, 2008, through April 30, 2013.
The judgment also permanently enjoins both Curry and Woods from serving as fiduciaries or service providers to any employee benefit plan subject to ERISA. Additionally, Curry and Woods are required to waive their rights to their entire individual account balances in the plan for allocation to other participants and to waive any right to their share of the unremitted contributions and loan repayments. An independent fiduciary, Lefoldt and Co. P.A., has been appointed by the U.S. District Court of the Southern District of Indiana to administer, terminate and distribute the plan’s assets to qualified participants.
Source: U.S. Department of Labor