Weekend DOL Blotter - 6/28/2008

Another busy week at the DOL's EBSA enforcement desk.

"Trouble in Music City"

On June 23rd the DOL reported on its website: "U.S. Department of Labor sues president of Nashville music entertainment company to recover employee benefit contributions":

"The lawsuit alleges that, over the course of a year, the company withheld employee contributions owed to the plan, failed to segregate the contributions from the company’s assets, and did not forward the assets to the plan in accordance with ERISA and the plan’s governing documents. Instead, the defendant co-mingled the funds with the general assets of the company.

“Employees intended these contributions to pay for their future retired years, not to benefit the company,” said Rebecca Marshall, director of the Atlanta Regional Office of the department’s Employee Benefits Security Administration (EBSA), which investigated this case.

...the suit seeks to remove Taylor as fiduciary of the plan, appoint a successor trustee to distribute restored assets to the nine participants, and bar Taylor from serving as a fiduciary of any ERISA-covered plan in the future."

Serious stuff...

On other news:

"'Fine Line' Fiduciary"

"Former president of Fine Line Drywall, Keene, New Hampshire pleads guilty to theft of employee IRA funds"

"In 2006, Blanchard was indicted and charged with theft by recklessly failing to make specified payments to the Fine Line Drywall Inc. Simple IRA Plan from February through December 2004, when the company went out of business. Specifically, the alleged theft involved employee contributions totaling nearly $30,000 and employer matching contributions of more than $18,000."

"He was alleged to have stolen these funds for his own personal expenses."

After pleading guilty, Blanchard was sentenced to a prison term of two to five years in the New Hampshire State Prison and suspension of two years provided the defendant meets certain conditions. Blanchard was ordered to make full restitution within two years, perform 200 hours of community service and be subject to random testing for controlled substances.