Compliance February 26, 2015

Court Orders Additional Recovery of Misused Pension Funds

A federal court has ordered a fiduciary to repay $300,000 to a number of pension plans, for which the Department of Labor sued over misuse of assets.
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The U.S. District Court for the Eastern District of Kentucky has issued a consent judgment against George Hofmeister, trustee of several pension plans.

Hofmeister has been ordered to repay $300,000 to the plans sponsored by TPOP LLC, formerly known as Metavation LLC; Fairfield Castings LLC, formerly known as Revstone Castings Fairfield LLC; and Fourslides Inc. Hofmeister is also banned from being a fiduciary or service provider to employee benefit plans under the Employee Retirement Income Security Act (ERISA).

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Consent judgments were previously issued against William Tweardy and Nelson Clemmens, members of the investment committee for the Metavation LLC of Southfield, Michigan, and Fairfield LLC of Fairfield, Iowa, pension plans. Consent judgments were also obtained against Robert La Courciere and Pamela Babbish, former trustees of the Fourslides Inc. pension plan. 

More than $12 million has been recovered after investigations by the U.S. Department of Labor resulted in court orders and injunctions against Hofmeister and other fiduciaries. A series of lawsuits alleges that, among others, Hofmeister, Bernard Tew, investment service provider Bluegrass Investment Management LLC, investment service provider Tew Enterprises LLC, Metavation, Fairfield, Fourslides, Tweardy, and Clemmens improperly used pension funds. Judgments against the remaining defendants are being sought by the department in ongoing litigation.

Investigators found improper use of plan assets for the purchase and lease of company property, the prohibited purchase of customer notes from affiliated companies, the prohibited transfer of assets in favor of a party-in-interest, the payment of excessive fees to service providers. Other violations are also alleged. 

In July 2013, the court issued a preliminary injunction removing Hofmeister, Tew, and Bluegrass from exercising management or control of the pension plans, and appointed Fiduciary Counselors, investment advisers in Washington, D.C, to independently administer the plans.

Metavation, Fairfield, Fourslides, Revstone and their affiliated companies, design and manufacture components used in the transportation and heavy-truck industries. Revstone and its various affiliates, including Metavation and Fairfield, were directed by Hofmeister and owned by the irrevocable trusts of Hofmeister’s children.

Deals and People February 26, 2015

Groom Law Adds ACA Experts

Groom Law Group says the addition of two principals to its health and welfare practice expands the firm’s ACA implementation and compliance capabilities.
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Health and retirement law firm Groom Law Group hired Lisa Campbell, recently with the Department of Health and Human Services, and Rachel Leiser Levy, recently with the Department of Treasury, as principals within its health and welfare practice.

Prior to joining Groom, Campbell spent the four years working at the U.S. Department of Health and Human Services (HHS) implementing the Patient Protection and Affordable Care Act (ACA). Campbell held the position of director of the compliance and enforcement division in the oversight group for the Center for Consumer Information and Insurance Oversight (CCIIO), where she led compliance and enforcement of the ACA’s insurance standards for private health insurance.

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Campbell also worked on a number of the ACA’s initial regulations, including the medical loss ratio regulation and other insurance market reforms. Prior to her work at HHS, Campbell worked at the U.S. Department of Labor.

Leiser Levy spent the past three years at the U.S. Department of the Treasury. As associate benefits tax counsel, Levy developed tax policies, regulations and guidance with a primary focus on the ACA. Her work included guidance projects related to the employer shared responsibility, premium tax credits and cost-sharing reductions, the excise tax on high cost employer-sponsored health coverage, and the new tax reporting requirements of Internal Revenue Code sections 6055 and 6056. 

Leiser Levy also advised the Treasury’s Office of General Counsel and the Department of Justice on litigation related to the ACA. Prior to her work at Treasury, Levy worked on the staff of the Joint Tax Committee.

More information about the firm is available at www.groom.com. 

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