Get more! Sign up for PLANSPONSOR newsletters.
Compliance January 12, 2018
Court Orders Plan Fiduciaries to Restore Losses for Misusing Plan Assets
The Department of Labor found fiduciaries failed to remit salary deferrals and loan repayments and withdrew assets from the plan trust to use for non-plan purposes.
Reported by PS
Following a U.S. Department of Labor (DOL) investigation, the U.S. District Court for the Northern District of Illinois entered a judgment requiring Michael Lewis, former president of Acme Orthotics and Prosthetic Laboratories Inc., to restore $128,535.75 in losses owed to the company’s Profit Sharing 401(k) Plan and Trust.
As fiduciaries, Lewis and co-defendant Monica Fox failed to remit $58,531.72 in employee salary deferral contributions and loan repayment contributions, including lost opportunity costs, to the plan from July 2010, through April 2012. In addition, Lewis liquidated $70,004.03 in plan assets, including lost opportunity costs, from April 2012, to March 2015, and used the funds for non-plan purposes.
Headquartered in Chicago, Acme Orthotic and Prosthetic Laboratories Inc., sponsored the plan and closed it in February 2015. Lewis was Acme’s president and sole owner; Fox was Acme’s executive director responsible for the company’s payroll.
The judgment permanently enjoins Lewis and Fox from acting as fiduciaries or service providers to employee benefit plans subject to the Employment Retirement Income Security Act (ERISA).