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Compliance June 21, 2006
Feds sue ex-CEO over Mishandled 401(k) Assets
June 21, 2006 (PLANSPONSOR.com) - The Department of
Labor (DoL) is suing Richard Baldyga, former president and
CEO of a now-defunct Alameda, California tech company,
seeking to recover almost $150,000 he is suspected of
shorting from his firm's 401(k) retirement plan
participants.
Reported by PS
style=”MARGIN: 0in 0in 0pt”> The civil lawsuit, which the DoL filed on June 5 in US District Court in San Francisco, claims Baldyga failed to distribute the 401(k) plan’s assets after the company closed in 2003, according to a DoL news release.
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style=”MARGIN: 0in 0in 0pt”>The suit asks the court the remove Baldyga as a plan fiduciary and to appoint an independent fiduciary to terminate the plan and distribute assets to eligible workers. The suit also asks the court to order Baldyga to cooperate with an independent fiduciary and pay the costs of terminating the plan.
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style=”MARGIN: 0in 0in 0pt”>Baldyga, now executive vice president of sales at ServiceSource, said that he met DoL officials about the issue last year. “I’d worked with them earlier to educate them that the company went bankrupt and out of business, and I’ve done everything in my power to help folks get their money back,” he said. “I’m not sure what they’re trying to accomplish here, I have nothing to hide.”
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style=”MARGIN: 0in 0in 0pt”>Meanwhile, the Grand Rapids Press reports that former employees of Rycenga Homes Inc. have filed a lawsuit to recover funds from the defunct company’s insurance carrier. The plan’s administrator filed the lawsuit against The Hanover Insurance Co., claiming Hanover is responsible for money transfers company president Ronald Retsema made from the plan over several years trying to bail out the company. According to the news report, Retsema pled guilty in May to defrauding the plan and Macatawa Bank and restored some of the missing money. However, the participant suit claims up to $913,000 still is owed.
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style=”MARGIN: 0in 0in 0pt”> -Paula Vasan