DOL Alleges Profit-Sharing Plan Fiduciaries Took Retirement Plan Assets

The Department of Labor has sued a New York tree service, alleging that plan fiduciaries breached their duties to participants of the Trees R Us Inc. Profit Sharing Plan by stealing $149,380 from plan accounts in 2019 and 2020.

Tracey Recenello, the company’s owner, president and a plan trustee, and Agnita Recenello—the company’s secretary and Tracey’s spouse—used the money for company and personal expenses, mortgage payments and college tuition, according to the DOL’s complaint, filed April 2 in U.S District Court for the Eastern District of New York.

Further, the DOL alleges the Recenellos and the company have failed to file required annual Form 5500 reports to the regulator.

“Fiduciary defendants breached their duties of exclusive purpose, prudence and loyalty, caused the Plan to enter into non-exempt prohibited transactions, and engaged in self-dealing,” the DOL’s attorneys argue in the complaint.

The DOL is seeking a court order to restore all losses to the plan; that any money currently in fiduciary defendants’ accounts in the plan be offered to restore the misappropriated funds; and that the fiduciary defendants promptly file annual reports for the plan, according to the complaint.  

Additionally, the DOL requests the court appoint an independent fiduciary to administer the plan at the fiduciary defendants’ expense, remove the Recenelllos from their roles as fiduciaries to the plan and permanently bar them from serving as fiduciaries to ERISA-covered plans.

Trees R Us Inc. is located in Bay Shore, New York, and established the plan effective January 1, 2012, according to the complaint.

The Trees R Us Inc Profit Sharing Plan held $138,994 in retirement assets for 30 participants, as of the last DOL Form 5500 filing, in 2017.

The DOL sued two Maryland profit-sharing retirement plans earlier this year and at least six profit-sharing plans in 2023.

Representative of the DOL referred a request for comment on the lawsuit to the complaint filing. Representatives of Trees R Us could not be reached for comment.

The case is Julie A. Su, acting Secretary of Labor, United States Department of Labor v. Trees R Us Inc et al.  

The DOL is represented by Seema Nanda, solicitor of labor; Jeffrey Rogoff, regional solicitor and Michael Hartman, counsel for ERISA at the office of the regional solicitor.