Compliance March 25, 2009

Michael Vick Sued for Prohibited Pension Transfers

March 25, 2009 (PLANSPONSOR.com) - The U.S. Department of Labor has filed a lawsuit in federal district court alleging that former National Football League (NFL) player Michael Vick and others violated federal employee benefits law by making a series of prohibited transfers from a pension plan sponsored by one of Vick's companies.
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In a news release, the DoL said it also simultaneously filed an adversary complaint in federal bankruptcy court to prevent Vick from discharging his alleged debt to the MV7 retirement plan. MV7 was a celebrity marketing enterprise owned by Vick, who filed for Chapter 11 bankruptcy on July 7, 2008.   The company sponsored a defined benefit retirement plan for nine current and former employees as of October 2008.

The DoL alleges that Vick violated his duties as a plan trustee under the Employee Retirement Income Security Act (ERISA) by making a series of prohibited transfers from the plan for his own benefit. The plan assets were partially used to help pay the criminal restitution imposed upon Vick after his conviction for unlawful dog fighting as well as his attorney in the bankruptcy cases.  

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From March 7, 2007, through July 7, 2008, Vick made and caused $1.35 million in withdrawals from the retirement plan, DoL alleges.

Former Vick financial advisers Mary Wong and David Talbot were also named in the complaint for allegedly participating in some of the transfers.   In addition, MV7 is charged with having a co-fiduciary liability for the actions of Vick and Talbot.

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