According to allegations by the Department of Labor (DOL), Ants Software Inc. in Dunwoody, Georgia, ceased operating in February 2013. At the time, Rik Sanchez was fiduciary to the Ants Software 401(k) plan. The previous November, Sanchez had been promoted to chief executive of the firm as well as chairman of the board of directors. Sanchez informed Aspire Financial Services Inc., the plan’s third-party administrator, that the plan was being terminated and requested that Aspire distribute plan assets to the plan participants.
Following an investigation conducted by the DOL’s Employee Benefits Security Administration (EBSA), the agency filed a complaint on July 2, 2015, against Sanchez and Ants alleging that in May 2013, Sanchez used his plan administrative login information to access each plan participant’s profile information and change each participant’s mailing address to Ant’s mailing address.
Sanchez also changed the plan’s new bank account to be an account he controlled, according to the DOL. Because of the change in the participant account information, Aspire refused to distribute plan assets. The complaint alleges that Sanchez requested Aspire to transfer plan management and the assets of the plan to a company named Renowned Holdings Inc., an entity controlled by Sanchez. Again, Aspire refused to proceed with distributing plan assets.
Next, Sanchez stopped administering the plan, leaving plan participants (estimated at 76 people) unable to receive information about their plan funds or gain access to their plan benefits. At that time, the plan had assets totaling approximately $1,383,875.
On January 8, the DOL permanently enjoined the defendants—Sanchez, Ants Software and the Ants Software 401(k) Plan—from engaging in any further violations of the Employee Retirement Income Security Act (ERISA) and permanently bars them from serving as a fiduciary or an employee of any employee benefit plan subject to ERISA.
The DOL’s order appoints, at the defendants’ expense, Receivership Management Inc. of Brentwood, Tennessee, as the independent fiduciary of the plan for the purpose of terminating the plan and distributing its assets to plan participants. The defendants are ordered to pay the expenses of the independent fiduciary.