The DOL is suing Empact Medical Services Inc. and its officers Angela Cotter and Elizabeth Gail DeBusk to restore $10,582 in assets to the company’s 401(k) plan that allegedly were mishandled by the defendants in violation of the Employee Retirement Income Security Act (ERISA).
An investigation by the DOL’s Employee Benefits Security Administration (EBSA) found that between January 2006 and August 2008 the defendants withheld $10,582 in employee contributions to the plan, but failed to segregate the contributions from the company assets as soon as they could do so, and failed to forward them to the plan in a timely manner, resulting in lost opportunity costs for the plan participants. Additionally, Cotter and DeBusk commingled the contributions with the company’s general assets.
The suit seeks to require the defendants to restore all losses to the plans, including lost interest or lost opportunity costs, and to offset the defendants’ 401(k) plan accounts by the amount of losses if the losses are not otherwise restored by the defendants. In addition, the suit asks that the defendants be permanently barred from serving as fiduciaries of any employee benefit plan subject to ERISA, and for a fiduciary successor to be appointed at the defendant’s expense.
The company filed bankruptcy in March 2009. The plan currently has 15 participants.