Court Orders Past Trustee to Reimburse Plan Beneficiaries

The former owner is also barred from serving as a fiduciary, trustee, agent, or representative to an employee benefit plan. 

The U.S. District Court for the Eastern District of North Carolina has ordered the former owner of House of Lights Inc. to pay a restitution of more than $1 million to the company’s profit-sharing plan, after it was found he had issued checks for purposes prohibited under the Employee Retirement Income Security Act (ERISA).

Thomas E. Beverly Sr., who also served as the plan administrator and trustee to the company, will have to pay $1,639,983 restitution to the plan—which includes lost earnings of $331,121—and is ordered to hire a successor fiduciary who will take care of the restitution towards plan beneficiaries. According to the court, Beverly will have to issue the restitution by September 15.

In an investigation by the U.S. Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA), it was found that Beverly had issued checks from the plan’s checking account to the House of Lights, himself and others for $1,308,862, which violated ERISA, from November 2011 to January 2014. The House of Lights Inc. Pension Plans & Trust had merged with the House of Lights Inc. Profit-Sharing Plan back in October 2010.

Beverly disclosed that some of the checks issued had gone towards payments for company-owned and personal properties. In addition to the restitution charge, Beverly is permanently prohibited from violating provisions of Title I of ERISA, and from serving as a fiduciary, trustee, agent or representative to an employee benefit plan.