US DOL Investigation, Litigation Leads to $2M Settlement
Investigation Litigation Leads to $2M Settlement
The fiduciaries of an international design firm in Moorestown, New Jersey must pay more than $2 million to restore mismanaged assets to the company’s retirement plan and in penalties after the U.S. Department of Labor agreed to a settlement following an investigation and litigation.
An investigation by the department’s Employee Benefits Security Administration determined that InterArch Inc. and Shirley and Vernon Hill, fiduciaries of the InterArch Inc. Profit-Sharing Plan., violated their fiduciary duties under the Employee Retirement Income Security Act.
“The law requires fiduciaries to discharge their duties solely in the interests of plan participants and beneficiaries in a prudent manner, and to diversify plan investments so the risk of large losses is minimized,” said Employee Benefits Security Administration Acting Regional Director Cristina O’Brien, in Philadelphia.
Following EBSA’s investigation, the department’s Office of the Solicitor in New York filed a complaint in the U.S. District Court for the District of New Jersey alleging that InterArch and the two individual fiduciaries engaged in self-dealing and violated their duties of loyalty and prudence and their duty to diversify, which caused the plan to enter into prohibited transactions.
The court entered a consent judgment and order on Sept. 23, 2022, requiring InterArch Inc. and fiduciaries Shirley and Vernon Hill to pay $1,836,853, to plan participants and $183,685, in penalties to resolve the allegations.
“The Employee Benefits Security Administration is satisfied that this settlement will result in a substantial recovery to plan participants of the losses that the fiduciaries’ actions caused,” added O’Brien.
“This case demonstrates the U.S. Department of Labor’s ongoing commitment to recovering losses caused by plan fiduciaries’ failure to comply with the law,” said Regional Solicitor of Labor Jeffrey S. Rogoff in New York.
InterArch Inc. and the Hills will additionally pay approximately $1.1 million to the retirement plan to resolve a separate but related private class action lawsuit filed by a former employee and those similarly situated in the U.S. District Court for the District of New Jersey on May 27, 2020.
In total, between the department’s settlement and the private class action lawsuit settlement, more than $3 million will be restored to the retirement plan.
This story once again demonstrates how legal investigations done well can lead to BIG victories in the courtroom or more favorable settlements. We know that success or failure in the courtroom or during the settlement process depends on having the very best, most detailed information about a case. That’s why great attorneys and law firms across the country work with the worldwide team of Santoni Investigations who will make sure you know everything to maximize the settlement process or win your case in court!
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