DOL Recovers Retirement Plan Assets for Participants

May 21, 2012 ( – Two companies have settled lawsuits with the Department of Labor (DOL), agreeing to restore retirement assets to participants.

Austin, Texas-based information technology firm HBMG and its president, Manuel Zarate, have agreed to settle a lawsuit alleging the company failed to transfer employee retirement fund contributions into its 401(k) program. The DOL claims Zarate diverted the retirement plan funds for his own benefit.  

Mentor, Ohio-based North Coast Wood Products has settled a lawsuit alleging the company’s owner illegally diverted money from 11 participants in the now-defunct company’s profit-­sharing plan. The former employees will collect more than $100,000, compensation they should have received when the company folded in 2005.  

Under the settlement, HBMG and Zarate will restore about $65,000 in employee contributions, plus in­­terest. Zarate can no longer have fiduciary responsibilities for any plan covered by the Employee Retire­­ment Income Security Act (ERISA). HBMG’s 401(k) plan will be dissolved and participants may roll over their contributions to other retirement plans as soon as the monies are paid.  

The DOL claims North Coast’s owner, Harvey Fishleigh, transferred retirement plan assets to his son during a three-year period. Under the terms of the settlement, the Fishleighs must also pay interest on the diverted funds, bringing the total payout to $114,177. Addi­­tionally, the Fishleighs will pay for a fiduciary to oversee the plan’s funds.