According to the DOL, Michael Earl Galstad was president and majority owner of Cargill Heating & Air Conditioning Co. and failed to remit $27,812.90 in employee contributions to the plan from June 25, 2009, to April 12, 2012. The contributions remained in the company’s general funds for its use. Galstad restored $23,657.86 in unremitted employee contributions to the plan; however, $4,155.04 in employee contributions remains outstanding.
Additionally, pursuant to several state and federal contracts subject to the Davis Bacon Act, Service Contract Act, or state prevailing-wage laws, Cargill and Galstad agreed to pay employer contributions as prevailing-wage fringe benefits to the plan. Between June 30, 2009, and April 30, 2012, $236,738.12 in prevailing wage contributions was owed to the plan. Galstad remitted $38,500 to the plan; however, the remaining $198,238.12 remains outstanding.
Cargill and Galstad also failed to collect employer contributions owed to the plan from May 31, 2008, through May 31, 2010, resulting in a loss of $59,009.31 to the plan.
The complaint seeks a judgment ordering Galstad and Cargill Heating & Air Conditioning Co. Inc. to: make good all losses to the plan, including lost opportunity costs, resulting from fiduciary breaches; correct the prohibited transactions; disgorge all ill-gotten gains; and to permanently enjoin them from serving as fiduciaries or service providers to any employee benefit plan covered by the Employee Retirement Income Security Act (ERISA).
Meanwhile, the DOL announced that a federal judge ordered a trustee to restore losses to the Louis & Riparetti Retirement Plan in Scotts Valley, California. The U.S. Department of Labor filed a lawsuit on April 10, 2012, to recover unremitted employee contributions, uncollected employer contributions, and associated lost opportunity costs for the Louis & Riparetti Inc. Retirement Plan. Louis & Riparetti, Inc. ceased operations after filing for Chapter 7 bankruptcy protection on April 2, 2010.
The department’s suit alleged that Louis & Riparetti, Inc., the plan administrator, and Darrel Louis, the company’s owner and plan’s trustee, violated ERISA by failing to remit employee contributions to the retirement plan and by failing to collect mandatory prevailing-wage employer contributions owed to the plan.
In the consent judgment and order, Louis agreed to make restitution to the plan in the amount of $163,676 plus interest in installments. Upon completion of all payments, Louis will be permanently enjoined and restrained from future service as a fiduciary of, or service provider to, any ERISA-covered employee benefit plan. The consent judgment allows the department to force sale of Louis’s properties for the benefit of the plan and further requires him to name the plan as a beneficiary of his $1 million life insurance policy until all losses have been restored to the plan.
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