DOL Sues 2 Maryland Plan Sponsors

The Department of Labor has filed complaints against two separate plan sponsors, alleging identical fiduciary breaches.

The Department of Labor sued two separate plan sponsors in Maryland federal court on January 8, alleging seven breaches of the fiduciary duty to participants, under the Employee Retirement Income Security Act, by the defunct Jones Dykstra and Associates Inc. 401(k) Profit Sharing Plan and the defunct iProcess Online Inc. 401(k) plan.

The DOL charged the plan sponsors with breaches of their duty to operate the employer-sponsored retirement plans in the sole interest of participants, according to the separate complaints.

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Both “Defendants … did not remit all employee contributions to the plan, instead allowing the money to remain unsegregated in the company’s general operating account,” the DOL alleges.

The regulator alleges fiduciaries breached their duties—to the respective retirement plan participants—of exclusive purpose, prudence, and loyalty, and that misconduct caused both plans to enter into non-exempt, prohibited transactions and engage in self-dealing, state the separate complaints.

“Specifically, co-owners and fiduciaries Keith Jones and Bryan E. Dykstra failed to remit $43,894.76 in participant and employer contributions to the company’s 401(k) profit sharing plan,” according to a DOL press release about the Su v Jones Dykstra and Associates Inc. et al. case.  

The DOL alleged against each plan that the same retirement plan misconduct occurred during distinct periods.

For allegedly failing to remit all employee contributions to the plan, allowing the money to remain segregated in the company’s general account from 2016 through 2021, the DOL sued fiduciaries of the Jones Dykstra and Associates Inc. retirement plan. It claimed the same breach against the iProcess Online Inc. 401(k) plan from approximately 2014 through 2021, according to the separate complaints.

The complaint against iprocess did not specify how much money was allegedly not remitted on behalf of the plan.

Jones Dykstra and Associates, Inc. provided computer forensics, electronic evidence discovery, litigation support and commercial security training to commercial and government clients. Founded in 2007, the company was headquartered in Elkridge, Maryland, and established the profit-sharing plan in 2011.

Baltimore-based iProcess Online Inc. is a payroll processor that established the company’s 401(k) plan in 2009.

Jones Dykstra’s profit-sharing plan included four participants with a combined $175,941 in retirement plan assets, as of the plan’s most recent Form 5500 filing, in 2016. The iProcess Online 401(k) plan comprised 16 participants with $216,820 in retirement plan assets, as of the plan’s 2013 Form 5500.  

Neither Jones Dykstra and Associates nor iProcess Online operate working websites with contact information.

Representatives of the DOL did not comment on the lawsuits.

Jones Dykstra and iProcess Online were sued in U.S. District Court for the District of Maryland. Neither complaint included counsel for the defendants.

The recent case against iProcess is Julie A. Su v iProcess Online Inc. et al.

The DOL’s complaint was not the first time fiduciary breaches were alleged against the iProcess Online 401(k) plan, according to court documents. In 2022, former iProcess employees, including Brian Mahoney, brought a class action lawsuit against iProcess Online Chief Operating Officer Michelle Leach Bard. The lawsuit alleged that the plan failed to pay workers a portion of their earned wages plus a promised employer matching contribution into their company-sponsored 401(k) accounts.

In 2023, U.S. District Chief Judge James K. Bredar ruled in favor of Mahoney and the class of defendants, awarding $559,304 in compensatory and punitive damages.

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