DoL Sues Company for Failure to Remit Contributions

February 7, 2012 ( – The U.S. Department of Labor (DoL) filed a lawsuit against Towson Rehabilitation Center LLC and CEO Howard Neels for failing to remit employees’ contributions to the company’s 401(k) plan. 

The suit resulted from an investigation by the Washington District Office of the DoL’s Employee Benefits Security Administration (EBSA), which found that, since January 2006, the defendants have failed to remit employee contributions to the plan, remitted certain employee contributions late without interest and failed to segregate the plan’s assets from the general assets of the company.

“This case clearly demonstrates a breach of fiduciary duty,” said Norman Jackson, EBSA’s acting regional director in Philadelphia. “We will hold fiduciaries accountable when they fail to act in the best interest of plan participants.” 

Filed in the U.S. District Court for the District of Maryland, the suit seeks to restore to the plan all losses, including interest and opportunity costs, as well as the cost of an independent fiduciary. The suit also seeks to permanently bar the defendants from serving in a fiduciary capacity to any employee benefit plan covered by ERISA, and appoint an independent fiduciary with plenary authority and control with respect to the management and administration of the plan.

The case is Solis v. Towson Rehabilitation Center LLC et al.
No: 1:12-cv-00117-JKB.