The DOL has filed a lawsuit, Perez v. Snyder et al (civil action number 1:13-cv-02474-CAB), in the U.S. District Court for the Northern District of Ohio, Eastern Division in Cleveland. Filed on behalf of participants of the Attevo 401(k) retirement plan, the suit alleges improper use of plan funds and seeks restoration of $123,338.85 to the plan.
An investigation by the DOL’s Employee Benefits Security Administration (EBSA) found the plan’s fiduciaries failed to remit participant contributions and loan repayments, withheld from paychecks, to the retirement plan, in violation of the Employee Retirement Income Security Act (ERISA).
The suit names as defendants Cirric Inc., as the successor to Averrock Inc. and Attevo Inc., and its sister company, Ruralogic Inc., fiduciaries to the Attevo 401(k) retirement plan, along with two of the companies’ owners, C. David Snyder and Joseph Burmester.
Snyder and Cirric Inc. allegedly failed to remit $68,439.14 in participant contributions and participant loan repayments that were withheld from the paychecks of Cirric Inc.’s employees to the plan from January 31, 2009 to July 2, 2012. Burmester and Ruralogic Inc. allegedly failed to remit $54,899.71 in participant contributions that were withheld from the paychecks of Ruralogic Inc.’s employees to the plan from July 31, 2010 to June 29, 2012.
The EBSA found that from January 1, 2009, to July 2, 2012, Snyder, Burmester, Cirric Inc., and Ruralogic Inc. failed to timely remit participant contributions and participant loan repayments to the plan. In addition, the complaint alleges that Cirric Inc. failed to administer the participant loan program, resulting in a defaulted participant loan. Finally, Cirric Inc. also failed to maintain a fidelity bond.
The suit by the DOL seeks the restoration of losses to the plan, including the $123,338.85 in unremitted participant contributions and participant loan repayments, plus lost opportunity costs. The DOL is also asking the court to permanently bar Snyder and Burmester from serving as fiduciaries or service providers to any ERISA-covered employee benefit plan, with a request that the court appoint an independent fiduciary to terminate the plan.
According to the DOL, the plan had 24 participants and $379,424.20 in assets as of August 13, 2013.