DoL Sues Medical Group, Trustees, and Accountant for Misusing Plan Assets

Filed in U.S. District Court for the Northern District of Florida, the lawsuit alleges that Caputo, as a trustee to the plan, used plan assets as if they were his personal property between 2000 and 2006.  According to the suit, the Employee Benefits Security Administration found that 97% of the plan’s assets were listed as receivables, but were actually personal expenses and loans.  

A press release said the DoL alleges that the defendants violated the Employee Retirement Income Security Act (ERISA) by allowing the plan to purchase stock from participants at inflated prices, failing to allow older workers to diversify their account balance as required by law, and allowing the plan to engage in a number of recordkeeping errors.  The department contends the misuse of the company’s assets reduced the value of the company, which was owned by the employee stock ownership plan, and the fiduciaries failed to take the necessary corrective actions.  

According to the suit, trustee Glenn Bankert failed to take action to remedy Caputo’s misuse of company funds. Additionally, the DoL said Oden and Thielking, an accounting firm located in West Des Moines, Iowa, that annually valued the company’s stock, allegedly knew or should have known that the price of the stock was inflated.   

The suit seeks a court order requiring the defendants to restore to the plan all losses with lost interest or opportunity costs, offset individual plan accounts of the defendants for losses owed to this plan, remove them as fiduciaries to the plan and permanently bar them from serving in a fiduciary capacity to any plan subject to ERISA. The DoL also is seeking the appointment of an independent fiduciary to oversee the plan.