DOL Sues Medical Practice for 401(k) Contributions

In 1998, PDCCA, owned by David O. Nyanjom, established the Pulmonary Disease & Critical Care Associates, P.A. 401(k) plan for its employees. Employees of Patuxent Hospitalists LLC, also owned by Nyanjom, also participated in the plan. PDCCA and David and Laura Nyanjom were plan fiduciaries, responsible for making decisions concerning the remittance of elective contributions to the plan.

An investigation conducted by the DOL’s Employee Benefits Security Administration found that between November 24, 2006, and April 16, 2012, PDCCA and David and Laura Nyanjom failed to ensure employee contributions and plan loan repayments were remitted and collected by the plan in a timely manner. The investigation determined employee deductions representing voluntary contributions and loan repayments for employees of PDCCA and Patuxent Hospitalists, LLC to the plan, totaling $103,629.94 plus interest, were not remitted.

The complaint seeks restitution to the plan of delinquent employee contributions and loan repayments, including: lost opportunity costs; the appointment of an independent fiduciary to administer or terminate the plan; an order requiring the plan to set off any individual account balances of David and Laura Nyanjom against the amount of losses, including interest or lost opportunity costs and the costs of the independent fiduciary, resulting from their fiduciary breaches; and an injunction barring the defendants from serving as fiduciaries to any ERISA-covered plans.

The complaint was filed in the U.S. District Court for the District of Maryland; case no. 1:13-cv-01909-CCB.