>The order also instructs the trustees to restore $497,225.83 to the plans and resign their positions. This is the latest in a series of investments involving John Sherwood Dunsmoor who received an 18 month prison sentence after being found guilty of embezzling more than $1.7 million form the fund, according to a news release.
>In the earlier case, Dunsmoor admitted to misrepresenting himself as an investment advisor and attorney, convincing the ILA to invest in a development in Nevada at inflated prices. He later told the union they had been defrauded in the deal, charging for legal services he was not licensed to give (See Man Convicted For “Shorting” Longshoreman’s ).
The most recent judgment against the plan trustees comes for allegedly authorizing multiple payments to Dunsmoor. “These trustees violated one of the most fundamental rules of ERISA, that assets of employee benefit plans may be used only to pay benefits and legitimate plan expenses,” said Secretary of Labor Elaine Chao. “This case demonstrates that the department will aggressively pursue violations of the law to protect the rights of workers and their families.”