Compliance February 16, 2005

Judge Orders DC Insurance Broker to Repay nearly $1M to Clients

February 16, 2005 (PLANSPONSOR.com) - A federal judge has ordered a Washington, DC-based insurance broker to repay $955,515 to its employee benefit plan clients - money the court said was illegally diverted into the company's general bank accounts.
Reported by

>A US Department of Labor (DoL) news release said the court judgment against A&D Insurance and its president Brittian Day, covered money that was intended to have purchased insurance for the 27 health plans. Instead of actually buying policies, the DoL alleged that A&D kept the money and gave clients dummy policy documents.

>The judgment, entered in the federal district court in Washington, DC, resulted from a 2002 lawsuit filed by the DoL.

>The plans include:

  • the pension, annuity, health and vacation funds of Ironworkers Local Union No. 16
  • the pension, health and welfare, and vacation funds of Bricklayers and Allied Craftsmen Local No. 1 of Maryland, Virginia, and the District of Columbia-Baltimore Chapter
  • Bricklayers and Allied Craftsmen Local No. 1 Pension Fund of Virginia
  • Bricklayers and Stonemasons Local No. 2 Pension Fund of Norfolk, Virginia and Welfare Fund of Norfolk, Virginia
  • Iron Workers Local Union No. 5 and Iron Workers Employers Association Employees’ Pension Fund
  • Iron Workers Trust Fund Local Union No. 5
  • Iron Workers Local Union No. 5 and Iron Workers Employers Association Apprenticeship Fund
  • the pension, welfare and individual account funds of the Marble Tile & Terrazzo Workers
  • International Union of Painters and Allied Trades District Council 51 Health & Welfare Fund
  • Washington Area Carpenters Pension & Retirement Fund
  • Mid-Atlantic Regional Council of Carpenters’ Health Fund
  • the pension and health and welfare trust funds of Beverage and Brewery Drivers Local No. 67
  • Criss Brothers, Inc./Shopmen’s Local Union No. 486 Retirement Trust Fund
  • the pension, welfare, vacation and apprentice funds of Rodman Local
  • the legal services, pension and welfare funds of the Warehouse Employees Union Local No. 730 & Contributing Companies.

>In August 2004, Day was indicted for embezzlement of plan assets and mail and wire fraud connected to the scheme .  If convicted of the charges, Day faces up to 20 years on each of the mail fraud counts and 10 years each on the wire fraud and theft counts.

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