A DoL news release said that Plan 3 Inc., Plan 3 Technologies Inc., and the companies’ owner, Dennis Kelly provided services for approximately 25 health and welfare plans covering 1,000 workers.
The federal court restraining order was issued in response to a DoL lawsuit against the Plan 3 defendants claiming they violated the Employee Retirement Income Security Act (ERISA) by failing to properly administer the plans.
The lawsuit alleged that the defendants failed to put the plans’ assets in trust and co-mingled plan monies with corporate assets, putting the assets at risk of garnishment by creditors of the corporations. It also claimed that Kelly and the other Plan 3 defendants improperly sold more than $370,000 in receivables of some plans as a means of raising corporate capital.
The restraining order remains in effect until a July 7 hearing.