The lawsuit, Perez v. Hathaway (civil action number: 1:13-cv-03253-WMN), was filed by the DOL in the U.S. District Court for the District of Maryland. Named in the suit is William Kristen Hathaway, the former CEO of Baltimore Behavioral Health Inc. and fiduciary to the company’s retirement plan. Hathaway is accused of failing to remit employee contributions, which violates the Employee Retirement Income Security Act (ERISA).
The suit came about as the result of an investigation by the DOL’s Employee Benefits Security Administration (EBSA). The EBSA investigation found that from October 2009 to April 2010, Hathaway failed to remit employee contributions to the plan, remitted certain employee contributions late without interest and failed to segregate the plan’s assets from the general assets of the company. Hathaway has been investigated as far back as 2011 (see “Health Clinic Sued over Missing 403(b) Contributions” and “Health Clinic Sued for Withholding Retirement Plan Records”).
The DOL is seeking to have all plan losses restored, which includes interest and opportunity costs. The DOL suit also seeks to have an independent fiduciary appointed to the plan, with the authority to manage and administer it. Finally, the suit seeks to permanently bar Hathaway from serving in a fiduciary capacity to any employee benefit plan covered by ERISA and to cover the cost of the independent fiduciary.