The Department of Labor has settled a lawsuit with the trusteesof a defunct New York City garment company over $4.2 million inalleged unlawful plan transactions.

|

Colette Mordo, trustee and fiduciary to the pension plans ofSadimara Knitwear Inc. and Stallion Knits Ltd., agreed to restorethose funds and any shortfall in assets owed to the plans’participants and beneficiaries.

|

The lawsuit alleged that Mordo violated her fiduciary dutiesunder ERISA because she authorized the pension plans to makeimproper loans and transfers of plan assets over several years tomultiple recipients, including members of her family and twocompanies in which she has an ownership interest, InternationalDesign Concepts LLC and Apparel Group International LLC.

|

"If you've been entrusted with the assets of an employee benefitplan, it's illegal to enrich yourself or your family at the plan'sexpense," said Assistant Secretary of Labor for Employee BenefitsSecurity Phyllis Borzi. "That's not just common sense; it's thelaw, and the Labor Department will not hesitate to investigate andpursue appropriate legal remedies whenever fiduciaries fail to meetthis standard."

|

The judgment removes Mordo from any and all fiduciary positionswith respect to the plans and permanently bars her from serving asa fiduciary to any ERISA-covered plan. It also appoints David M.Lipkin of Metro Benefits Inc. as the independent fiduciary who willadminister the plans, determine and pay out benefits toparticipants, and terminate the plans. The Labor Department isauthorized to seek a contempt order should Mordo violate any termsof the judgment.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.