The Department of Labor has sued ChimesDistrict of Columbia, Inc., affiliated companies, companyexecutives and employee benefit plan service providers, saying thatan employee benefit plan sponsored by Chimes DC forked overmillions in excessive fees.

The nonprofit Chimes DC employs disabled workers who providejanitorial and custodial services under multiple taxpayer-fundedgovernment contracts.

DOL said that an investigation by its Employee Benefits SecurityAdministration found that Chimes DC, its parent company ChimesInternational and executives Martin Lampner and Albert Bussoneviolated the Employee Retirement Income Security Act by getting aChimes DC health and welfare plan to pay millions in excessivefees—some to the plan’s third-party administrator, FCE BenefitsAdministrators, Inc. and some to another company, BenefitsConsulting Group.

In a statement, FCE attorney Robert Eassa said, "The allegationsraised in the complaint are without merit, and we are deeplydisappointed that the DOL included FCE in its complaint against TheChimes. The DOL’s claims center on The Chimes Health andWelfare Benefit Plan (the Plan) and the governance of thePlan. FCE was never involved in the governance of thePlan. FCE simply served as the third party administrator forthe Plan. The complaint challenges the compensation paid toFCE as well as the charitable contributions made by FCE to TheChimes’s philanthropic causes. All compensation received byFCE was pursuant to a written contract signed by The Chimes. In fact, the compensation FCE received was at or below theapplicable market rate. FCE made charitable contributions, atThe Chimes’s request, strictly to support their charitable programsthat provide valuable community services for disabledpersons. FCE’s motivation in making the donations was solelyto benefit the disabled individuals who were the charity’sbeneficiaries. The DOL never contacted any member of the FCEmanagement team or a single FCE employee to discover accurateinformation. If it had, we feel certain FCE would not be partof this complaint. The DOL’s failure to conduct a properinvestigation, with respect to our company, is regrettable and itsattacks on our character are unfair, unreasonable andunfounded. FCE has full confidence that this matter will beresolved expeditiously and in its favor."

The DOL says not only did principal owners Gary Beckman andStephen Porter know that FCE caused the plan to engage intransactions for their own benefit, FCE also exercised control overthe plan’s contracts with other service providers to boost FCE’scompensation through undisclosed commissions and fees.

Bussone and Lampner solicited hundreds of thousands of dollarsfrom FCE and BCG, asking for the money ostensibly as donations toThe Chimes Foundation, a charitable fundraising arm of ChimesInternational LTD.

FCE and BCG jointly pledged $330,000 to the foundation in 2009,and in the pledge noted that an “additional $55,000 will be paidfor a one-year option of continuing benefit services to our Chimespartner.”

Between 2009 and 2014, FCE paid more than $400,000 to The ChimesFoundation while BCG paid at least $282,500. Lampner also got FCEto employ his child, and BCG’s owner provided discounts to ChimesDC on other nonplan work.

In connection with the payoffs and other favors granted topeople and entities associated with Chimes International, FCE andBCG were illegally retained as service providers for the health andwelfare plan. As a result, FCE, Porter, Beckman, BCG and Ramsey areliable for profits earned.

FCE also got rebates, commissions, and other payments from theplan’s trustee, as well as the plan’s providers of variousservices, including stop-loss insurance, prescription drugbenefits, behavioral health and employee assistance programs, andservices related to medical benefits.

Chimes DC and FCE had agreed that most commissions or rebatespaid by plan service providers to FCE should be forwarded to theplan, but DOL said that FCE kept payments, lying to Chimes DC abouthaving sent them to the plan.

In addition to asking that all defendants account for profitsand disgorge those from fiduciary breaches (or participation inthose breaches) and prohibited transactions, the DOL is asking forChimes and FCE defendants to restore any losses to the plan.

It also seeks the removal of FCE, Beckman, Porter, Bussone,Lampner, BCG, and Ramsey as fiduciaries or service providers forany ERISA-covered plan sponsored by Chimes International LTD;permanent bars against FCE, Bussone, Lampner, BCG and Ramsey actingas fiduciaries or service providers for any plan covered by ERISA;and the appointment of an independent fiduciary to manage theChimes DC Plan.