Archived News Release — Caution: Information may be out of date.
Chicago, Illinois - The U.S. Department of Labor has sued Arlington Heights, Illinois-based Atlas Lock & Key, Inc. and its officers on June 28 for failing to forward $9,816.52 in employee contributions to the company’s 401(k) salary reduction plan.
“By this action, the department is reaffirming its commitment to protect the hard-earned benefits promised to employees," said Kenneth Bazar, director of the department’s Chicago regional office of the Pension and Welfare Benefits Administration, which investigated the case.
The department’s complaint, filed in federal district court in Chicago, alleges that plan trustees Larry Brodacz and Rene Brodacz, who served Atlas as company president and vice president, respectively, failed to forward to the plan contributions withheld from employees’ paychecks from Dec. 26, 1998 to May 29, 1999. They allegedly used the money for the company’s benefit. They also allegedly failed to secure a proper bond as required by the Employee Retirement Income Security Act (ERISA). Larry Brodacz also improperly served as a plan official. He was incarcerated from Jan. 18, 2000 to approximately Oct. 11, 2000, for credit card fraud.
Atlas ceased doing business in 2000 soon after Larry Brodacz’s incarceration. As of Dec. 31, 1999, the plan had seven participants and assets totaling $20,494.
In its suit, the department is seeking restoration of the plan’s losses, plus interest, and the waiver of the defendants’ individual accounts in the plan if they are not otherwise able to restore the losses to the plan. The department also is asking a permanent bar of Atlas, Larry Brodacz and Rene Brodacz from serving any ERISA covered plan, the appointment of an independent fiduciary to manage and terminate the plan, and the purchase of a fidelity bond.
Bazar noted that employers with similar problems, who are not yet the subject of an investigation by PWBA, may be eligible to participate in the Department's Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP requires employers to make workers whole but allows them to avoid government enforcement actions and civil penalties as well as any applicable excise taxes.
"The VFCP program gives plan sponsors a way to come into compliance with ERISA by restoring workers' benefits while avoiding an investigation by the government," said Bazar. "It protects workers' health and retirement benefits and allows us to focus our resources on those who seek to avoid compliance." Employers and workers can contact the regional office at 312.353.0900 or PWBA’s Toll-Free Employee & Employer Hotline number, 1.866.275.7922 for help with problems relating to private-sector pension and health plans.
(Chao v. Atlas Lock & Key, Inc.
Civil Action # 02-C-4666) U.S. Department of Labor news releases are accessible on the Internet. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the Central Office for Assistive Services and Technology. Please specify which news release when placing your request. Call 202.693.7773 or TTY 202.693.7775.
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