Date of action: Nov. 12, 2015 Type of action: Default Judgment Name of defendant: Lance Silva, National Upholstering Company Inc.
Allegations: Lance Silva was the former owner of National Upholstering Company Inc., which sponsored a 401(k) plan for its employees, with Silva serving as trustee. A U.S. Labor Department investigation found that Silva abused his position as trustee to misappropriate funds from participant accounts for his own benefit. In September and November of 2011, Silva improperly caused Fidelity Investments to distribute more than $40,000 from four other participant’s accounts to himself, without authorization. In addition, after the company ceased operations in 2010, the defendants failed to take proper steps to ensure that plan participants received distributions of the account balances. In a complaint filed on April 20, 2015, the department alleged that these activities violated the Employee Retirement Income Security Act.
Resolution: On Nov. 12, 2015, the court ordered Silva to restore all losses, including lost opportunity costs, to the 401(k) Plan, removing Silva as a fiduciary, and appointing Metro Benefits Inc. as independent fiduciary to assume responsibility and authority collect, liquidate, and manage the Plan’s assets, and to distribute the remaining $270,000 to eligible participants and beneficiaries entitled to receive such assets. Finally, the judgment bars Silva from serving as a fiduciary or service provider to any ERISA-covered employee benefit plan in the future.
Court: United States District Court for the Northern District of California Case Number: 15-cv-01771-EMC U.S. Department of Labor news materials are accessible at www.dol.gov. The department’s Reasonable Accommodation Resource Center converts departmental information and documents into alternative formats, which include Braille and large print. For alternative format requests, please contact the department at (202) 693-7828 (voice) or (800) 877-8339 (federal relay).
