The U.S. Department of Labor has asked a federal court to hold the fiduciaries of a Chicago welfare fund liable for $2.8 million in losses after they allowed funds to be misappropriated.
The Labor Department investigation found that the United Employee Benefit Fund’s fiduciaries and counsel committed multiple violations of the Employee Retirement Income Security Act between 2015 and 2018. The department seeks to recover the losses with interest, to bar the fiduciaries and counsel permanently from serving as fiduciaries and service providers to employee benefit plans and to appoint an independent fiduciary to take over the administration of the fund.
“The fiduciaries of the United Employee Benefit Fund and its counsel’s alleged violations of the Employee Retirement Income Security Act harmed the United Employee Benefit Fund’s financial security impacting the benefits promised to fund participants nationwide,” Employee Benefits Security Administration Deputy Regional Director Kelli Hammerl said in a news release from the Department of Labor’s Chicago office.
The department’s complaint alleged violations by trustee Gary Meyers, trustee John Fernandez, administrator David Fensler and trustee and service provider Herbert McDowell, as well as his company, United Preferred Companies Ltd. The complaint also named fund counsel L. Steven Platt, who was employed by the Chicago law firm Robbins, Salomon & Patt Ltd.
Labor Department officials said it would pursue enforcement through federal court to compel the fiduciaries to cooperate with its investigation and determine whether the violations occurred.
The United Employee Benefit Fund provides life insurance benefits to about 63 employer-sponsored benefit plans nationwide.
