The U.S. Department of Labor has filed a complaint against Jacob Frydman, the principal of the now-defunct iBuilt LLC, and the company's group health plan. The action was taken on September 22, 2024, in the U.S. District Court for the Southern District of New York.
An investigation by the Employee Benefits Security Administration revealed that from March to June 2021, Frydman failed to forward money withheld from employee paychecks to the company’s health insurance plan and did not collect funding owed by iBuilt LLC. These actions were found to be in violation of the Employee Retirement Income Security Act (ERISA). Consequently, United HealthCare Services Inc. canceled iBuilt's health plan on June 11, 2021, retroactively effective from March 1, 2021. Employees were not informed about these issues and believed they still had coverage. As a result, their health claims remain unpaid.
The Department of Labor's complaint seeks several forms of relief: removing Frydman as fiduciary of the plan, appointing an independent fiduciary to pay employee health claims, and ordering Frydman to restore all losses to the plan and fund claims incurred during its operation.
“The law requires fiduciaries to always act in the best interest of plan participants and beneficiaries. When they fall short of this obligation, the U.S. Department of Labor will use all available tools to hold them legally accountable,” said Regional Solicitor of Labor Jeffrey Rogoff in New York.
iBuilt LLC was a modular building manufacturer based in Berwick, Pennsylvania before it became defunct.
Su v. Frydman et al., Case Number: 1:24-cv-07170
