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Release Date: 10/18/2004
Release Number: 04-2036-KAN
Contact Name: Gloria Della
Phone Number: 202.693.8664
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Kansas City, Kansas - The U.S. Department of
Labor has sued the owners of defunct Gazlay Marketing Group, Inc. of
Kansas City, Kansas, for failure to forward $23,205.96 in employee
contributions and loan repayments to the company’s 401(k) plan. |
“Trustees
of a 401(k) plan have a responsibility to ensure that the assets of the
plan are used solely to benefit participants,” said Steven Eischen,
director of the department’s Kansas City regional office of the Employee
Benefits Security Administration (EBSA). “One of the most important
responsibilities is putting money from workers’ wages into their 401(k)
accounts on time.” |
The
department’s lawsuit alleges that Raymond Flatt and his wife, Theresa
Flatt, failed to forward employee withholdings and loan repayments to the
plan’s account from July 2002 to April 2003. The Flatts served as the
401(k) trustees at the time of the alleged violations of the Employee
Retirement Income Security Act (ERISA). |
As
relief, the suit seeks to require that the defendants restore all losses
with interest and undo any transactions prohibited by ERISA. The
department also asks the court to permanently bar the defendants from
service to any ERISA-covered plan in the future. The case, investigated by
EBSA’s Kansas City regional office, was filed in federal district court
in Kansas City, Kansas. |
Gazlay Marketing, a printing company until it ceased
business operations, sponsored the plan for 27 participants. The Flatts
owned Gazlay Marketing and Direct Digital Design Inc., which filed for
Chapter 7 bankruptcy on November 12, 2003. |
Employers
with similar problems who are not yet the subject of an investigation by
EBSA 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 EBSA enforcement
actions and civil penalties as well as any applicable excise taxes. For
more information about the VFCP, see www.dol.gov/ebsa. |
In
fiscal year 2003, EBSA achieved record monetary results of $1.4 billion
related to the pension, 401(k), health and other benefits of millions of
American workers and their families. Employers and workers can reach
EBSA’s Kansas City regional office at 816.426.5131, for help with
problems relating to private-sector retirement and health plans. |
(Chao
v. Flatt)
Civil Action No. 2:04-cv-2512 |
U.S.
Labor Department news releases are accessible on the Internet at
www.dol.gov. The information in this news release will be made available
in alternate format upon request (large print, Braille, audio tape or
disc) from the COAST office. Please specify which news release when
placing your request at 202.693.7765 or TTY 202.693.7755. The U.S.
Department of Labor is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit
www.dol.gov/compliance. |