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Fiduciary of two ESOPs agrees to pay back misappropriated funds

A trustee of the Gagne Precast Concrete Products Inc. Employee Stock Ownership Plan has agreed to restore $225,000 to the ESOP and take other corrective action to resolve a lawsuit filed by the U.S. Department of Labor.

By Paula Aven Gladych | Updated on January 03, 2012

A trustee of the Gagne Precast Concrete Products Inc. Employee Stock Ownership Plan has agreed to restore $225,000 to the ESOP and take other corrective action to resolve a lawsuit filed by the U.S. Department of Labor. The suit alleged that Stephen Thomas individually and as a trustee for the plan violated the Employee Retirement Income Security Act.

The department filed suit against Thomas regarding the Gagne ESOP in the U.S. District Court for the Middle District of Pennsylvania in February 2011, following an investigation by the Boston Regional Office of the department’s Employee Benefits Security Administration. The investigation found that Thomas violated his fiduciary duty by misappropriating or improperly diverting plan assets. He also was asked to pay back $75,000 to the Frank L. Woodworth Inc. Employee Stock Ownership Plan, for which he also was a trustee.

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