The U.S. Department of Labor has received a summary judgment ordering the defunct West Chester, Pa.-based Compass Capital Partners Ltd. and owner, Harris M. DeWese, to restore $661,206 to the company's retirement plan.
The judgment puts an end to a lawsuit filed by the DOL in August 2011 that cited violations of the Employee Retirement Income Security Act.
The suit came after an investigation by the DOL's Employee Benefits Security Administration, which discovered DeWese withdrew plan funds eight times between October 2006 and October 2007, and then deposited them into his personal account as well as a Compass Capital Partners bank account. Those funds were used by DeWese to pay the company's operating expenses, and a portion was transferred to Tampa, Fla.-based Hillsboro Printing, a company in which DeWese was a shareholder. Compass Capital Partners has since terminated operations, and the plan could not pay benefits to retired participants because of DeWese's actions.
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"These actions show a flagrant breach of fiduciary responsibility," says Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. "We will continue to hold plan sponsors and other responsible parties accountable when they fall short of their legal obligation to protect the hard-earned savings of plan participants."
The judgment, filed in the U.S. District Court for the Eastern District of Pennsylvania, removes DeWese and Compass as plan fiduciaries and permanently forbids them from acting as fiduciaries for any ERISA-covered plan. Metro Benefits Inc. of Pittsburgh is now the independent fiduciary authorized to terminate the plan.
EBSA is responsible for protecting the security of the retirement, health and other work-related benefits for employees, retirees and their families and oversees about 708,000 private-sector retirement plans and 2.8 million health plans as well as other plans that provide benefits to more than 150 million Americans. In total, these plans are worth more than $6 trillion in assets.
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