By Paula Aven Gladych
The Department of Labor
has settled a lawsuit with the trustees of a defunct New York City garment company over $4.2 million in alleged unlawful plan transactions.
Colette Mordo, trustee and fiduciary to the pension plans of Sadimara Knitwear Inc. and Stallion Knits Ltd., agreed to restore those funds and any shortfall in assets owed to the plans’ participants and beneficiaries.
The lawsuit alleged that Mordo violated her fiduciary duties under ERISA because she authorized the pension plans
to make improper loans and transfers of plan assets over several years to multiple recipients, including members of her family and two companies in which she has an ownership interest, International Design Concepts LLC and Apparel Group International LLC.
"If you've been entrusted with the assets of an employee benefit plan, it's illegal to enrich yourself or your family at the plan's expense," said Assistant Secretary of Labor for Employee Benefits Security Phyllis Borzi. "That's not just common sense; it's the law, and the Labor Department will not hesitate to investigate and pursue appropriate legal remedies whenever fiduciaries fail to meet this standard."
The judgment removes Mordo from any and all fiduciary positions with respect to the plans and permanently bars her from serving as a fiduciary to any ERISA
-covered plan. It also appoints David M. Lipkin of Metro Benefits Inc. as the independent fiduciary who will administer the plans, determine and pay out benefits to participants, and terminate the plans. The Labor Department is authorized to seek a contempt order should Mordo violate any terms of the judgment.
Originally published on BenefitsPro.com