Mark Dell Donne, Ex-CEO, Must Repay $500k to Defunct Government Contractor's 401(k) Plan
San Clemente's Mark Dell Donne, who served as a fiduciary of the plan, already returned $98,748 to the plan's accounts and must make good on the remaining $472,235 to settle a lawsuit the federal agency brought on behalf workers.
Dell Donne lorded over defunct electrical contractor Journey Electrical Technologies Inc., which under government contract was required to deposit a specified portion of funds received from public works projects to the company's $1.9 million-strong 401(k) plan.
But an investigation by the Labor Department's Employee Benefits Security Administration determined that between January 2004 and March 2008, such funds were instead diverted into Journey's general fund. Meanwhile, employee elective 401(k) contributions and participant loan payments also were not deposited into plan accounts in violation of the Employee Retirement Income Security Act (ERISA).
The probe led to a lawsuit against Donne filed in the U.S. District Court in Fresno. Under the terms of the agreement awaiting court approval, Dell Donne is permanently barred from violating the ERISA, and he must walk away as the retirement plan trustee once an independent fiduciary is appointed to collect and pay out the assets in the plan's accounts.
"We are pleased to be able to secure these retirement funds for the company's former employees," says Phyllis C. Borzi, assistant secretary of labor for employee benefits security, in an agency statement. "Employees working on government construction or service contracts are often unaware of the benefits they are entitled to under prevailing wage laws, including fringe benefit payments to their employee benefit plans. Plan fiduciaries have a legal responsibility to ensure that this money is properly deposited in employee accounts."
The Employee Benefits Security Administration's Los Angeles office says employers and workers can call 626.229.1000 or 866.444.3272 (toll free) for assistance with problems related to private sector pension and health plans.
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