On May 20, the U.S. Dept. of Labor won a consent order and judgement in which four trustees of a Portage, Indiana, union agreed to repay nearly $500,000 to the pension plan they ran. The trustees, Andre Joseph, Raymond Sierra, David Lynch and Edward Rentz, resigned from the pension and welfare plan of Local 1969 of the Intl. Longshoremen’s Assn, and are permanently barred by the order from serving on any benefit plan. Yet all four still serve as officials and agents of either the local or intl. unions.
“The trustees violated one of the most fundamental rules of ERISA, [The Employment Retirement Income Security Act] that assets of employee benefit plans may be used only to pay benefits and legitimate plan expenses,” said Secretary of Labor Elaine Chao.
In the suit, first filed May 22, 2002, DOL charged that the trustees authorized $3.475 million in loans to parties-in-interest Michael A. Daher and John S. Dunsmoor, who had power of attorney over the pension plan account. Daher and Dunsmoor co-owned Qualified Investment Ltd., a Nevada corporation through which they purchased a residential development and other undeveloped property in Mesquite, Nev. According to DOL, the price paid by the union trustees was highly inflated. In addition, DOL accused the trustees of paying Dunsmoor over $10,000 in legal fees to recover what Dunsmoor, who wasn’t licensed to practice law, claimed were misspent funds. Finally, DOL charged that the trustees paid for union and other non-plan expenses from the benefit fund.
Dunsmoor had already been ordered to repay over $1 million to the employee benefit plan, while Daher was ordered to repay over $1.6 million. In the May 20 order, the four union trustees agreed to repay $497,225. DOL spokeswoman Sharon Morrissey would not say whether the four union officials will join Daher and Dunsmoor, who have already pled guilty to criminal violations in connection with the Nev. investments. [DOL, 5/27/03: Northwest Indiana Times, 5/29/03]