DOL Wins Ruling Replacing Officials of New York Union Plan

Former administrators of the Intl. Bhd. of Industrial Wrkrs.’ Health and Welfare Fund of Central Islip, NY, are permanently barred from serving plans governed by federal employee benefits law, according to a court decision announced Oct. 8 by the U.S. Dept. of Labor. The fed. court also appointed an independent fiduciary to terminate the fund, resolve participant claims and distribute plan assets.


“Individuals entrusted with the assets of employee benefit plans have a serious responsibility, and this Administration will take action to protect workers, as in this case, the International Brotherhood of Industrial Workers’, whose funds have been mismanaged,” said Labor Secy. Elaine L. Chao. “The Department of Labor will vigorously pursue violations to restore plan assets and to safeguard the health benefits of workers and their families.”


The decision, entered in federal district court in Central Islip on Aug. 21, resolves a lawsuit against Joseph Merino and Sandra Briand for violating the Employee Retirement Income Security Act (ERISA).  The defendants allegedly hired Clarke Lasky as an employer representative to manage the BIW fund — despite knowledge of his conviction for embezzling money from another employee benefit plan — and extended credit to him so he could continue to administer the fund after he failed to remit employee contributions.  Lasky, who was charged with embezzling health benefit funds, pled guilty in January 1998. He was subsequently sentenced to 27 months in prison.


BIW fund’s trustees Donald Gancio and Helen Williams previously agreed to consent agreements permanently barring them from serving as fiduciaries or service providers to any employee benefit plan governed by federal employee benefits law. The settlement agreement provides for the immediate entry of a judgment for $352,271 against Gancio.


The BIW fund was established under a collective bargaining agreement with BIW locals 119 and 835, sanitation workers, and employers.  From 1972-1994, the fund provided accident, health care, dental and visual benefits to approximately 1,000 employees in Arizona, Florida, New Jersey, New York and Pennsylvania. The BIW union formally ceased operations in May 1996.  The case was investigated by DOL’s Employee Benefit Security Administration’s regional office in New York. [EBSA, Chao v. Joseph Merino, Civil Action No. CV 98-2041 (ARL)]