UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA
December 8, 2010
HILDA L. SOLIS, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, PLAINTIFF,
BUILDING SYSTEMS TECHNOLOGY, INC., A CORPORATION; RONALD CONSTANTINO, AN INDIVIDUAL; AND THE BUILDING SYSTEMS TECHNOLOGY, INC.'S SAVING INCENTIVE MATCH PLAN FOR EMPLOYEES OF SMALL EMPLOYERS, AN EMPLOYEE PENSION BENEFIT PLAN. DEFENDANTS.
LAWRENCE BREWSTER, Regional Solicitor DANIELLE L. JABERG, Counsel for ERISA California State Bar No. 256653 NORMAN E. GARCIA, Senior Trial Attorney California State Bar No. 215626, email@example.com United States Department of Labor Office of the Solicitor 90 7th Street, Suite 3-700 San Francisco, California 94103 Telephone: (415) 625-7747 Facsimile: (415) 625-7772 Attorneys for Hilda L. Solis, Secretary of Labor, United States Department of Labor, Plaintiff
CONSENT JUDGMENT & ORDER
Plaintiff HILDA L. SOLIS, Secretary of Labor, United States Department of Labor ("Secretary") pursuant to her authority under §§ 502(a)(2) and (5) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1132(a)(2) and (5), has filed a Complaint against Defendants BUILDING SYSTEMS TECHNOLOGY, INC. ("BST"), RONALD CONSTANTINO ("Constantino"), an individual, and BUILDING SYSTEMS TECHNOLOGY, INC.'S SAVING INCENTIVE MATCH
Consent Judgment & Order
PLAN FOR EMPLOYEES OF SMALL EMPLOYERS (the "Plan" or "SIMPLE Plan"), an employee pension benefit plan.*fn1
A. The Secretary, BST, Constantino, and the Simple Plan (collectively, "the parties") admit that the Court has jurisdiction over this action pursuant to ERISA § 502(e)(1), 29 U.S.C. § 1132(e)(1), and that venue lies in the Central District of California pursuant to ERISA § 502(e)(2), 29 U.S.C. § 1132(e)(2).
B. The parties agree to the entry of this Consent Judgment & Order. The parties further agree that this Consent Judgment & Order shall fully settle all claims of the Secretary asserted in the Complaint filed in this matter.
C. Constantino, BST and the Simple Plan acknowledge receipt of the Secretary's Complaint in this action and hereby waive service of process of the Summons and Complaint.
D. All parties expressly waive Findings of Fact and Conclusions of Law. IT IS HEREBY ORDERED, ADJUDGED, and DECREED that:
1. Defendants BST and Constantino are jointly and severally liable for $15,132.06 in losses caused to the Plan as alleged in the Secretary's Complaint, and judgment is hereby entered against them in that amount.
2. Defendant Constantino shall restore $15,132.06 in Plan losses and lost-opportunity costs to the Plan.
3. Defendant Constantino shall pay $951.25 in interest for paying the $15,132.06 in Plan losses over 36 months.
4. The identified losses in Paragraph 2 and the interest in Paragraph 3 shall be restored to the Plan in accordance with the payment schedule set forth in Paragraph 7, infra.
5. Defendant Constantino is permanently enjoined and restrained from violating the provisions of Title I of ERISA, 29 U.S.C. §§ 1001-1191c.
6. Defendant Constantino is hereby permanently enjoined and restrained from future service as a fiduciary of, or service provider to, any ERISA-covered employee benefit plan.
7. Defendant Constantino shall restore to the Plan the amount of $15,132.06 in losses and pay interest as follows:
a. By December 1, 2010, Defendant Constantino shall remit $446.76 to the Plan's custodian, American Century Investment Services, Inc. ("American Century"). American Century shall allocate this $446.76 payment to the Plan's five non-fiduciary participants: Leslie Arthur, Phillip Axtell, Travis Humphries, Erik Lindell, and Raymond Ortega as identified in Exhibit A attached hereto.
b. Thereafter, beginning on January 1, 2011, Defendant Constantino shall remit thirty-five consecutive monthly payments in the amount of $446.76 to American Century for the Simple Plan. The first installment is due and payable on January 1, 2011, and the remaining installments shall be due and payable on or before the same day of each succeeding month thereafter until all installments have been paid.
The payments described are summarized as follows:
Due Date Amount Due
December 1, 2010 $446.76
January 1, 2011 $446.76 February 1, 2011 $446.76
March 1, 2011 $446.76 April 1, 2011 $446.76 May 1, 2011 $446.76 June 1, 2011 $446.76
Due Date Amount Due July 1, 2011 $446.76 August 1, 2011 $446.76 September 1, 2011 $446.76
October 1, 2011 $446.76 November 1, 2011 $446.76 December 1, 2011 $446.76
January 1, 2012 $446.76 February 1, 2012 $446.76
March 1, 2012 $446.76 April 1, 2012 $446.76 May 1, 2012 $446.76 June 1, 2012 $446.76 July 1, 2012 $446.76 August 1, 2012 $446.76 September 1, 2012 $446.76
October 1, 2012 $446.76 November 1, 2012 $446.76 December 1, 2012 $446.76
January 1, 2013 $446.76 February 1, 2013 $446.76
March 1, 2013 $446.76 April 1, 2013 $446.76 May 1, 2013 $446.76 June 1, 2013 $446.76 July 1, 2013 $446.76 August 1, 2013 $446.76
Due Date Amount Due September 1, 2013 $446.76
October 1, 2013 $446.76 November 1, 2013 $446.76
8. Within forty business days of making each payment set forth in Paragraphs 7 (a) through (b), supra, Defendant Constantino shall provide a copy of the front and back of each remittance check, or other appropriate evidence that such payment has been made, to the Regional Director.
9. Defendant Constantino hereby forfeits any interest he may have in any amounts restored to the Plan as a result of this Complaint and Consent Judgment & Order.
10. Within ten days of the Court's entry of this Consent Judgment & Order, Defendant Constantino shall provide a copy of this Consent Judgment & Order to the custodian, American Century, of the Simple Plan.
11. Upon Defendant Constantino's restoration of $15,132.06 in losses to the Plan plus the payment of $951.25 in interest, as outlined in Paragraph 7, supra, the Defendants shall be assessed a penalty under ERISA § 502(l), 29 U.S.C. § 1132(l) in the amount of twenty percent of the applicable recovery amount, or $3,216.67 ("Penalty Amount"). The Defendants waive the notice of assessment and service requirement of
29 C.F.R. § 2570.83 and, within sixty days following the last payment date outlined in Paragraph 7, supra, Defendant Constantino shall pay the Penalty Amount to the U.S. Department of Labor, by sending a certified or cashiers check payable to the United States Department of Labor (please write EBSA Case No. 72-032586(48) on the check) to:
U.S. Department of Labor ERISA Civil Penalty P.O. Box 70942 Charlotte, NC 28272-0942
For Overnight Courier (i.e., Federal Express)
U.S. Department of Labor QLP Wholesale Lockbox NC0810 Lockbox #70942 1525 West WT Harris Blvd Charlotte, NC 28262
12. The parties agree that the Secretary has the right, on an annual basis, to review Defendant Constantino's financial condition during the pendency of the payments in Paragraph 7. Should the Secretary elect this right, she will notify Defendant Constantino of this demand via first class mail addressed to Ron Constantino, 2297 Jacob Row, Lake Havasu City, AZ 86404. Within ten business days of the Secretary's written notification, Defendant Constantino shall provide a financial status declaration sworn under penalty of perjury, his latest federal tax return, and payroll wage statements for his last four pay checks to the Regional Director. If the submitted documents demonstrate that Defendant Constantino's gross income is equal to or exceeds $70,000 in a twelve-month period, the amount of the monthly payments that Constantino is required to make to the Plan in Paragraph 7 will increase from $446.76 a month to $650.00 a month until Defendant Constantino has fully restored the $15,132.06 in Plan losses and has paid all of the interest payments ($26.42 a month) associated with his installment payments. Defendant Constantino will not be required to make this increased payment until twenty days after receiving written notification from the Secretary that he is required to increase his monthly payment from $446.76 a month to $650.00 a month. Should Defendant Constantino change his residence address during the pendency of the payments specified in Paragraphs 7 and 11, he shall notify the Regional Director, in writing, within ten days of changing his address.
13. Whenever a submission is required to be made to the Regional Director under the terms of this Consent Judgment & Order, such submission shall be made to:
U.S. Department of Labor Employee Benefits Security Administration 1055 E. Colorado Blvd., Suite 200 Pasadena, CA 91106-2357 Telephone number: (626) 229-1000 Facsimile number: (626) 229-1098
14. In the event of default by Defendant Constantino in the payment of any of the monthly installments identified in Paragraph 7, supra, the total balance remaining unpaid shall then become due and payable within ten days of the default and interest shall be assessed against such remaining unpaid balance at the rate provided by 28 U.S.C. § 1961 from the date of this judgment until the total amount is paid in full.
15. Defendant Constantino expressly waive any and all claims of any nature which they have or may have against the Secretary, the Department of Labor, or any of its officers, agents, attorneys, employees or representatives, arising out of or in connection with the allegations contained in the Complaint on file in this action, any other proceedings or investigation incident thereto or based on the Equal Access to Justice Act, as amended.
16. The Secretary and all Defendants shall each bear their own costs, expenses, and attorneys' fees incurred to date in connection with any stage of this proceeding, including but not limited to attorneys' fees which may be available under the Equal Access to Justice Act, as amended.
17. Nothing in this Consent Judgment & Order is binding on any governmental agency other than the United States Department of Labor, Employee Benefits Security Administration.
18. This Court retains jurisdiction of this action for purposes of enforcing compliance with the terms of this Consent Judgment & Order.
19. By signing their names to this Consent Judgment & Order, the parties represent that they are informed and understand the effect and purpose of this Consent Judgment & Order.
20. This Consent Judgment & Order may be executed in counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same instrument.
The Court directs the entry of this Consent Judgment & Order as a final order.
IT IS SO ORDERED.
United States District Judge
Entry of this Consent Judgment & Order is hereby consented to:
Dated: ________________ M. PATRICIA SMITH
Solicitor of Labor
BUILDING SYSTEMS TECHNOLOGY, INC. Ronald Constantino, President
BUILDING SYSTEMS TECHNOLOGY,
INC.' SAVING INCENTIVE MATCH PLAN FOR EMPLOYEES OF SMALL EMPLOYERS Ronald Constantino, President of Building Systems Technology, Inc.
Exhibit A -- American Century's Allocation of $446.76 Payments
Employee name Amount of $446.76 to be allocated to employee
Leslie Arthur $77.17
Phillip Axtell $93.08
Travis Humphries $4.69
Erik Lindell $160.78
Raymond Ortega $111.04