IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA
August 26, 2011
HILDA L. SOLIS, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, PLAINTIFF,
SHANNON LESLIE STUART, AN INDIVIDUAL; STEVEN JOHN SCHMITZ, AN INDIVIDUAL; AND S.J. BURKHARDT, INC. EMPLOYEES' PROFIT SHARING PLAN, AN EMPLOYEE BENEFIT PLAN, DEFENDANTS.
CONSENT JUDGMENT & ORDER AGAINST DEFENDANT STEVEN JOHN SCHMITZ
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 SHANNON LESLIE STUART, an individual, STEVEN JOHN SCHMITZ, an individual, and S.J. BURKHARDT, INC. EMPLOYEES' PROFIT SHARING PLAN, an employee benefit plan.
A. The Secretary and DEFENDANT STEVEN JOHN SCHMITZ ("Defendant Schmitz") (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 Against Defendant Steven John Schmitz ("Consent Judgment & Order"). The parties further agree that this Consent Judgment & Order shall fully settle all claims of the Secretary asserted in the Complaint against Defendant Schmitz, filed in this matter.
C. The parties expressly waive Findings of Fact and Conclusions of Law.
IT IS HEREBY ORDERED, ADJUDGED, and DECREED that: 1. Defendant Schmitz is liable for $86,421.14 in losses and lost-opportunity costs caused to the Plan as alleged in the Secretary's Complaint, and judgment is hereby entered against him in that amount.*fn1
2. Defendant Schmitz shall restore $86,421.14 to the Plan as set forth in Paragraph 5, infra.
3. Defendant Schmitz is permanently enjoined and restrained from violating the provisions of Title I of ERISA, 29 U.S.C. §§ 1001-1191c.
4. Defendant Schmitz is hereby permanently enjoined and restrained from future service as a fiduciary of, or service provider to, any ERISA-covered employee benefit plan.
5. Defendant Schmitz shall restore to the Plan the amount of $86,421.14 as follows:
a. Beginning on September 1, 2011, Defendant Schmitz shall remit twelve consecutive monthly payments in the amount of $7,201.76 to the Plan's custodian, First Bank, at the following address:
First Bank 11010 Limonite Ave.
Jurupa Valley, CA 92509 All checks should be made out to "S.J. Burkhardt, Inc. Employees' Profit Sharing Plan" and should indicate "Deposit to Account Titled S.J. Burkhardt, Inc. Employees' Retirement Account." The first installment is due and payable on September 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.
b. The payments described are summarized as follows:
Due Date Amount Due
September 1, 2011 $7,201.76
October 1, 2011 $7,201.76 November 1, 2011 $7,201.76 December 1, 2011 $7,201.76
January 1, 2012 $7,201.76 February 1, 2012 $7,201.76
March 1, 2012 $7,201.76 April 1, 2012 $7,201.76 May 1, 2012 $7,201.76 June 1, 2012 $7,201.76 July 1, 2012 $7,201.76 August 1, 2012 $7,201.76
6. Within thirty business days of making each payment set forth in Paragraphs 5(a) through (b), supra, Defendant Schmitz shall provide to the Secretary a copy of the front and back of each remittance check, or other appropriate evidence that such payment has been made as requested by the Secretary.
7. Defendant Schmitz hereby forfeits any interest he may have in any amounts restored to the Plan as a result of this Complaint and Consent Judgment & Order and no amounts restored under the terms of this Consent Judgment & Order shall be allocated to any account he may have.
8. Within ten days of the Court's entry of this Consent Judgment & Order, Defendant Schmitz shall provide a copy of this Consent Judgment & Order to the Plan's custodian, First Bank.
9. Upon Defendant Schmitz's restoration of $86,421.14 in losses to the Plan, Defendant Schmitz 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 $17,284.23 ("Penalty Amount"). Defendant Schmitz waives 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 5, supra, Defendant Schmitz 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. 72-032761on the check) to: Regular U.S. Mail
U.S. Department of Labor ERISA Civil Penalty P.O. Box 71360 Philadelphia, PA 19176-1360
10. Whenever a submission is required to be made to the Secretary 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
11. In the event Defendant Schmitz fails to timely make any payment of any of the monthly installments identified in Paragraph 5, supra, then Defendant Schmitz shall be in default, and 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.
12. Defendant Schmitz expressly waives any and all claims of any nature which he has 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.
13. The Secretary and Defendant Schmitz shall each bear their own costs, expenses, and attorneys' fees incurred to date in connection with any stage of this