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Hilda L. Solis, Secretary of Labor, United States Department of Labor v. Shannon Leslie Stuart

January 25, 2012

HILDA L. SOLIS, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, PLAINTIFF,
v.
SHANNON LESLIE STUART, AN INDIVIDUAL; STEVEN JOHN SCHMITZ, AN INDIVIDUAL; AND S.J. BURKHARDT, INC. EMPLOYEES' PROFIT SHARING PLAN, AN EMPLOYEE BENEFIT PLAN, DEFENDANTS.



MARY K. ALEJANDRO Acting Regional Solicitor DANIELLE L. JABERG Counsel for ERISA CA State Bar No. 256653 IAN ELIASOPH Counsel for Civil Rights Email: eliasoph.ian@dol.gov CA State Bar No. 227557 United States Department of Labor JS 6 90 7th Street, Suite 3-700 San Francisco, California 94103 Telephone (415) 625-7740 Fax (415) 625-7772 Attorneys for Plaintiff, United States Department of Labor

CONSENT JUDGMENT & ORDER AGAINST DEFENDANTS SHANNON LESLIE STUART AND S.J. BURKHARDT, INC. EMPLOYEES' PROFIT SHARING PLAN

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, SHANNON LESLIE STUART ("Stuart") and the S.J. BURKHARDT, INC. EMPLOYEES' PROFIT SHARING PLAN ("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 against Stuart filed in this matter.

C. Defendant Stuart neither admits nor denies the allegations made in the Secretary's Complaint filed in this matter.

It is ORDERED, ADJUDGED AND DECREED that:

A. Defendant Stuart is permanently enjoined from violating the provisions of Title I of ERISA.

B. Except as provided in Subparagraphs i. and ii. of this Paragraph, Defendant Stuart is hereby permanently enjoined from serving as a fiduciary or service provider to any ERISA-covered plan.

i. With regard to the Plan, Defendant Stuart shall be removed as Plan fiduciary and service provider at the time an Independent Fiduciary is appointed by this Court as provided below.

ii. With regard to the ERISA-covered SJB 401(k) Plan (which is named in an entirely separate action brought by the Secretary in this Court, Case No. CV-11-06443 JAK (DTBx)), Defendant Stuart agrees to stipulate to any motion, or not to contest any action ("Stipulated Motion"), brought by the Secretary to the extent that the motion or action seeks his removal as a fiduciary or service provider to the SJB 401(k) Plan and requests the appointment of an Independent Fiduciary selected by the Secretary. The Secretary reserves the right to seek reimbursement for the costs of the Independent Fiduciary on behalf of the SJB 401(k) Plan; however, the Secretary will not request such relief in the Stipulated Motion or action described in this Subparagraph.

C. Defendant Stuart is enjoined from causing any assets to be removed from any account holding assets of the Plan. Within seven days of entry, the Secretary shall serve a copy of this Consent Judgment & Order on the custodian of the assets of the Plan and such custodian shall refrain from distributing Plan assets until receiving further instructions from an Independent Fiduciary appointed by this Court.

D. Defendant Stuart is a participant in the Plan. The Plan is hereby amended to provide for the following: "An offset to a participant's accrued benefit, or an offset to a participant's individual account, against an amount that the participant is ordered or required to pay the Plan with respect to a judgment, order, or decree issued, or a settlement entered into, shall be permitted."

This Consent Judgment & Order shall be attached to the Plan document as an amendment. Defendant Stuart agrees to offset his account balance to pay the expenses and costs associated with the Independent Fiduciary against his accrued benefit in the Plan. At the time the Independent Fiduciary is appointed, he or she shall set off the individual account balance of Defendant Stuart, if any, in the amount of $35,000 to cover the reasonable fees and expenses of the Independent Fiduciary, as authorized by 29 U.S.C. ยง 1056(d)(4). If the reasonable fees and expenses of the Independent Fiduciary exceeds $35,000, the Plan shall pay the remainder. If the ...


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