02/09/2018 | Press release | Distributed by Public on 02/09/2018 21:51
CHICAGO, IL - The U.S. Department of Labor has entered into a settlement agreement with U.S. Fiduciary Services and three of its subsidiaries that provides for payment of more than $7 million to 42 retirement plans that suffered losses as a result of investments in fictitious loans made by Florida-based First Farmers Financial LLC (FFF).
The agreement and anticipated future payments from a pending Receivership Estate case involving FFF are expected to compensate the retirement plans fully for approximately $16 million in losses.
FFF created the fictitious loans and forged documents stating that the loans were guaranteed by the U.S. Department of Agriculture. Forty-two retirement plans invested in a fund exposed to the fraudulent FFF loans through subsidiaries of U.S. Fiduciary Services.
EBSA's Chicago and Atlanta regional offices conducted investigations of the subsidiaries - Salem Trust Company, Pennant Management Inc., and GreatBanc Trust Company - for potential violations of the Employee Retirement Income Security Act of 1974 (ERISA) in connection with the plans' investments in a fund exposed to the fictitious FFF loans.
After its investigations, the Department entered into the settlement agreement with U.S. Fiduciary Services and the three subsidiaries, resolving its claims of ERISA violations. Representatives of the ERISA-covered retirement plans that are due to receive settlement proceeds were also parties to the settlement agreement. The Department's Office of the Solicitor assisted EBSA in the investigation and negotiated the settlement.
'Fiduciaries must work solely in the interest of participants and beneficiaries,' said Jeffrey A. Monhart, EBSA Regional Director in Chicago. 'The Department of Labor conducts investigations and undertakes enforcement actions to protect Americans' hard-earned benefits. This settlement restores vital benefits that rightfully belong to employees.'
Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa.