Feds sue Northbrook union fund for improper lending — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Feds sue Northbrook union fund for improper lending

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in Compensation and Benefits,Employment Law,Human Resources

The U.S. Department of Labor has sued the United Employee Benefit Fund in Northbrook and its trustees, David Fensler and Anthony Monaco, following an investigation by the Employee Benefits Security Admin­istration (EBSA) that found the defendants violated the Employee Retirement Income Security Act (ERISA) by making improper loans.

EBSA’s investigation showed that Fensler and Monaco approved 194 loans from the fund to plan beneficiaries from 1997 to 2009. Many of the loans lacked documentation, many are delinquent and none has ever been completely repaid.

ERISA requires fund trustees to document any loans, make collection efforts when they are not repaid and cap loans at 50% of the value of the beneficiary’s account.

EBSA claims Fensler and Monaco consistently failed to do so.

The National Production Workers Union Local 707, based in Oak Brook, established the fund to provide medical, death, disability and other benefits to union members.

EBSA is requiring the trustees to correct all improper transactions made with fund money, reimburse the fund for losses and opportunity costs. In all, the damages will total more than $1 million.

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