WASHINGTON (Legal Newsline) - The U.S. Department of Labor is suing auto parts manufacturer Metavation for $34 million for alleged Employee Retirement Income Security Act violations.
It is asking for restoration of assets to two retirement funds. DOL names as defendants plan investment advisers George Hofmeister, chairman and director of Metavation, and Bernard Tew, managing director of Tew Enterprises and Bluegrass Investment Management.
The suit also names Metavation, a subsidiary of Lexington, Ky.-based Revstone Industries.
"Retirees who rely on pension plans should not have to worry about whether these funds are secure," Secretary of Labor Hilda Solis said. "That is why those who are entrusted with managing pension funds are held to the highest legal standards and will be held accountable by the Labor Department if they violate that trust."
The suit, filed in the U.S. District Court for the Eastern District of Kentucky, states prohibited loans were made to related companies within the Revstone Industries corporate family. Also, it alleges, "prohibited use of plan assets for the purchase and lease of employer property, prohibited purchase of customer notes from companies within Revstone Industries, prohibited purchase of investments from adverse parties, payment of excessive fees to services providers, and the improper allocation of income and expense payments between the pension plans."
As a result of the defendants engaging in these prohibited transactions, approximately $12.1 million from the Hillsdale Salaried Pension Plan and approximately $22.5 million from the Hillsdale Hourly Pension Plan were improperly used, the DOL said.