DOL Obtains Consent Order That Requires Profit-Sharing Plan Fiduciaries To Pay $101,618

contact Sharon Morrissey (202) 219-8921

FOR IMMEDIATE RELEASE
Thurs. April 19, 2001

Pension & Welfare Benefits Administration
Denver Office of Public Affairs 

Distribution Specialists is a trucking distribution company. As of Dec. 31, 1997, the company's profit-sharing plan covered 37 participants and had assets of $919,583.

In a lawsuit filed last July, the DOL alleged that Distribution Specialists and plan trustee Michael J. O'Connor violated ERISA when they made a series of transfers and a loan totaling more than $238,000 over the period from 1994 to 1998. The DOL further alleged that the unsecured loan has never been fully repaid and that the series of plan transfers benefited the company and Mr. O'Connor. In an amended complaint filed simultaneously with the consent order, the DOL added Constance O'Connor and John Townley Jr. as defendants because both of them received income as a result of the prohibited transactions committed by Michael O'Connor. Ms. O'Connor is Michael O'Connor's mother and Mr. Townley is the vice president of the company.

Under the terms of the consent order, the defendants' profit-sharing plan accounts will be offset by the amount of the restitution and redistributed to the accounts of the remaining plan participants. The consent order allows Mr. O'Connor to remain as the plan trustee in order to terminate the plan and distribute its assets. Mr. O'Connor must provide proof that the plan's assets have been distributed to eligible participants. In the event that Mr. O'Connor has not distributed all of the plan's assets by Dec. 31, 2001, the DOL may recommend a successor trustee to replace him.