Court appoints independent fiduciary to distribute $597K from abandoned profit-sharing plan to employees of defunct Delaware County mushroom farm Date of action:           April 15, 2024Type of action:          Consent judgment and order  Court:                            U.S. District Court for the Eastern District of Pennsylvania in Philadelphia. Defendants:               Joseph Silvestri & Son Inc., Donna M. Fecondo and Joseph Silvestri & Son Inc. Profit-Sharing Plan          Background: An investigation by the Department of Labor’s Employee Benefits Security Administration identified Employee Retirement Income Security Act violations by Joseph Silvestri & Son Inc. and owner Donna Fecondo who, as fiduciaries of the company’s profit-sharing plan — a company-sponsored plan that offered employee retirement benefits to participants and beneficiaries — failed to discharge their duties and terminate the plan since 2019 after the company’s mushroom farm in Garnet Valley ceased operations. EBSA found the fiduciaries and Fecondo, a plan fiduciary and trustee, failed to ensure distribution of $597,351 in plan assets to 67 participants and beneficiaries or retain a fiduciary to manage the plan and oversee distribution. Without oversight or control by responsible fiduciaries with the authority to operate and manage it, the plan is designated as an abandoned plan.On Jan. 13, 2022, Fecondo was indicted on two counts of failure to collect and pay employment taxes and four counts of failure to file tax returns. The indictment alleged that, Fecondo did not file tax returns in multiple years, and failed to remit taxes relating to the company and its employees. Fecondo later pleaded guilty and was sentenced to 46 months of incarceration and ordered to pay nearly $600,000 in restitution. On EBSA’s behalf, the department’s Office of the Regional Solicitor in Philadelphia negotiated a consent judgment — executed March 4, 2024 — to resolve the ERISA violations. On April 4, 2024, the department filed a complaint in U.S. District Court against the company, Fecondo and the company’s profit-sharing plan. Shortly thereafter, the department moved for entry of the consent judgment, which the court granted. Relief: Under the consent judgment, the court removed the plan’s current fiduciaries, permanently barred them from serving as fiduciaries to any ERISA-covered plan in the future and appointed AMI Benefit Plan Administrators Inc. as the independent fiduciary to distribute the assets and terminate the plans. As part of the judgment, Fecondo agreed to forfeit her individual plan account to satisfy the order of restitution entered in her criminal matter.Quotes: “The law requires fiduciaries to discharge their duties solely in the best interest of plan participants and beneficiaries in a prudent manner. When this does not happen, the Department of Labor will use all available tools to hold them legally accountable,” said Acting Regional Solicitor of Labor Samantha Thomas in Philadelphia. “The department is determined to protect the assets of employee benefit plans and to hold fiduciaries responsible when they abandon plans and fail to protect assets,” said EBSA Regional Director Cristina O’Brien in Philadelphia. Julie A. Su, Acting Secretary of Labor, U.S. Department of Labor v. Joseph Silvestri & Son. Inc., Donna M. Fecondo and Joseph Silvestri & Son Inc. Profit Sharing Plan Civil Case No. 2:24-cv-01414
http://www.dol.gov/newsroom/re....leases/ebsa/ebsa2024