What You Must Know
- A preliminary injunction bars the agency and proprietor from involvement with belief belongings.
- The agency, RiversEdge, is a third-party administrator of not less than 240 retirement plans.
- RiversEdge and Paul Palguta transferred belongings from 17 retirement plans into their very own company accounts, in accordance with the division.
A federal choose this week issued a preliminary injunction in opposition to a Pennsylvania retirement plan administrator accused of embezzling not less than $5.5 million in belongings from a number of plans.
The motion by the U.S. District Courtroom for the Western District of Pennsylvania follows a criticism and movement filed by the U.S. Division of Labor in January and an emergency momentary restraining order issued earlier this month.
The order bars defendants RiversEdge Superior Retirement Options LLC in Sewickley, Pennsylvania, and proprietor Paul Palguta from additional involvement with belief belongings and from serving as fiduciaries or service suppliers to any plans coated by the Worker Retirement Earnings Safety Act of 1974, or ERISA.
The courtroom order additionally forbids RiversEdge, a third-party administrator of not less than 240 retirement plans, and Palguta from withdrawing any funds from two company accounts into which they’re alleged to have illegally transferred plan belongings, aside from court-ordered fee of impartial fiduciary charges.
It additionally requires them to protect all related information for switch to a court-appointed impartial fiduciary, and requires the impartial fiduciary to supervise an accounting of 17 allegedly mismanaged plans. Fourteen of the allegedly mismanaged plans are coated by ERISA, in accordance with the preliminary injunction.
The allegedly mismanaged plans embody the nonprofit Christian Support Mission’s 403(b) plan, an LCBC Church 403(b) and the St. Barnabas Well being System Retirement Financial savings Plan, in accordance with the injuction order.
The plans that RiversEdge administered maintain tens of millions of {dollars} in belongings, DOL stated in a launch. ERISA covers not less than 229 of those retirement plans.
An investigation by the division’s Worker Advantages Safety Administration decided RiversEdge and Palguta violated ERISA.