By DAVID BERTOLA
Business First

The U.S. Department of Labor has filed a lawsuit in federal court seeking the appointment of an independent fiduciary to oversee the abandoned 401(k) plan of defunct Digitel Solutions for Business Inc., or Empire Telecom Systems Corp., formerly located in Buffalo.

The Digitel Solutions for Business Inc. 401(k) Plan, also known as Empire Telecom Systems Retirement Plan, was sponsored by the company until it ceased operations in 2004. At various times between 2000 and 2004, Lawrence Davis, Christopher Sutton, Ronald Kelly and Michael Groh were Digitel officials and served as fiduciaries to the plan.

According to the U.S. Department of Labor, after the company went out of business, those four stopped managing the plan, and failed to take steps to terminate it and distribute its assets to former employees covered by it.

As a result, employee participants were unable to access their 401(k) accounts. Under the Employee Retirement Income Security Act, plans must be managed by named fiduciaries. In their absence, participants and beneficiaries cannot obtain plan information, make investments or collect retirement benefits.

Labor Department spokesman John Chavez said this is strictly a civil case, filed in U.S. District Court for the Western District of New York, and no criminal charges will be filed on the four former fiduciaries. The Labor Department's lawsuit asks the court to appoint an independent fiduciary to administer the plan, distribute its assets to eligible participants and beneficiaries, and oversee the plan's termination.

"The main goal is to get the participants access to their accounts and their money," Chavez said, adding that there were three participants in the plan. When the business closed in 2004, he said, there was less than $3,000 in it.

"This is unfortunately a situation where a plan gets abandoned. It is very common for the department to file a suit like this to make plan participants whole again," Chavez said.

"Even in a small case like this, workers should know that they can turn to the Labor Department for assistance when they find themselves locked out of access to their retirement plan," said Jean Ackerman, regional director in Boston, Mass., for the Labor Department's Employee Benefits Security Administration. "We took this legal action to ensure that the plan is properly managed so that its participants can finally gain access to their retirement assets."

Chavez said it usually doesn't take the court too long to agree with the Labor Department that assigning a fiduciary is the only way to resolve situations like these.

"The judge will make a decision in fairly short order, but it really is up to the court," Chavez said. "It could take a few weeks, even a month or two."

The suit resulted from an investigation conducted by Employee Benefits Security Administration's Boston Regional Office.