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Release Date: 05/08/2001
Release Number: 44
Contact Name: Deanne Amaden
Phone Number: 415.975.4741
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San Francisco, California - The U.S. Department
of Labor today obtained a court order permanently barring Patrick C.
McLaughlin and two companies in which he is an officer from serving any
employee benefit plans governed by the Employee Retirement Income Security
Act of 1974. |
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The consent judgment and order is the most recent
development in a Department of Labor lawsuit filed in March, 2000, against
McLaughlin, the companies, and the trustees of the Teamsters Miscellaneous
Employees Health and Welfare Trust for mismanagement resulting in $3.6
million in unpaid health benefit claims. |
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TMET was a collectively-bargained employee benefit plan
which provided life insurance, medical, dental, prescription drug and
vision benefits for more than 3000 employees and union members throughout
the Central Valley. TMET is also known as the Pacific States Health and
Welfare Trust. The plan was terminated by the court in an earlier ruling. |
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The lawsuit alleges that McLaughlin used his positions
as president of the consulting firm McLaughlin and Associates, Inc., and
as secretary and treasurer of the health claims administrator Claims
Benefit Insurance Administrators, Inc., to pay his companies approximately
$3.6 million. That amount greatly exceeds the provisions in the
companies’ written agreements with TMET. |
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The federal complaint also alleges that TMET trustees
failed to establish and maintain the plan’s financial solvency, failed
to pay benefits while paying excessive amounts to the plan’s consultant
and claims administrator for unsubstantiated charges, and failed to
properly bond the plan. |
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A May, 2000 interim consent order required the
resignations of trustees Victor L. Shada, Ron Costa, and Terry Smith, and
appointed Thomas A. Dillon as independent fiduciary to manage the plan. On
January 18, 2001, the court ordered the termination of the Trust due to
insolvency, and placed the Trust into quasi-bankruptcy to protect its
participants, marshall its assets and satisfy its creditors. Department
action continues against the former trustees of the defunct plan for
payment of past due claims and restoration of losses to the plan.
McLaughlin has filed for personal bankruptcy, but has agreed not to
challenge any claims filed on behalf of TMET. |
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The Labor Department credits TMET plan participants who
reported delays of as long as five months in paying dental benefit claims
for prompting the investigation. “People having trouble getting benefits
claims paid should contact us,” said Bette Briggs, regional director of
the Department’s Pension and Welfare Benefits Administration in San
Francisco. “Unpaid claims are often the first sign that a plan is in
financial trouble.” Briggs encourages workers to contact her office at
415.975.4600 if they have questions or suspect abuse of their pension,
health or other benefit plans. |
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The consent judgment resulted from an investigation
conducted by PWBA’s San Francisco Regional Office. It was filed on May
8, 2001, in the United States District Court for the Eastern District of
California, Sacramento Division, in Case No. CIV-S-00-0583 LKK/JFM. |
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U.S. Department of Labor
news releases are accessible on the Internet. The information in this news
release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing
your request. Call 202.693.7773 or TTY 202.693.7775. |
