Department of Labor Obtains Judgment Requiring Defunct Westmoreland County Company, President to Restore $40K to Its Health Plan

WASHINGTON, Feb. 27 -- The U.S. Department of Labor Employee Benefits Security Administration issued the following news brief on Feb. 26, 2024:

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Date of action: Feb. 8, 2024

Type of action: Motion for default judgment issued by the U.S. District Court for the Western District of Pennsylvania. The action follows a complaint and motion filed by the U.S. Department of Labor in November 2022.

Defendants: Robert Kendi, Ken-Co Fabricating Co. Inc. and the Ken-Co Fabricating Co. Inc. Health Plan

Background: An investigation by the department's Employee Benefits Security Administration determined that around October 2017, the defendants established a fully insured health and welfare plan offered to all eligible company employees of the custom steel, aluminum, automotive and industrial paint shop. Robert Kendi, the company president, and Ken-Co Fabricating Co. were both fiduciaries to the plan.

EBSA investigators found that from August 2019 through October 2020, the defendants failed to make required premium payments for coverage but continued to deduct premiums from the plan's beneficiaries, in violation of the Employee Retirement Income Security Act of 1974.

Relief: The motion for default judgment orders the defendants to restore $40,436 to the plan, which represents the unpaid medical claims. It also removes Robert Kendi and Ken-Co Fabricating Co. as fiduciaries of the plan and appoints an independent fiduciary with plenary authority and control with respect to the management and administration of the plan, whose expenses Defendants must pay.

Quotes: "The Employee Retirement Income Security Act requires plan fiduciaries to carry out their duties solely for the benefit of plan participants and their beneficiaries," said Regional Solicitor of Labor Jeffrey Rogoff in New York. "The U.S. Department of Labor pursues appropriate and effective legal remedies on behalf of participants when fiduciaries fail in their obligations."

"The court's judgment restores money to the plan participants who were harmed by the violations," said EBSA Regional Director Cristina O'Brien in Philadelphia.

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Original text here: https://www.dol.gov/newsroom/releases/ebsa/ebsa20240226