Court Orders Additional Recovery of Misused Pension Funds
The U.S. District Court for the Eastern District of Kentucky has issued a consent judgment against George Hofmeister, trustee of several pension plans.
Hofmeister has been ordered to repay $300,000 to the plans sponsored by TPOP LLC, formerly known as Metavation LLC; Fairfield Castings LLC, formerly known as Revstone Castings Fairfield LLC; and Fourslides Inc. Hofmeister is also banned from being a fiduciary or service provider to employee benefit plans under the Employee Retirement Income Security Act (ERISA).
Consent judgments were previously issued against William Tweardy and Nelson Clemmens, members of the investment committee for the Metavation LLC of Southfield, Michigan, and Fairfield LLC of Fairfield, Iowa, pension plans. Consent judgments were also obtained against Robert La Courciere and Pamela Babbish, former trustees of the Fourslides Inc. pension plan.
More than $12 million has been recovered after investigations by the U.S. Department of Labor resulted in court orders and injunctions against Hofmeister and other fiduciaries. A series of lawsuits alleges that, among others, Hofmeister, Bernard Tew, investment service provider Bluegrass Investment Management LLC, investment service provider Tew Enterprises LLC, Metavation, Fairfield, Fourslides, Tweardy, and Clemmens improperly used pension funds. Judgments against the remaining defendants are being sought by the department in ongoing litigation.
Investigators found improper use of plan assets for the purchase and lease of company property, the prohibited purchase of customer notes from affiliated companies, the prohibited transfer of assets in favor of a party-in-interest, the payment of excessive fees to service providers. Other violations are also alleged.
In July 2013, the court issued a preliminary injunction removing Hofmeister, Tew, and Bluegrass from exercising management or control of the pension plans, and appointed Fiduciary Counselors, investment advisers in Washington, D.C, to independently administer the plans.
Metavation, Fairfield, Fourslides, Revstone and their affiliated companies, design and manufacture components used in the transportation and heavy-truck industries. Revstone and its various affiliates, including Metavation and Fairfield, were directed by Hofmeister and owned by the irrevocable trusts of Hofmeister’s children.