Date of Action: May 25, 2023
Type of Action: Employee Retirement Income Security Act consent order and judgment
Company/Owners: Chicago Metropolitan Obstetricians and Gynecologists Ltd.
Dr. Ernest Hayes
Chicago Metropolitan Obstetricians and Gynecologists Ltd. 401(k) Plan
Background: On May 25, 2023, Judge Charles P. Kocoras in the U.S. District Court for the Northern District of Illinois entered a consent order and judgment involving the practice, the owner and the plan.
The Secretary of Labor filed a lawsuit on Oct. 28, 2021 after the department’s Employee Benefits Security Administration found the Harvey, Illinois, company and Hayes failed to remit over $80,000 in employees’ voluntary salary contributions to the company’s 401(k) plan from Jan. 1, 2014 through Dec. 31, 2017. During the same period, the company and Hayes also failed to remit employee contributions in a timely manner and failed to remit employer contributions owed to the employees.
Resolution: On April 17, Hayes restored $10,000 to the plan. The consent judgment requires Hayes to restore the remaining balance of $80,000 in monthly payments during the next 30 months. Following full payment, the judgment requires Hayes to pay an $18,000 penalty to the government due to his fiduciary breaches.
The judgment also forbids Hayes and the company from future ERISA violations, and bars them from serving as fiduciaries or service providers to any ERISA-covered employee benefit plan in the future. The court appointed AMI Benefit Plan Administrators Inc. to serve as the plan’s independent fiduciary to restore funds to the harmed plan participants’ accounts. Hayes is required to pay AMI for its services.