Wednesday, April 28, 2004 | 10:45 a.m.
The former owner and president of a defunct Las Vegas-based food delivery company has been ordered by both a federal judge and a bankruptcy judge to pay $11,500 to the company's retirement plan.
The U.S. Department of Labor brought suit against Robert Marc Raskin, Quality Home Foods Inc. and the Quality Home Foods Inc. 401 (k) profit sharing plan, in U.S. Bankruptcy Court in January 2003 after Raskin filed for Chapter 7 bankruptcy protection. The Labor Department filed a lawsuit in U.S. District Court earlier this month to recover the money. The complaint alleged Raskin misappropriated the plan's funds.
The company discontinued operations in August 2002 after one of the company's creditors, Oceanside, Calif.-based Monterey Financial Services Inc. foreclosed on the company, Tino Serrano, a Labor Department spokesman, said.
On April 19, U.S. District Court Judge Philip Pro ordered Raskin to repay the money. The decision upheld a similar decision made in bankruptcy court on April 9.
Raskin was the fiduciary of the company's 401 (k) retirement fund operated for 27 former employees, the Labor Department said. He filed for personal bankruptcy protection in January 2003, listing assets of $24,598 and debts of $10 million.
The Labor Department originally alleged Raskin owed $17,000 to the plan. The agency alleged Raskin did not act in the best interest of the plan after not forwarding $17,000 to the account in employee contributions, participant loan repayments and employer matching contributions. The complaint alleged that he instead used the money to pay off company expenses.
Serrano said the Labor Department decided not to pursue the entire $17,000 and settled for $11,500, which includes employee contributions for the plan that Raskin allegedly did not deposit into the fund -- and a portion of the disputed employer liability to the fund.
"The balance would have been additional employer contributions, which is a much tougher recovery in light of the fact that there were other claims against this employer," Serrano said.
Under the judgment Raskin must repay the money, forfeit his own account balance in the plan and accept a court-appointed fiduciary to administer the plan. Raskin is also permanently barred from acting as a fiduciary in an employee benefit plan.
James Greene, an attorney for Raskin, said Raskin has denied the Labor Department's allegations. He said Monterey Financial Services took over the company and that Monterey is the one responsible for the money. Neither Raskin or the Labor Department pursued liability claims against Monterey Financial Services.
Greene said although Quality Home Foods is defunct, Monterey Financial Services is operating a similar company in Southern Nevada.
Mike Gray, president of Monterey Financial Services, said his company has no liability in the Labor Department's complaint.
"We've done everything right. If there was the slightest indication that we were responsible I'm sure they would have come after us," he said.
Gray said the current company MFS Prime Foods has 35 employees, most of whom worked previously for Quality Home Foods. He said the employees have a profit sharing plan that they don't have to make contributions to. The company delivers non-perishable food and meat to customers in Southern Nevada.
"We've improved the business and have done a lot of good things," Gray said.
Serrano said Raskin is the rightful defendant.
"We consider the responsibility for this 401 (k) to rest squarely with Raskin because of the nature of the sale of the business to its new operators," Serrano said.