US Department of Labor files suit against Minnesota IT company for not remitting employee’s retirement plan contributions

Summary:

On August 30, 2023, the Secretary of Labor filed a lawsuit against Virtual Matrix Corp. and its CEO, Suman Thotakura, in the U.S. District Court of Minnesota. The lawsuit stems from a complaint filed by the Employee Benefits Security Administration (EBSA) alleging that Virtual Matrix Corp. failed to remit $45,972 in employee voluntary salary contributions and $759 in participant loan repayments to the Virtual Matrix 401(k) Profit Sharing Plan from April 1, 2021 to October 31, 2022.

As stated in the complaint, this failure is a violation of the Employee Retirement Income Security Act (ERISA), which protects employee retirement and health plans. The lawsuit seeks to make the plan whole, which means reversing the harm caused by the company’s actions. Additionally, the complaint seeks to permanently ban the company and its CEO from serving or acting as fiduciaries or service providers to any other ERISA-covered employee benefit plan and to remove them from their current fiduciary positions.

Employee Benefits Security Administration Regional Director Mark Underwood noted that failing to forward voluntary employee contributions to employee retirement plans “violates employees’ trust and denies workers the opportunity to earn interest on their investments and prepare for their future.”” Employers and workers can reach EBSA for help with problems related to private sector retirement and health plans by calling the toll-free number 866-444-3272 or visiting the EBSA website.

The case number for this lawsuit is Case No. 1:23-cv-2677.

Overall