Judge Orders Home Health Provider and Two Officers to Repay $1.7 Million to Profit Sharing Plan

Friday, February 19, 2016

A federal judge has ordered an Illinois home health care provider and two of its officers to repay a total of $1,736,339 to the Alliance Home Healthcare Inc. Profit Sharing Plan.

An investigation by the department’s Employee Benefits Security Administration in Chicago found that Palos Hills-based Alliance Home Healthcare Inc., its President Dalisay Sulit and Secretary/Treasurer Reginaldo Sulit improperly transferred and distributed more than $1.6 million from the profit sharing plan to themselves, the company, and others.

The department filed a lawsuit in August 2015 asserting that these plan withdrawals were not in the best interests of the participants and beneficiaries of the employee benefit plan, as required by the Employee Retirement Income Security Act.

The $1,601,908 in withdrawn plan assets were used for non-plan purposes, including directly benefitting the company. The judgment also requires the trustees to repay lost opportunity costs of $134,431, bringing the total owed to $1,736,339.

The U.S. District Court for the Northern District of Illinois, Eastern Division in Chicago, also removed the defendants from their positions as fiduciaries to the plan, and permanently enjoined them from serving as fiduciaries or service providers to any plan covered by ERISA. The court appointed Lefoldt & Co. P.A. of Ridgeland, Mississippi, as an independent fiduciary, compensated at the defendants’ expense, to distribute the plan’s assets to participants and beneficiaries and to terminate the plan.

Alliance Home Healthcare established the plan on Jan. 1, 2000, to provide retirement benefits to eligible employees. As of Dec. 31, 2006 – the last year an annual report was filed – the plan had 127 participants and $1.6 million in assets. Alliance Home Healthcare provided health care services to patients in their homes.

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