ELKHART — An agreement with the U.S. Labor Department to pay back more than $11,000 in mishandled employee retirement funds is the latest link in a chain of troubles for a Granger man who operates different Elkhart businesses.
John A. Levy already paid back the mismanged funds in the retirement accounts of Romaine Inc., the company he owns and runs. He can never again run any employee benefit plans under the agreement filed in U.S. District Court in South Bend.
The agreement, filed May 10, is the latest in a string of troubles for Levy, Romaine and the other businesses he runs: Wintergreen Systems, Market Development Specialists (MDS) and Koldcare.
In 2009 Levy and MDS settled with the Federal Trade Commission over complaints that MDS failed to pay rebates due to thousands of consumers across the country for the purchases of computer equipment. “The Commission contends that MDS acted as a re-seller of many products, including monitors and portable DVD players. MDS distributed these products to the public through retailers including Office Depot, PC Connection, Buy.com, PCMall, and Woot.com. To make its products more attractive to retailers, it offered many mail-in rebates ranging in value from $20 to $150,” the FTC said in an announcement of the case in 2009. “Some consumers who bought MDS’s products and applied for rebates, however, found they were in for a long wait — in some cases up to two years — to get their money,” according to the commission.
The following year, MDS, Romaine and Levy all filed for bankruptcy to get out from under millions of dollars in debts, according to court documents.
Those cases have since been closed.
During the bankruptcy proceedings, though, Levy ran afoul of labor laws with how he handled employees’ retirement contributions, according to the agreement filed between Levy and the Department of Labor.
As chairman and owner of Romaine, Levy withheld more than $1,000 from employees’ pay that was supposed to go into the retirement plan, but he held on to the money for up to 65 days before putting it into the retirement accounts, holding it in the corporate account, according to the Department of Labor complaint.
During the same time period, Jan. 1, 2010, to April 29, 2011, Romaine withheld $11,276 from employee pay without putting it into the retirement accounts, according to the complaint.
As part of the joint agreement, he paid $11,029.57 to the Romaine retirement plan and another $1,061 to the Market Development Specialists plan.