DOL Scores Victory Vs Mother, Son In Civil Complaint

CHICAGO (JGL) – A retired Filipino doctor, who owns a 20-year-old Alliance Home Healthcare businesses in Chicago, Illinois suburbs of Worth and Palos Hills, and her son were ordered to pay $1.6-Million by default for failure to attend or send their lawyer during the court hearings of a civil complaint filed against them by the United States Secretary of Labor, Thomas E. Perez.

Retired Dr. Dalisay Sulit, 77, and her son, Reginaldo Sulit, 47, were ordered by U.S. Northern District Court Judge Amy St. Eve on Feb. 16 to refund the cash they took from a profit-sharing fund to benefit nurses and physical therapists, who worked in their family-owned business.

According to company’s Website, the Alliance Home Healthcare business offers skilled nursing services, home health aide services, physical therapy, occupational therapy, speech therapy, medical social worker and procurement of medical supplies and equipment all geared towards beneficiaries of government’s Medicare program.

Although the husband of Dr. Sulit and father of Reginaldo Sulit, Reynaldo Sulit is a vice president of Alliance and a “party in interest in the plan” and had also received $325,000 in “plan assets,” Reynaldo was not named in the lawsuit filed last year.

Aside from the $1.6-M, the mother and son, Judge St. Eve also ordered them to pay $134,000 in interest.

In its report, Chicago Tribune quoted Reginaldo as saying, “(T)he ruling (w)as unfair but declined to say why he had not fought the case in court, adding no nurse ever received any funds from the fund because they didn’t retire or they weren’t vested.”

The four-count civil complaint was filed by Secretary Perez. Count I is failure to conduct annual valuation, accounting and annual reports; Count II, transfers of Plan Assets to Alliance, D. Sulit and R. Sulit; Count III, prohibited transfers of party in interest in excess of vested account balance; and Count IV, improper in-service distribution.

DR. SULIT, 69.5% OWNER OF ALLIANCE

The complaint said Dr. Sulit, president of Alliance Home Healthcare, Inc. Profit Sharing Plan,  owned 69.5%  from Jan. 1, 2008 up to Feb. 11, 2015 to provide retirement benefits to eligible employees. She was one of the Plan’s two trustees, who had discretionary responsibility and authority and control over the Plan assets.

Her son, Reginaldo, owned 5.5% and served as Alliance’s secretary and the other  named-trustee, who had also discretionary authority and responsibility in the administration of the Plan and had exercised authority and control over the disposition of its assets.

Among the duties of the mother and son were to “prepare annual reports, setting forth the net income or loss of the Trust Fund, gains or losses realized by the Trust Fund, changes in value of the Trust Fund, all payments and distributions made from the Trust Fund and related information.”

In the Plan year ending on Dec. 31, 2006, Alliance filed an annual report Form 5500 with the U.S. Department of Labor, saying it is holding $1.6-M in total assets.

Dr. Sulit was held liable for “breaches of fiduciary responsibility” and she “failed to use reasonable care to prevent a co-trustee from committing a breach.”

After transferring $321,000 in Plan assets to Reynaldo Sulit, Reginaldo signed away checks from Aug. 3, 2013 to Nov. 30, 2012 and another $200,000 on Nov. 20, 2012, which reduced the plan asset to $588,000.

The U.S. Department of Labor’s Phyllis Borzi, assistant secretary of labor, which brought the case against the Sulits and Alliance in August, said, “This judgment is a victory for the participants in the company’s profit sharing plan. Too often, we see employee benefit-plan funds used illegally by company owners and management to prop up struggling companies. Employee benefit plans must be managed in the best interest of participants, bottom line.”

An email message sent by this reporter to the Alliance was not answered.

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