Case 3:12-cv-04450-MAS-DEA Document 149 Filed 04/20/16 Page 1 of 8 PageID: 10104
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
THOMAS E. PEREZ, Secretary of
Labor, United States Department of Labor
Plaintiff,
v.
FIRST BANKERS TRUST SERVICES,
INC.,
VINCENT DIPANO, and the
SJP GROUP, INC. EMPLOYEE STOCK
OWNERSHIP PLAN
No. 3:12-cv-04450-MAS-DEA
Defendants
PARTIAL CONSENT ORDER AND JUDGMENT AS TO
SECRETARY'S CLAIMS AGAINST DEFENDANT DI PANO
Plaintiff Thomas E. Perez, Secretary of Labor, United States Department of
Labor (the "Secretary") and Defendant Vincent Di Pano ("Mr. Di Pano") agree to
the entry of this Partial Consent Order and Judgment as a complete resolution of all
issues in contention between them in this matter. This Partial Consent Order and
Judgment does not resolve any of the Secretary's claims against Defendant First
Bankers Trust Services, Inc. ("FBTS").
This action arises under Title I of the Employee Retirement Income Security
Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., as amended, and was brought by
the Secretary pursuant to ERISA § 502(a)(2) and (5), 29 U.S.C. § 1132(a)(2) and
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Case 3:12-cv-04450-MAS-DEA Document 149 Filed 04/20/16 Page 2 of 8 PageID: 10105
(5), to obtain relief for alleged breaches of fiduciary duty under ERISA § 409, 29
U.S.C. § 1109, and to enjoin acts and practices which allegedly violate the
provisions of Title I of ERISA.
The Secretary has authority to enforce the provisions of Title I of ERISA by,
among other means, the filing and prosecution of claims against fiduciaries and
other parties who are in violation of Title I of ERISA pursuant to ERISA §§
502(a)(2) and (5), 29 U.S.C. §§ 1132(a)(2) and (5).
On April 16, 2007, Mr. Di Pano sold 380,000 shares of stock in the SJP Group,
Inc. ("SJP")-representing 3 8% of all outstanding shares of SJP-to the SJP
Employee Stock Ownership Plan ("Plan") for $16 million (the "Transaction").
On July 17, 2012, the Secretary filed an action in the United States District
Court for the District of New Jersey ("Court"), styled Perez v. First Bankers Trust
Services, Inc., No. 3:12-cv-04450, asserting various claims against Mr. Di Pano,
First Bankers Trust Services, Inc. ("FBTS"), and the Plan 1 in connection with the
Transaction under the Employee Retirement Income Security Act of 1974, 29 U.S.C.
§ 1001 et seq., as amended ("ERISA"), (the "Lawsuit").
The Lawsuit arises under Title I ofERISA, and was brought by the Secretary
pursuant to ERISA §§ 502(a)(2) and (5), 29 U.S.C. §§ 1132(a)(2) and (5), to obtain
relief for alleged breaches of fiduciary duty under ERISA § 409, 29 U.S.C. § 1109,
1
The Secretary has named the Plan as a Defendant only for the purpose of ensuring
complete relief among the parties under Federal Rule of Civil Procedure 19. See
Complaint~ 4, D.E. 1.
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and to enjoin acts and practices which allegedly violate the provisions of Title I of
ERIS A.
The Secretary's complaint alleges that Mr. Di Pano breached his fiduciary
duties to the Plan in connection with the Transaction, in violation of ERISA §§
404(a)(l)(A), (B) and (D), 29 U.S.C. §§ 1104(a)(l)(A), (B) and (D), and/or that Mr.
Di Pano knowingly participated in a non-exempt prohibited transaction within the
meaning ofERISA §§ 406(a)(l)(A) and (D) and§§ 406(b)(l) and (2), 29 U.S.C. §§
1106(a)(l)(A) and (D) and 29 U.S.C. §§ 1106(b)(l) and (2).
Mr. Di Pano waives the notice of assessment and service requirement of 29
C.F.R. § 2570.83 for all payments required under this Partial Consent Order and
Judgment.
The Secretary and Mr. Di Pano have agreed to resolve all remaining matters in
controversy in this action between them.
Mr. Di Pano neither admits nor denies the allegations in the Secretary's
complaint.
Upon consideration of the record herein, and as agreed to by the Secretary
and Mr. Di Pano, the Court finds that it has jurisdiction to enter this Partial Consent
Order and Judgment.
IT IS THEREFORE ORDERED that:
1.
Mr. Di Pano shall pay the total sum of Two Million Forty-Five
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Thousand Four Hundred Fifty-Four and 54/100 Dollars ($2,045,454.54) to the Plan
(the "Settlement Amount") within thirty (30) days of entry of the Bar Order as
described in paragraph 5 below.
2.
Mr. Di Pano shall pay the total sum of Two Hundred Four Thousand
Five Hundred Forty-Five and 46/100 Dollars ($204,545.46) to the United States
Department of Labor pursuant to BRISA section 502(1), 29 U.S.C. section 1132(1)
(the "502(1) Penalty") no later than thirty seven (37) days of entry of the Bar Order
set forth in paragraph 5 below. The 502(1) Penalty shall be paid by check
referencing EBSA Case No. 30-102925(48), and the check shall be sent via regular
mail to the following address:
U.S. Department of Labor
BRISA Civil Penalty
P.O. Box 71360
Philadelphia, PA 19176-1360
3.
Mr. Di Pano shall provide the Secretary with proof of payment of the
Settlement Amount and its deposit to the Plan within thirty (30) days of making
such payment. Such proof will be sent to the Secretary's representative at the
following address:
Jonathan Kay, Regional Director
New York Regional Office
Employee Benefits Security Administration
U.S. Department of Labor
33 Whitehall Street, Suite 1200
New York, NY 10004
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4.
Mr. Di Pano shall not serve as a fiduciary or service provider to any
BRISA-covered Plan in the future.
5.
The Court will enter a bar order (the "Bar Order") permanently
enjoining FBTS from presenting in this or in any other action, proceeding,
administrative agency or any other forum against Mr. Di Pano any claim for
contribution or indemnification, however denominated and regardless of the
allegations, facts, law, theories, or principles that arise from or relate in any way to
the Secretary's claims. The Court will enter the Bar Order on such additional terms
as the Court determines are fair to the parties in this action.
The Court
acknowledges that Mr. Di Pano' s consent and the Secretary's consent to the terms
of this Partial Consent Judgment and Order are expressly conditioned on the entry of
the Bar Order.
6.
All claims that the Secretary has or could have asserted against Mr. Di
Pano are hereby dismissed as to Mr. Di Pano only.
Such dismissal is without
prejudice to the Secretary's right, upon good cause shown, to reassert those claims
set forth in his complaint against Mr. Di Pano within sixty (60) days of entry of the
Bar Order in the event that Mr. Di Pano fails to comply with paragraphs 1 through 2
of this Partial Consent Order and Judgment. In the event that the Court grants the
Secretary's request to reassert his claims against Mr. Di Pano by reason of Mr. Di
Pano' s failure to comply with the provisions of this Partial Consent Order and
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Judgment, the timeliness of the Secretary's claims for purposes of ERISA § 413, 29
U.S.C. § 1113 or any other applicable limitation period shall be tolled as of the
filing of the complaint on July 17, 2012.
7.
It is agreed and understood that, subject to the Bar Order, nothing in
this Partial Consent Order and Judgment shall limit or impair the Secretary's rights
or claims for recovery and equitable relief against FBTS or its insurers, including
rights to attorneys' fees and costs in the Lawsuit.
8.
Nothing in this Partial Consent Order and Judgment is binding on any
government agency other than the United States Department of Labor.
9.
Mr. Di Pano and the Secretary shall each bear his own attorneys' fees
and costs in connection with this Partial Consent Order and Judgment, including,
but not limited to, attorneys' fees which may be available under the Equal Access to
Justice Act, as amended.
10.
The Court directs entry of this Partial Consent Order and Judgment,
which together with the Bar Order, shall constitute a final order as to Mr. Di Pano.
11.
The Court shall retain jurisdiction for the purposes of enforcing this
Partial Order and Judgment.
12.
This Partial Consent Judgment and Order may be executed in multiple
counterparts, each of which shall be treated as an original.
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Case 3:12-cv-04450-MAS-DEA Document 149 Filed 04/20/16 Page 7 of 8 PageID: 10110
Respectfully submitted,
5 ,
L,
2016
Dated: January
New York, NY
2016
Dated: January
Parsippany, New Jersey
Washington, D.C.
KELLEY DRYE & WARREN LLP
M. PATRICIA SMITH
Solicitor of Labor
By: Isl Michael A. Innes
Lauri A. Mazzuchetti
Michael A. Innes
One Jefferson Road, 2nd Floor
Parsippany, New Jersey 07054
Telephone: (973) 503-5900
JEFFREY S. ROGOFF
Regional Solicitor
GROOM LAW GROUP, CHARTERED
Andrew Karonis
Senior Trial Attorney
Avibiw
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Andrew M. Katz
Trial Attorney
U.S. Department of Labor
Attorneys for Plaintiff
Thomas E. Perez, Secretary of Labor
POST OFFICE ADDRESS:
U.S. Department of Labor
Office of the Solicitor
20 l Varick Street, Room 983
New York, New York, l 0014
Tel. (646) 264-3650
Fax. (646) 264-3660
Edward A. Scallet, Esq. (pro hac vice)
Sean C. Abouchedid, Esq. (pro hac vice)
Natasha S. Fedder, Esq. (pro hac vice)
1701 Pennsylvania Ave., NW
Washington, DC 20006
T: (202) 857-0620
Attorneys for Vincent J. Di Pano
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Case 3:12-cv-04450-MAS-DEA Document 149 Filed 04/20/16 Page 8 of 8 PageID: 10111
SO ORDERED:
HO~~tlcf
HAEL A. SHIPP
UNITED STATES DISTRICT JUDGE
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