November 19, 2024
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Former St. Charles Nissan dealership owner must restore more than $13K in worker retirement contributions

Fred Vargason ordered to use his personal retirement funds to make up for missing IRA money

By Brenda Schory

The office of the Illinois Secretary of State Police continues to investigate hundreds of complaints against the now closed Nissan of St. Charles. On Feb. 1, 2019, the office shut down the dealership, which had been located at 2535 E. Main St., St. Charles. The dealership first opened in 1990. (Eric Schelkopf)

ST. CHARLES – The former owner of Nissan of St. Charles, which is no longer in business, has agreed to repay almost $14,000 in restitution to dealership employees whose individual retirement accounts were improperly shorted salary deferral contributions, according to court records.

Fred Vargason has agreed to withdraw $13,772 from his personal retirement account to repay the money missing from employees’ individual retirement accounts, according to a federal consent order and judgment entered April 10 in the Northern District of Illinois.

U.S. District Court for the Northern District of Illinois Judge Robert W. Gettleman entered the consent order and judgment against Nissan of St. Charles and company owner Vargason.

According to the court record, the defendants did not oppose the judgment and order.

Former St. Charles Nissan dealership owner must restore more than $13K in worker retirement contributions by John Sahly on Scribd

“All voluntary employee contributions must be forwarded to employee benefit plans in a timely manner,” Employee Benefit Security Administration Regional Director Ruben Chapa in Chicago said in a news release. “Failing to do so denies employees the opportunity to prepare for the future.”

The Employee Retirement Income Security Act of 1974 is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in those plans.

The U.S. Secretary of Labor filed suit April 8, 2022, after the department’s Employee Benefits Security Administration found the company and Vargason did not remit employees’ voluntary salary contributions to the company’s retirement plan, according to the release.

The amount represents $13,071 in employee contributions that were not forwarded to the plan and $651 in lost opportunity costs for Nissan of St. Charles employees who made voluntary contributions from their pay from Jan. 1 through Jan. 31, 2019.

The lost opportunity cost amount allocated to each participant shall be based on the participant’s percent of the total contributions owed to them, according to the court filing.

The judgment also prohibited Vargason and the company from future violations and barred them from serving as fiduciaries or service providers to any ERISA-covered employee benefit plan in the future.

The court also appointed AMI Benefit Plan Administrators Inc. as the independent fiduciary to allocate the restoration to harmed plan participants’ accounts, the release stated.

Vargason also must pay $2,060 to AMI for its services and a penalty of $2,754.45 as a result of the ERISA violation, according to the court record.

The Illinois Secretary of State Police shut down Vargason’s Nissan dealership on Feb. 1, 2019, following hundreds of complaints that customers had not received the titles and plates for their vehicles.

A message left with an attorney representing Vargason, who now lives in Iowa, was not returned.

Kane County