DOL recovers nearly $220 million to compensate employee benefit plans and others impacted by Madoff’s Ponzi scheme

The Labor Department has announced a settlement that includes the payment of nearly $220 million to compensate employee benefit plans and other investors that suffered losses through investments in Bernard L. Madoff’s Ponzi scheme. The settlement is pending approval by the U.S. District Court for the Southern District of New York and resolves department litigation, actions brought by New York’s attorney general, and several private lawsuits and class actions brought on behalf of plans and other investors that invested with Madoff.

The DOL sued Ivy Asset Management LLC, J.P. Jeanneret Associates Inc., Beacon Associates Management Corp., Andover Associates Management Corp., and their current and former owners and officers for alleged violations of ERISA. The suit alleged that they breached their fiduciary duties to a number of benefit plans by recommending, making and maintaining investments with Madoff, thus losing hundreds of millions of dollars in assets needed for the pension and health benefits of thousands of workers.

The settlements resulted from investigations conducted by the New York and Boston regional offices of the Employee Benefits Security Administration (EBSA). Litigation was conducted by the Plan Benefits Security Division of the DOL’s Office of the Solicitor in Washington, D.C. Workers in employer-sponsored health and retirement benefit plans who feel that they have been denied a benefit inappropriately, or have questions about benefits laws, can contact an EBSA benefits adviser by visiting or calling 866-444-EBSA (3272).

Source: Department of Labor News Release No. 12-2100-NAT, November 13, 2012.

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For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer’s Benefits Reports.

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