Fund misappropriation alleged at LV company

Tuesday, July 8, 2003 | 11:21 a.m.

The U.S. Department of Labor has filed a complaint in U.S. Bankruptcy Court in Las Vegas to protect money owed to a retirement plan of a defunct food delivery company.

The federal agency filed a complaint last week in a Chapter 7 bankruptcy case involving Robert Marc Raskin, the former owner and president of Quality Home Foods Inc. QHF, which provided home delivery of meats, produce and other foods, discontinued operations last year.

Raskin also was a fiduciary of the company's 401(k) retirement fund operated for 27 former employees, according to a court filing.

Raskin filed for personal bankruptcy protection Jan. 15, listing assets of $24,598 and debts of $10 million, which included home mortgages, credit card debt and expenses associated with the QHF business. The largest creditor in the case is Cendant Mortgage Corp., which is owed a total of $5.5 million on two home mortgages.

The Labor Department complaint says Raskin did not act in the best interests of the retirement plan when he did not forward $17,000 to the account in employee contributions, participant loan repayments and employer matching contributions. The complaint alleges that he used that money to pay company expenses.

The complaint says Raskin "misappropriated employee contributions by allowing contributions withheld from employee paychecks to be retained in corporate accounts, commingled with corporate assets and used to pay corporate expenses other than QHF's obligations to the plan."

The filing also said "by misappropriating employee contributions to his own benefit and by failing to take action to collect employer contributions and loan repayments, the defendant debtor's actions constituted fraud and defalcation" under bankruptcy law.

Raskin could not be reached for comment, but his attorney, James Greene, Las Vegas, said he and Raskin have not had access to QHF's financial records since July of last year and they could not review allegations made in the Labor Department's complaint.

"He (Raskin) was forced out of QHF in July of last year and he was not able to take any business records with him," Greene said Monday.

He said Raskin believed that all funds due the retirement plan had been properly deposited and accounted for, but he has no way of checking.

"We haven't seen the Department of Labor documents, so we have no way of reviewing the allegations in the complaint," Greene said. "If they are correct, we may try to settle with them and have those amounts paid and do what we can to make sure the employees get what is due them."

Greene said Raskin is no longer in the food delivery business.

The Labor Department says debts owed to pension and retirement plans by fiduciaries cannot be discharged when the fiduciary files for Chapter 7 bankruptcy if the debt involved misappropriation of the pension funds.