The Labor Department sued Trust Fund Advisors and its parent, ULLICO, for investing more than $10 million in assets of two union pension funds in a failed real estate project. TFA was investment manager for the two pension funds of the Laborers International Union of North America, Washington, in the early 1990s. The plans have combined assets of more than $1.3 billion.
The lawsuit, filed in U.S. District Court in Washington, alleges TFA and Union Labor Life Insurance Co. used the plans assets to purchase and develop land in North Las Vegas, Nev., but failed to investigate the project and ultimately abandoned it in 1997 without selling any lots. The land was sold in June 1999 to Capital Pacific Holdings for less than their investments. The Labor Department wants to recover the funds losses, plus interest, and prevent similar situations in the future, according to a news release.
Joe Carabillo, vice president and chief legal officer at TFA, could not be reached for comment by press time.