A federal court approved a $10.98 million settlement between the Labor Department and the Plumbers and Pipefitters National Pension Fund, Alexandria, Va., over allegations that trustees improperly managed the fund's investments in a Florida resort and country club. The settlement, approved by U.S. District Court in Fort Lauderdale, Fla., also calls for the ouster of four fund board trustees. The bulk of the penalties - $9.15 million - will go to the pension fund as restitution.
The lawsuit, filed by the Labor Department in September 2002, claimed trustees violated their fiduciary duty by imprudently managing the fund's investment in the Diplomat Resort and Country Club in Hallandale, Fla. Ousted from the board are Martin J. Maddaloni, president of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitters Industry of the United States and Canada; Thomas Patchell, general secretary and treasurer of the plumbers union; Charles H. Carlson, former chairman of Industrial Piping Co.; and James House, part owner of J.A. House Inc., a bankrupt refrigerant manufacturing corporation.