Feds Sue Defunct Software Biz for $26K

The U.S. Labor Department is suing a downtown Marietta software company almost a year and a half after the state declared it dead.

The Labor Department says defunct By Design Consulting and owner Randall Williamson Smith owe almost $26,000 to employee 401(k) retirement accounts.

“Employees should expect that their hard-earned savings will be properly managed when they contribute to retirement plans,” Isabel Colon, the Atlanta regional director of the Labor Department’s Employee Benefits Security Administration, said in a news release.

An EBSA investigation uncovered the violations of the Employee Retirement Income Security Act, known as ERISA, the Labor Department reported.

According to the lawsuit filed in U.S. District Court in Atlanta, By Design Consulting owes the company’s 401(k) plan $25,978.39:

• Most of it, $23,737.50, covers employee contributions the company failed to add to the plan between August 2006 and April 2009.
• The rest, $2,240.89, accounts for money withheld from an employee’s paycheck as partial repayment for a loan of $14,919.03 taken from the retirement plan. That money never made it back into the plan.

By Design Consulting was founded in November 1993. It sold and installed computer software.

Georgia Secretary of State Brian Kemp administratively dissolved the company Sept. 10, 2010, for failure to file its annual registration. That registration would have cost $30.

Smith was the sole officer of the Church Street company, according to filings with the Secretary of State’s Office.

The lawsuit, Solis vs. By Design Consulting Corp. (Civil Action File No. 1:12-cv-0360-MHS), asks the court to take the missing 401(k) money from Smith’s individual retirement accounts unless he otherwise makes up the difference.

The lawsuit also alleges that the company was slow to make payments to the 401(k) plan, sometimes hanging on to employee contributions for more than a year in the period from May 2005 to April 2009.

In short, the lawsuit says, By Design Consulting handled the 401(k) assets for its own benefit, violating ERISA.

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