Operators of the defunct Associated Plastic Fabricators Inc. are accused of depleting the firm's profit-sharing and pension plans of $2.01 million, leaving 33 employees without retirement funds.
Several former employees filed a lawsuit against the Gurnee, Ill., injection molder and extruder and its executives last year in U.S. District Court in Chicago, claiming the firm's operators spent the money on personal endeavors, court records show.
On June 28, the Department of Labor made similar accusations in a lawsuit against Associated Plastic Fabricators, its president, C. Bryce Peper, and his wife, Betty; Gregory Peper, vice president and chief executive officer, and his wife, Meredith; and E. Lee Pinney, an employee of the now-defunct company's brokerage firm.
Associated Plastic had sponsored a 401(K) profit-sharing plan as well as a pension plan, which had a total balance of more than $2.01 million when it laid off its employees in January 1998. The firm closed a short time later.
Prior to May 19, 1998, the plans' participants were able to direct their money into various investments.
However, after that date, C. Bryce Peper started using the money for various personal investments through a $1.8 million deal with Twenty First Century Growth and Income Fund LLC, a company formed by his son, Gregory Peper, according to the Labor Department's complaint.
Meredith Peper allegedly used $1 million of the retirement funds to pay off a loan on a Telluride, Colo., property. The complaint said another $521,775 was used to purchase 102,000 shares of stock in World Airways, which lost its value within a month of the transaction, and the remaining funds were used for Associated Plastic operating costs and a smaller investment.
Though some of the money has been recouped, the Labor Department's suit calls for a court order forcing the defendants to repay the entire amount with interest.
The Telluride property was auctioned off in August 1998 for $850,000, which now is in an escrow account, Michael Lauzon, a lawyer for some of the former employees, said in a Chicago Daily Herald story. Gregory and Meredith Peper filed for Chapter 7 bankruptcy in March.
The World Airlines stock currently is worth about $150,000 and is in a frozen account along with another $100,000 being held by a brokerage firm, he said.
The lawsuit filed by the employees is funneling through the court system.