(GREENBELT, MARYLAND) - The U.S. Department of Labor (USDOL) has obtained a consent judgment requiring a Health and Welfare Benefits Administration Firm, its owner and others to restore more than $4.4 million in fringe benefits owed to people employed by Government Service Contractors across the U.S.

The U.S. District Court for the Southern Division of the District of Maryland entered the judgment following litigation by the USDOL’s Office of the Solicitor.

Investigators with the Department’s Employee Benefits Security Administration (EBSA) found Axim Fringe Solutions Group LLC, Majority Owner James Campbell and the Firm’s Director of Compliance Accounting Melissa McManes misused funds from Fringe Benefit Plans.

Campbell and McManes used fringe benefits due to the Employees of Axim’s Government Contractor Clients to pay the clients’ expenses from December 2015 to June 2022, violating the Employee Retirement Income Security Act.

EBSA also determined Axim, Campbell and McManes violated the McNamara O’Hara Service Contract Act by charging clients’ Employees for their fringe benefits instead of charging its clients for employer administrative costs of fringe benefits.

By law, Axim’s clients - Government Service Contractors - must pay Employees who work on certain Federal Service Contracts a minimum amount of wages and fringe benefits. 

Employee Benefits Security Administration Deputy Regional Director Norman Jackson said: “The law is clear. Employee contributions cannot be used to pay for employers’ costs related to Employee Benefit Plans.  Axim Fringe Solutions Group illegally put the interests of their clients ahead of their clients’ employees by using Workers’ hard-earned wages to pay for their employers’ costs.”

EBSA found that the firm, Campbell and McManes misappropriated over $5 million in payments from their clients’ Employees by transferring fringe benefit contributions from the Employee Trust Accounts to Axim’s operating account.

These transfers delayed payments of health insurance premiums, leading some insurers to send the contractors late payment notices. 

Axim restored more than $1.5 million to the trust accounts before the court entered the consent judgment. 

To Continue Reading This Labor News Story, Go To: US Department of Labor obtains judgment ordering service provider, its owner to restore more than $4.4M in fringe benefits | U.S. Department of Labor (dol.gov)