Baltimore Behavioral Health, or BBH, is a drug treatment and mental health clinic on West Pratt Street that filed for bankruptcy protection from its creditors last year. It also was the subject of a 2010 investigation by The Baltimore Sun, which uncovered unusually high Medicaid billings and steep salaries among the family members who at the time controlled the Baltimore nonprofit.
The Labor Department's lawsuit, filed Nov. 1 in Baltimore's U.S. District Court, alleged that former CEO William Kristen Hathaway did not forward workers' contributions into the retirement plan from October 2009 through April 2010.
"In addition," the suit alleged, "because BBH and Hathaway consistently remitted contributions only three to four times a year since the plan's inception, contributions were consistently remitted late and without interest."
And Hathaway and BHH didn't segregate workers' money from the clinic's assets, the lawsuit stated. The agency also said that Hathaway and BBH concealed actions that they knew violated pension law.
Hathaway and officials with BBH could not be reached for comment Monday.
The retirement plan was created in January 2005 and allowed workers to make contributions through payroll deduction.
The suit stems from an investigation by the Labor Department's Employee Benefits Security Administration.
The Labor Department asked the court to force Hathaway to restore workers' money, as well as any interest or lost opportunity costs. And if Hathaway has an account balance in the plan, the Labor Department wants that money to be used to offset losses sustained by plan participants.
It also wants Hathaway permanently barred from any control over an employee benefit plan that falls under federal pension law. The agency asked that an independent fiduciary be appointed to administer the plan, with the ability to collect assets and pursue claims on behalf of the retirement plan.
This isn't the only lawsuit related to the BBH retirement plan.
Participants in the plan filed a lawsuit in 2011 against BBH and Hathaway, also claiming worker contributions hadn't been deposited in the retirement plan.
According to one court document filed on behalf of workers in that suit, "All plan participants suffered substantial financial losses in both 2009 and 2010 as a result of the diversion and theft of employee contributions that should have been placed in the retirement and disability plans."
The defendants failed to respond, and the court issued a judgment in March in favor of the employees, awarding them nearly $50,000 plus attorney fees.
Attorney Richard Neuworth, representing about 72 workers, most of whom no longer work at BBH, said his clients haven't been able to collect what they are owed.
Asked about the Labor Department's lawsuit, Neuworth said, "I don't think they are going to get any further than we are."