The Labor Department is suing Atlanta-based Aliera Companies and its CEO, Shelley Steele, for allegedly violating the Employee Retirement Income Security Act by paying themselves and affiliated companies with health plan assets.
The lawsuit filed May 27 alleges that the payer, formerly known as Aliera Healthcare, paid itself and affiliated companies from ERISA-covered plans' assets without agreement or notice to the employer plan sponsor or participants.
The payments originated from the payer's corporate account that reportedly contained commingled payments from over 1,000 ERISA-covered employer group plans and individuals with Aliera coverage.
"The payments that defendants made to Aliera, Steele and affiliates … were all prohibited transactions, and totaled more than $102 million. Approximately 3.14 percent of those payments came from the assets of ERISA plans," the federal department claimed in court documents.
The lawsuit claims Aliera and Ms. Steele were fiduciaries, service providers and parties in interest under ERISA for the employer group plans. Aliera and Ms. Steele allegedly made payments of around $84 million back to the company and about $6.1 million directly to Ms. Steele from the payer's corporate account. Aliera also took loans from the corporate account for Ms. Steele, which totaled about $3.8 million, according to court documents.
Burdette Atlanta, a company majority-owned by Ms. Steele, received $100,000 in payments that were allegedly spent on mortgage payments for Ms. Steele's personal residence. A payment of $28,333 was also made to Ms. Steele's husband's credit card. Another $6.5 million was sent from the corporate account to Ciel Capital Group, which Ms. Steele reportedly owned. The lawsuit claims that three other Aliera subsidiaries received a combined total of about $1.3 million.
The Labor Department claims the payments are classified as self-dealing and are in violation of ERISA. It is seeking a full refund of all payments given to Aliera, Ms. Steele and affiliates. The department is also seeking permanent disbarment from acting as fiduciaries or service providers to any ERISA-covered plan and wants to prohibit them from violating Title I of ERISA in the future.