Feds Sue Yardley Attorney Over 401(k) Funds

The U.S. Department of Labor announced Wednesday it is suing a Yardley attorney and his law firm for failing to properly handle employee contributions to the firm’s retirement plan.

The suit alleges that, between January 2007 and March 2009, attorney Richard J. Kwasny and the firm, Kwasny & Reilly PC, failed to ensure that employee contributions were deposited into the firm’s 401(k) plan. Instead, the payroll deductions were added to the general assets of the firm and used to pay the firm’s expenses, the lawsuit states.

The suit doesn’t say how much money the case involves, but asks a judge to order Kwasny and the firm to turn over all records pertaining to the 401(k) plan, and to restore all losses, plus interest. It also seeks to prevent them from serving as 401(k) plan administrators in the future.

When reached Wednesday evening, Kwasny said he was stunned to hear about the DOL lawsuit.

“I have no idea what they’re talking about,” he said. “It’s an absolute, 100 percent total shock.

“If you knew me, you’d know there was no way this would ever happen,” he added.

He declined to comment further on the lawsuit.

In an unrelated matter, Kwasny’s Pennsylvania law license was suspended last month for five years by the state Supreme Court’s Disciplinary Board, records show .

In that case, the board alleges, Kwasny continued to practice law despite being placed on administrative suspension in 2010 for failing to register with the state, and didn’t inform clients he had been suspended. The board also found that Kwasny mismanaged escrow funds belonging to several clients, and submitted altered documents when questioned about some of those accounts by a review board.

Kwasny said Wednesday he had heard about the suspension, but he hadn’t been formally notified. The board said Kwasny didn’t attend the disciplinary hearing held last year, despite being granted a seven-day continuance.

By Crissa Shoemaker DeBree Staff writer