Benefit Fund’s Lawyer Helped Ex-Trustee Siphon Money, Suit Says

An Illinois lawyer dipped into the assets of client United Employee Benefit Fund to help an ex-trustee stay in his home, earn a $300,000 salary, and improperly divert other amounts, a newly hired United administrator alleges.

Attorney L. Steven Platt violated the Employee Retirement Income Security Act and committed professional negligence, as did Scott Mayer, a Colorado attorney who aided him, the administrator alleges in a complaint filed Tuesday in the U.S. District Court for the Northern District of Illinois. Platt consequently owes the fund about $3.4 million, the complaint says.

United collects a portion of union employees’ wages to provide them with health insurance and other benefits, according to the court. Henry Sledz, who joined United as administrator in November 2021, alleges that Platt failed to disclose a conflict stemming from his firm’s representation of the trustee, Herbert O. McDowell. McDowell’s interests were allegedly adverse to United’s.

Platt “knowingly provided poor legal advice to the Fund to facilitate McDowell’s violations, as Trustee, of his statutory obligations and other duties owed to the Fund,” Sledz says. The fund believed Platt was “one of the nation’s most preeminent ERISA legal experts,” he says.

Platt and his firm at the time, Robbins, Salomon & Patt Ltd., allegedly advised the fund that it could hire McDowell, then a trustee, as a service provider for a $300,000 salary. They also allegedly arranged for a loan to avoid foreclosure on McDowell’s home, and later money to purchase it after foreclosure.

Causes of Action: Breach of fiduciary duty under ERISA; professional negligence.

Relief: Restoration of lost funds; compensatory damages; declaratory judgment related to a potential Department of Labor suit over ERISA violations; and disgorgement of attorneys’ fees.

Response: Neither of the attorneys, nor the successor to Platt’s firm, immediately responded to a request for comment.

Attorneys: Dressler & Peters LLC represents Sledz.

The case is Sledz v. Platt, N.D. Ill., No. 1:22-cv-00952, complaint 2/22/22.