Judge Orders Old Elmhurst Preschool To Pay Employee Retirement Funds

ELMHURST, IL – The owner of a now-defunct Elmhurst preschool has yet to comply with a judge's order to pay more than $40,000 to make her employees' health and retirement plans whole, according to federal court records.

Colleen Odegaard, owner of the Elmhurst Academy of Early Learning, has told the U.S. Department of Labor she has information that shows she owes nothing, but she has missed repeated deadlines to provide it, court records state.

In an October filing, U.S. District Judge Steven Seeger said Odegaard must pay $31,000 to the independent retirement account plan and $11,350 to the health plan.

Odegaard was required to show proof of the canceled checks within seven days. But as of a status report last week, she had not paid the money.

Eight employees were affected by the problems with the retirement plan, according to court records. More than half the $31,000 was money designated for Odegaard herself, though she is required to pay everyone else before herself.

As for the health plan, six employees were impacted, according to court records.

Odegaard has never responded to the lawsuit with a lawyer, which is required for a corporation such as Elmhurst Academy. In October, the judge stated in a filing that Odegaard's response was "long overdue."

Odegaard has not returned Patch's messages.

In an email to Patch in April, Odegaard called the allegations that she mishandled health insurance and retirement contributions "100 percent false."

"The Simple IRA contributions were to be made to my personal account in Colleen Odegaard’s name," Odegaard said. "The school chose not to fund me personally. Nothing to do with employees."

While the federal government asserted Odegaard failed to respond, she said the case had been "worked out" and "an explanation has been given."

In its lawsuit, the Labor Department alleges the academy, which closed in 2021, failed to properly handle employees' health insurance and retirement contributions.

In July 2021, the academy's health insurer, Blue Cross Blue Shield of Illinois, canceled insurance coverage retroactively to May 2021 because of missed premium payments, the lawsuit said.

Despite the cancelation, the academy withheld more than $10,000 from employees' pay for insurance premiums and kept the money in its bank account, according to the lawsuit.

For certain payroll periods from 2016 to 2021, the preschool withheld $19,000 from employees' pay for contributions to their independent retirement accounts, but the academy never sent the money to the accounts, instead spending it on the preschool's operations, court documents state.

Under federal law, such contributions are supposed to be remitted to the plan soon after they are received.

From 2016 to 2021, the academy repeatedly failed to send tens of thousands of dollars in contributions to employees' retirement accounts promptly, the lawsuit said.

The academy, which started in 1981, was at 212 W. Lake St.

In a 2021 interview, Odegaard said the school was suffering from staffing shortages and delayed payments from the state government.

Earlier this year, a new preschool called Fia Mia Academy opened in the building. Fia Mia said it has no affiliation with the previous ownership.