$2 Million Payment Ordered For NJ Design Firm Owners In Retirement Fund Case

MOORESTOWN, NJ — Owners of a Moorestown design firm will have to pay almost $2 millionto the company retirement plan after a court ruled that they mismanaged employee assets, the U.S. Department of Labor said.

Shirley and Vernon Hill invested InterArch Inc. retirement plan assets into Metro Bank and Republic Bank, companies where they had "significant ties," the Labor Department said and court documents show.

The Hills, as trustees of the InterArch Inc. Profit-Sharing Plan, violated their duties under the Income Security Act from 2016-2020, the Labor Department's Employee Benefits Security Administration found.

"The plan’s position in the stock of (Metro Bank) reached almost 70 percent of the plan’s portfolio before it fell drastically in value, resulting in millions of dollars in losses to the plan," the Department of Labor said in a news release.

InterArch Inc. and the Hills "engaged in self-dealing and violated their duties of loyalty and prudence and their duty to diversify, which caused the plan to enter into prohibited transactions," officials said.

Employer contributions made up most of the company's retirement plan, the news release said. A court ordered that InterArch Inc. and the Hills will have to pay $1,836,853 to plan participants and $183,685 in penalties "to resolve the allegations."

Vernon Hill is the former CEO of Cherry Hill-based Commerce Bank and was recently ousted as chairman of Republic Bank, headquartered in Philadelphia. He is the founder and former chairman of Metro Bank, based in the UK.

Patch reporting when InterArch first was founded named Shirley the owner of the firm, which specialized in architecture, interiors, and branding. Court records show she was InterArch's President, CEO, and sole owner as well as the sole named trustee of the plan during the time period in question.

Vernon Hill "exercised effective control" of the plan assets through his advice to his wife and directed her to invest money in ways that would benefit him, officials said.

InterArch Inc. and the Hills will pay another $1.1 million to the retirement plan to settle another lawsuit filed by a former employee.

"In total, between the department’s settlement and the private class action lawsuit settlement, more than $3 million will be restored to the retirement plan," officials said.

The Employee Benefits Security Administration's Office of the Solicitor in New York filed a complaint against Interarch and the Hills in the U.S District Court, New Jersey district.

According to the Department of Labor, the InterArch Inc. Profit Sharing Plan was effective from Nov. 1, 1976 and terminated on June 30, 2020. It was a defined contribution profit sharing plan funded primarily by employer contributions.