The U.S. Department of Labor has sued -Maggio-Onorato & Associates Inc., alleging the Towson-based company and its owners reaped $10 million in illegal commissions on insurance policies it sold to employee-benefits plans it administered for 300 home health care agencies.
Filed in U.S. District Court in Baltimore, the suit alleges that Andrew Maggio and Richard Onorato, as administrators of the benefit plans, broke federal pension plan laws by collecting the insurance commissions at the same time they were receiving management fees. Benefit-plan administrators are entitled to reasonable fees, but not also commissions on the policies purchased to fund the programs.
"That's self-dealing," said Sharon Morrissey, spokeswoman for the Labor Department's Pension and Welfare Benefits Administration in Washington.
The commissions allegedly received by Maggio and Onorato included money, trips to Europe and Australia and stock in one of the insurance companies whose products they sold to the benefit plans, according to court papers filed Friday.
Maggio-Onorato "has strong defenses to these allegations and will present such defenses," said Don Alexander, a member of a Washington law firm representing the Towson company.
Maggio and Onorato could not be reached for comment.
The Labor Department says Maggio-Onorato & Associates markets death and severance-pay benefits plans to home health care agencies, organizations that help families look after shut-ins, seniors and those recuperating at home from serious illnesses or surgery. The health care companies were located throughout the country.
The Towson company serves as the plan administrator, a legal designation that carries with it duties delineated under federal pension-plan laws.
The benefit programs are funded with life-insurance policies selected by the company and -- paid for by the home-health agencies -- that Maggio-Onorato is alleged to also have received commissions on selling.
From 1991 to last year, those illegal commissions totaled $10 million, the suit alleges. Some of those commissions included stock in Aegon N.V., parent to one of the underwriters Maggio-Onorato selected products from, court papers state.
The Labor Department typically first pursues these cases as civil actions -- and not criminal cases -- though can also do the latter, said Jane M. Roller, a government attorney involved with this case. She would not say if criminal action is also being considered.
Pub Date: 12/19/97