Charitable fund lawyer helped ex-director siphon off money, lawsuit alleges

Illinois attorney tapped into client United Employee Benefit Fund assets to help ex-director stay home, earn $300,000 salary and misappropriate other amounts, new United director claims hiring.

Attorney L. Steven Platt violated the Employee Retirement Income Security Act and engaged in professional negligence, as Scott Mayer, a Colorado attorney who assisted him, the administrator alleges in a lawsuit filed Tuesday in U.S. District Court for the Northern District of Illinois. Platt therefore owes the fund approximately $3.4 million, the complaint states.

United collects a portion of union employees’ wages to provide them with health insurance and other benefits, the court heard. Henry Sledz, who joined United as a director in November 2021, alleges Platt failed to disclose a conflict arising from his company’s representation of trustee Herbert O. McDowell. McDowell’s interests were allegedly opposed to those of United.

Platt “knowingly provided poor legal advice to the Fund to facilitate breaches by McDowell, as trustee, of its legal obligations and other duties to the Fund,” Sledz said. The fund believed Platt to be “one of the most eminent ERISA legal experts in the country,” he says.

Platt and his company at the time, Robbins, Salomon & Patt Ltd., reportedly informed the fund that he could hire McDowell, then a trustee, as a service provider for a salary of $300,000. They also allegedly arranged a loan to avoid foreclosure on McDowell’s house, and later money to buy it after the 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 lawsuit by the Department of Labor for violation of ERISA; and reimbursement of attorney’s fees.

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

Lawyers: Dressler & Peters LLC represents Sledz.

The case is Sledz v. Platt, ND Ill., No. 1:22-cv-00952, Complaint 2/22/22.

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