Edina tech firm ordered to pay back in $29,500 in 401K contributions to employees

The Edina-based technology consulting company Virtual Matrix Corp has been ordered to pay back over $29,500 to employees.

This comes after the Secretary of Labor filed a lawsuit on August 30 last year that claims that Virtual Matrix Corp and CEO Suman Thotakura failed to confer employees' salary contributions and loan repayments to the 401K accounts held by Virtual Matrix covering a period from April 30, 2021 to June 30, 2022.

A default judgment was entered by the U.S. District Court of Minnesota on July 19 that ordered the company pay back $24,847 in voluntary salary contributions that were not recorded, $759 in loan repayments and $3,955 in lost opportunity costs.

The judgment also permanently bans Virtual Matrix and Thotakura from serving or acting in any employee benefit plan and removing it from any positions they previously held.

The court appointed AMI Benefit Plan Administrators Inc. to assist in terminating the plan and issue the money to the employees' 401Ks, with $29,562 taken from Thotakura’s individual account to pay back his employees.

“The court’s action restores to participants their voluntary salary contributions that they trusted were earning interest to prepare for their future,” said Employee Benefits Security Administration Regional Director Mark Underwood..

"Failing to forward voluntary employee contributions to employee retirement plans violates their trust and directly impacts their retirement savings."