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Owner of 2 former Jenny Craig franchises ordered to repay retirement money he kept from employees

The owner of a former Jenny Craig weight loss franchises in Williamsville and Orchard Park has been ordered to pay back more than $8,600 in money he collected from employees but never deposited in their retirement accounts.

Richard C. Herring of Wellesley, Mass., was ordered to pay back the $8,646 that he withheld from the paychecks of 26 employees in the two Buffalo Niagara locations and at six other sites in upstate New York as contributions for their retirement accounts.

He also must pay a 20 percent penalty, or $1,729, and interest on the unpaid balance of the funds, which must be repaid over a two-year span beginning this month, according to the terms of a consent judgment filed in U.S. District Court in Boston.

Herring was the owner of Central NY Weight Loss, a Liverpool-based business that also owned Jenny Craig franchises in Rochester, Albany, Fayetteville, Latham, Penfield and Henrietta. A Labor Department spokesman said he did not know how many workers were affected at the Orchard Park and Williamsville sites.

A complaint filed by the U.S. Labor Department said that Herring collected money from employee paychecks that he was supposed to deposit in the workers’ retirement accounts under a plan that was established in May 2012. But on five pay periods between June 2012 and October 2013, Herring did not put the money that was withheld in the retirement accounts, the Labor Department said.

The Jenny Craig franchises closed in January 2014. Herring, who was the retirement plan’s trustee, filed for personal bankruptcy in May 2014, but he was not allowed to have the debt to his former employees discharged in the bankruptcy proceedings under the terms of a November agreement with the Labor Department.

Under the terms of the consent judgment, Herring is required to make 24 monthly payments, beginning at $250 and gradually increasing to $415, to repay the debt.

email: drobinson@buffnews.com