The companies' funds, which total nearly $700,000 and cover about 200 participants, form part of the Contractors Benefit Trust in Manhattan. Eleven of the companies are located around New York State.
The current administrator, attorney Steven Coren, pleaded guilty in March to laundering funds collected from employers to comply with the Davis-Bacon Act requirement that companies with federal contracts pay workers prevailing wage and fringe-benefit rates, the U.S. attorney's office in Brooklyn said in an earlier news release.
The fund deposits made it seem as if the employers were complying with Davis-Bacon, but Coren told them they could use the money for other purposes, the U.S. attorney's office said.
With a criminal conviction, he cannot administer the benefit plans, and the employers haven't moved to appoint a new trustee, the Labor Department said. So it is suing to appoint someone. The department filed its suit last month in U.S. District Court in Brooklyn.