CHARLESTON, S.C. (WCSC) — Several former employees of a now-defunct Lowcountry pediatric office claim the company has withheld tens of thousands of dollars in their retirement savings, and the company says it’s paying them back.
Coastal Pediatric Associates took care of thousands of kids before the Medical University of South Carolina bought them out last year. But toward the end of its run, former human resources director Donna Howard says trouble was brewing behind the scenes.
She says it first came to light when an employee approached her in 2024.
“The money that we had taken out of her paycheck for her 401(k) wasn’t matching what was in her 401(k) account,” Howard said. “…After I did some research and pulled up her account, realized she was right… We had withheld her contributions from her check and then none of it was deposited into the account. It turned out to be a pretty widespread problem that no one had received their deposit.”
That’s when Howard started asking questions.
“I went to the CEO and said, ‘What’s going on?’” Howard said.
She was asked what was said in response.
“‘We don’t have the money,’” Howard said. “So, of course, my natural response was well, we do have the money because we withheld it from the employees’ paychecks.”
Coastal Pediatric Associates had several locations across the Lowcountry, including one on James Island, which are now all owned by the Medical University of South Carolina.(LIVE 5 NEWS)Coastal Pediatric Associates admits to missed payments
After numerous complaints were filed, the Department of Labor started to investigate. Documents allege Coastal Pediatric Associates’ partners failed to invest employees’ 401(k) contributions and company matches, leaving them without that money or the interest it could accrue.
Howard says over 90% of the around 250 employees at Coastal Pediatric were a part of that 401(k) plan.
One DOL employee’s notes say CPA’s attorney told them the four partners owe about $627,000 to company employees as of January, not counting what has been accrued since then.
One Department of Labor employee’s notes say CPA’s attorney told them the four partners owe about $627,000 to company employees as of January, not counting what has been accrued since then.(LIVE 5 NEWS)
When asked about the missing money, CPA’s attorney Jim Rourke sent the following statement on June 12:
The partners acknowledge that plan participants (including the partners) have missed deferrals and required matching contributions to Coastal Pediatric Associates’ 401(k) Plan. These errors occurred as a result of a failure in Plan administration and oversight and was certainly not an intentional act taken by the partners, who were not tasked with the day-to-day administration of the Plan and instead were practicing pediatricians.
They have been working diligently with the Plan’s third-party administrator, accountants, attorneys and the Department of Labor to ensure total accuracy and that everyone receives exactly what they are owed. The process has involved auditing Plan contributions for each year at issue and comparing what was actually deposited into participants’ Plan accounts with what should have been deposited based on the terms of the Plan. We are also fully vesting each participant in their matching contributions, regardless of their years of service. Once those missed deferrals and match are funded, we have directed the Plan’s recordkeeper to calculate lost earnings on those contributions based on participants’ investment elections. The partners remain fully committed to fully resolving this unfortunate matter.
Howard says she alone is out about $4,500. And another former employee has even filed a lawsuit saying she alone is owed over $4,000 in her 401(k), plus lost earnings.
Department of Labor documents show chain of promises
On top of the DOL investigation, nearly a dozen other lawsuits have been filed against Coastal Pediatric claiming the company and its partners, Dr. Kimberly Caristi, Dr. Stephen Stripling, Dr. Robert Clifford and Dr. Elizabeth Kirlis, failed to pay months of rent, medical products, cleaning services and more.
These filings claim they owe nearly $2 million to various people and businesses.
Nearly a dozen lawsuits have been filed against Coastal Pediatric, claiming the company and its partners, Dr. Kimberly Caristi, Dr. Stephen Stripling, Dr. Robert Clifford and Dr. Elizabeth Kirlis, failed to pay months of rent, medical products, cleaning services and more.(LIVE 5 NEWS)
Howard says she warned employees about what was happening.
“It was my strong advice that they cancel their contributions to the 401(k) plan,” Howard said. “…Many people did. Others did not.”
She also warned the CEO and the partners about what they owe in an email sent in December 2023. The email says Howard and the CEO even “deferred their own payroll multiple times to pay those who needed it more,” adding, “I implore you to remember the reason CPA exists, ‘for the kids.’”
“I thought that I could make a more impact, a bigger impact to fix the problem,” Howard said.
And these promises have been going on for years.
One email signed by all four partners to the impacted employees in August of last year said they would have it resolved “within 60-90 days.”
And a DOL employee’s notes said it would be “made whole within the month of November 2025.”
“We’re now fast-forwarding into 2026,” Howard said. “The money has not been paid back.”
But now, some of it has.
Former employees start to see deposits after Live 5 asks questions
After Live 5 began asking questions about where the 401(k) money is, at least seven employees, including Howard, say they started receiving deposits into their bank accounts as of June 22.
Rourke sent an additional statement Monday, further addressing these concerns:
As indicated previously, the partners acknowledge that failures occurred in connection with employee deferrals and employer matching contributions to the Coastal Pediatric Associates’ 401(k) Plan. These failures were the result of a breakdown in plan oversight and administration and were not intentional actions on the part of the partners.
It is important to emphasize that responsibility for plan administration is a fact-specific legal determination that has not been established merely by virtue of being a physician shareholder or owner of a professional corporation. We respectfully encourage a careful and fair distinction between allegations concerning Coastal Pediatric Associates, PA as an entity and any conclusions regarding the personal legal responsibility of individual shareholders. To the extent your reporting identifies individuals, we ask that it avoid implying personal legal responsibility unless such a conclusion is supported by the facts or established through the process of law.
Please note that within the last two weeks, all outstanding employee deferrals and the match obligations for the plan years 2023 through 2025 have been deposited into participants’ accounts. The partners are actively working to fund the remaining 2022 match contribution and associated lost earnings. We understand that this correction process has taken longer than anyone anticipated, and we sincerely regret any inconvenience or concern caused by these delays. Nevertheless, we remain fully committed to completing a full and fair resolution as soon as possible.
This matter remains under review by the Department of Labor, thus I am unable to provide further comment at this time. I appreciate your understanding and your commitment to accurate and responsible reporting.
After receiving this statement, Howard was interviewed a second time. She says that out of the $4,500 she claims she is owed, she says she’s only received about $800.
“As of now, I personally have received less than half of what was actually owed to me,” Howard said.
Plus, she says she still needs the accrued interest. Other former employees have confirmed they, too, have received partial repayments but are still awaiting additional funds as of Thursday.
CPA says its partners are actively working to fund the remaining 2022 match contribution and associated lost earnings, adding, “We understand that this correction process has taken longer than anyone anticipated, and we sincerely regret any inconvenience or concern caused by these delays.”
“I think them getting wind of the fact that a reporter is looking into this definitely got their attention,” Howard said.
Howard resigned from Coastal Pediatric in May 2024. And since then, she says she has been trying to help around 150 other employees know what they’re owed.
“The fact that you’re a great pediatrician doesn’t make you a good business owner,” Howard said. “…It should have never come to this… We will continue to fight.”
Coastal Pediatric Associates’ former human resources director, Donna Howard, shows pay stubs and email receipts she has with the company and other employees.(LIVE 5 NEWS)Discovering who can be held accountable
And while this fight has been going on for some time, Howard says she and several former colleagues had already reached out to attorneys, local police, the Solicitor’s Office, the Attorney General and even the FBI for help.
“No one will touch it,” Howard said. “…The only way to sue them for our money is through an attorney, which we do not have… Young women who made $17, $18 an hour raising kids on their own, trying to recover, you know, $5,000, and it’s going to cost them $20,000 for an attorney. It’s not going to happen.”
After reaching out to each of these parties, the Attorney General’s office pointed to the Solicitor, who pointed to local law enforcement, which then said to file a lawsuit.
A federal law enforcement official says the Department of Labor would have to work with the Department of Justice to pursue a criminal or civil investigation, if needed.
When asking the DOL where this case stands right now, they said they were “unable to provide any updates without an active FOIA request.” That has since been filed.
Howard says knowing this happened has been a hard pill to swallow.
“Without a single thought to the people that worked for them since the beginning, who were making very little money, struggling to just support their families, and this is how they were treated,” Howard said.
CPA says they “remain fully committed to completing a full and fair resolution as soon as possible.”
None of the four partners themselves have responded to any requests for comment. Rourke was asked numerous times to go on camera to address the allegations, to which he replied with written statements instead.
The Department of Labor case is still under review.
These repayments will continue to be monitored.
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