A federal judge has ordered Timothy Seavey, owner of Seavey’s Furniture & Appliance Inc. in Windham, to pay more than $26,000 into an employee retirement fund after failing to deposit money withdrawn from his workers’ paychecks into the fund.

The ruling stems from a lawsuit filed Dec. 17, 2014, by the U.S. Department of Labor in Portland’s U.S. District Court. The Labor Department said Seavey failed to deposit more than $16,000 of employee contributions into the company’s now-frozen individual retirement account plan from September 2009 to March 2011.

The $26,283 judgment represents the principal plus lost opportunity costs, the Labor Department said Tuesday in a news release. Seavey must reactivate the IRA plan and pay the missing money into it in 48 monthly installments, it said.

“The funds shall be allocated among plan participants whose employee contributions were withheld but never transmitted to the plan and whose employer contributions were not collected to remit to the plan,” the department said. “Defendant Seavey will also submit proof of payments and his actions to the Labor Department. The order also permanently enjoins Seavey from ever again serving as a fiduciary to an ERISA-covered plan and from future ERISA violations.”

ERISA is the Employee Retirement Income Security Act of 1974. It was enacted to protect employee benefit plan participants and their beneficiaries. It sets standards of conduct for the fiduciaries in control of employee contributions.

In January, Seavey told the Press Herald that he did not challenge the basic premise of the lawsuit. However, he said the Labor Department’s complaint did not tell the whole story.

Seavey said the failure to transfer employees’ contributions into the IRA plan was a mix-up caused by another employee who was in charge of making the payments.

Once the error was discovered, the company was too far behind on its fund payments to catch up, and the recession was in full swing, Seavey said. So instead, he canceled the plan and stopped taking employee contributions.

Seavey said his employees were aware of the error, and that he already had promised to make them whole when he was financially able.

However, the Labor Department placed sole blame for the incident on Seavey and characterized the judge’s ruling as a stern reminder to all employers who administer employee retirement plans.

“Once again, we remind plan fiduciaries that they are required to administer the plan solely in the interests of its participants, those individuals who have entrusted employers with their retirement security, and not in the interests of themselves or any other parties,” said Susan Hensley, New England regional director of the Labor Department’s Employee Benefits Security Administration.

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