Alleged pension scammers face court actions
By Dan Berman
The federal government took action against executives in Ohio and California accused of stealing money from employee retirement plans.
In the California case, the owners of a Glendale post-production company that provided services to film studios and kept changing its name, pleaded guilty in U.S. District Court in Los Angeles to one count of embezzlement from an employee benefit plan and one count of failure to collect or pay taxes.
Ronald Burdett, 75, and Karen Burdett, 70, of Shadow Hills, owned the companies, which went under the names Sunset Post Inc., Sunset Digital Studies Inc. and Sunset Teleproduction.
According to the plea agreements, the Burdetts, from 2004 to 2006, embezzled $102,327 that was intended for employee retirement accounts. In addition, the IRS alleged, they failed to pay $971,896 in employee federal income tax withholdings and taxes owed und the Federal Insurance Contributions Act.
Sentencing is scheduled for March 17. The Burdetts face up to 10 years in prison and a fine of at least $500,000. They also could be ordered to make full restitution to employees and the government.
In the Ohio case, the Department of Labor filed a lawsuit in U.S. District Court in Cleveland on behalf of the Attevo 401(k) retirement plan alleging the improper use of $123,338.85 in pension funds.
The complaint said an investigation by the Employee Benefits Security Administration found the plan’s fiduciaries failed to remit participant contributions and loan repayments withheld from paychecks to the retirement plan.
The defendants in the suit – Cirric Inc., as the successor to Averrock Inc. and Attevo Inc., and its sister company, Ruralogic Inc., and C. David Snyder and Joseph Burmester all of Cleveland – are fiduciaries to the 401(k) plan, the complaint alleges, and broke their responsibilities.
From January 2009 to July 2012, the suit alleges that the defendants failed to transfer employee contributions to the 401(k) plan, which has 24 participants and $379,424 in assets.
The suit seeks the repayment of the funds stolen plus lost opportunity costs and asks that the Snyder and Burmester be barred from serving as fiduciaries or service providers to an employee benefits plan covered by ERISA.
Originally published on BenefitsPro.com