By Paula Aven Gladych
The Securities and Exchange Commission has accused the head of a Detroit-based investment advisor of stealing nearly $3.1 million from the pension fund that the firm manages for the city’s police and firefighters so he could buy two strip malls in California.
Four other top officials at the firm were also charged with helping him to cover up the theft.
The SEC alleges that Chauncey Mayfield, the founder, president and CEO of MayfieldGentry Realty Advisors, took the money from the Police and Fire Retirement System of the City of Detroit without obtaining permission. When other executives at the firm became aware of what he had done, they devised a plan to secretly repay the pension fund by cutting costs at the firm and selling the strip malls.
The plan failed because MayfieldGentry couldn’t raise enough money to put the money back into the pension fund.
Mayfield and his firm have agreed to repay the money.
The theft took place in 2008 but wasn’t discovered until 2011. MayfieldGentry and its executives didn’t tell the pension plan what it had done until the evening before the SEC filed a complaint against them in May 2012 for their participation in a pay-to-play scheme involving the former mayor and treasurer of Detroit. The pension fund terminated its relationship with MayfieldGentry upon learning of the theft.
Originally published on BenefitsPro.com