The US Department of Labor alleged that a Florida manufacturing business in Flagler County is guilty of Profit Sharing Plan embezzlement and filed a complaint against the company and its owner. According to the allegations the owner embezzled $111,624 between January and June 2009 from the company Profit Sharing Plan.
United States Attorney A. Lee Bentley, III has now announced that the 63-year-old owner, from Volusia County, has pleaded guilty to embezzlement from an employee benefit. According to the plea agreement, the owner embezzled all of the funds from the business’ corporate Profit Sharing Plan and unlawfully used the pension funds to pay personal and other unrelated corporate expenses. She used some of the funds to pay personal investment obligations in another company she co-owns. The corporate Profit Sharing Plan was a federally protected plan under the Employee Retirement Income Security Act (ERISA).
In 2009, the manufacturing company was having financial issues. To meet the company’s payroll; pay vendors; fulfil the company’s mortgage payments and pay the financial obligations of her unrelated company, the owner of the manufacturing company made 15 separate and illegal electronic funds transfers from the company’s Profit Sharing Plan’s account. This was carried out by electronically transferring funds from the Plan’s account to the company’s operating account. Checks were then written from the operating account to cover personal and business obligations. As a result, the employees’ Profit Sharing Account was depleted.
The owner and another were held to be jointly liable and, as a result, are permanently banned from acting as a fiduciary, trustee, agent or representative for employee benefit plans (as defined by the Employee Retirement Income Security Act of 1974) in the future. In addition, they have been ordered to pay restitution plus an additional $25,253 in interest on lost earnings.
The U.S. District Court for the Middle District of Florida Jacksonville Division, appointed administrators to terminate the Plan, collect and administer the Plan’s assets and make distributions to the affected participants.