A 65-year-old California man who was the chief executive officer of a Sacramento-based real estate investment firm has admitted to embezzling $1,243,154 from his workers' pension plan. The man entered his guilty plea on Aug. 1. He faces a prison sentence of up to five years and a fine of up to $250,000 when he is sentenced in January. The case was investigated by the U.S. Attorney's Office for the Eastern District of California and the U.S. Department of Labor's Employee Benefits Security Administration.
According to media reports, the man's firm was registered with the Securities and Exchange Commission and handled transactions for institutional investors and public pension funds as well as individuals. The firm sponsored several retirement plans for its employees under the provisions of the Employee Retirement Income Security Act, and one of them was a traditional pension plan over which the man was the only trustee.
According to investigators, the man transferred money from the pension plan between 2011 and 2014. Court documents reveal that the money was placed in the man's personal retirement accounts. He then fabricated paperwork that disguised the transfers by making them appear to be loans. The man also admits to providing false information about the plan's transfers and balance on forms submitted to the Department of Labor.
Cases involving these types of white-collar crimes rarely go to trial because the most important pieces of evidence are generally documents that are difficult to refute. However, these cases are often complex and hard to understand, and prosecutors sometimes make generous plea agreements to avoid arguing before a jury. Attorneys may remind prosecutors of these risks during plea negotiations, and they could also bring up mitigating factors such as a previous good behavior, sincere remorse and the support of family and friends.
Source: U.S. Attorney's Office for the Eastern District of California, "Sacramento CEO Pleads Guilty to Pension Embezzlement", Press release, Aug. 1, 2019