Perhaps it is a result of the terrible economy for the last few years or perhaps more supervision by the Department of Labor, but I have seen a large uptick in owners of businesses stealing plan assets from retirement plans. I will never understand why people think they can get away with such a crime. With plan participants, third-party recordkeeping firms, 5500 filings, and plan custodians watching, eventually the culprits get caught.
Stealing plan assets leaves a trail and trust account statements don’t lie.
A few years back, I met with a potential client who claimed he had some defined benefit plan issues. He claimed he was being contacted by the Department of Labor (DOL) about the defined benefit plan that he sponsored. Apparently, there was no money left because he used the money for his own personal use. The DOL was contacting him because, for the last few years, there were no 5500 filings, Schedule Bs, and PBGC premiums to be paid. I had him consult with our criminal attorney and our viewpoint that since the DOL was on to him, the jig was up and he should just come clean. It was our opinion that they would eventually get to him.
He took our free advice and decided not to retain us. A few years later I read the newspaper and saw that he was arrested and indicted for crimes resulting from embezzling his defined benefit plan, Just a dumb crime if you ask me.