Compliance April 9, 2008

Employer Fined for Lying on Form 5500

April 9, 2008 (PLANSPONSOR.com) - A Charlotte construction contractor has been hit with $153,000 in penalties and fines and sentenced to one year of federal probation after pleading guilty to filing a false Form 5500.
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A news release said Jeffrey R. Thomas, 56, President of Thomas Construction Services, Inc., received the fine and the term of probation during a hearing before by U.S. District Judge Martin Reidinger of the U.S. District Court for the Western District of North Carolina.

Thomas entered a guilty plea to the charge in December 2007, the announcement said.

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According to a court documents, Thomas admitted to preparing and submitting the falsified Form 5500 for the fiscal year ending June 30, 2002, for the Thomas Construction Services, Inc., Profit Sharing Plan, for which Thomas served as Trustee.

The court documents said Thomas also admitted that, on or about March 11, 2002, he instructed custodian New England Life Insurance Company to remove funds from the plan and to issue a check for $200,000 to the trustees.

About a week later, Thomas opened an RBC Centura Bank account in the name of the plan and, on various occasions, though he was a “party-in-interest,” he withdrew funds from the plan assets and used them to invest in other business interests. The announcement said the plan did not lose money.  

The false statement on the Form 5500 concerned the answer to Part II, question 4, part d, which read, “Did the plan engage in any nonexempt transaction with any party-in-interest?”

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