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Compliance December 1, 2009
Administrator Charged with Embezzling Tens of Millions from Benefit Plans
December 1, 2009 (PLANSPONSOR.com) – Melissa G. King, controlling owner of King Care LLC, has been charged with embezzling tens of millions of dollars from a union's benefits plans.
Reported by Rebecca Moore
On behalf of the Compressed Air and Free Air Foundations, Tunnels, Caissons, Subways, Cofferdams, Sewer Construction Workers Local 147 of New York, New Jersey States and Vicinity AFL-CIO, King administered the Local 147 Construction Workers Retirement Fund; the Local 147 Construction Workers Annuity Fund; and the Local 147 Construction Workers Additional Security Benefits Fund.
According to an announcement from the office of the U.S.
Attorney for the Southern District of New York, King Care had written
agreements with Local 147, which provided that it was to be paid up to $15,000
per month for each of the Local 147 Funds, for a total of $45,000 per month for
the three funds, and a total of $540,000 annually.
However, the announcement said, between 2002 and 2008, King caused at least $42.6 million to be transferred, in the form of checks, from the bank accounts of the Local 147 Funds into a bank account controlled by King Care, including the following approximate amounts per year:
- 2002 – $1,040,000
- 2003 – $3,175,000
- 2004 – $4,205,000
- 2005 – $5,426,040
- 2006 – $7,677,192
- 2007 – $11,240,000
- 2008 – $9,845,000
The U.S. Attorney, Department of Labor, and Internal Revenue
Service officials say tens of millions in embezzled funds were transferred out
of the King Care account through check, wire transfers, and other transactions
that appear unrelated to the Local 147 Funds, including at least: $7 million
paid to American Express; $3 million paid to various entities that sell,
maintain, and transport horses; $700,000 paid to a diamond company; $500,000
transferred to E-Trade Securities; $300,000 paid to Neiman Marcus; $150,000
paid to the Ritz Carlton Palm Beach; $10 million transferred to other bank
accounts held by King Care; and $600,000 transferred to the “Trust
Agreement between Jerome and Mabel King.”
King’s contract with the Local 147 Funds was terminated as
of December 31, 2008.
She is charged with
one count of theft and embezzlement in connection with employee benefit plans,
and eight counts of money laundering. If convicted, she faces a maximum sentence
of five years in prison on the embezzlement count, and 10 years in prison on
each of the eight money laundering counts.