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Compliance March 7, 2019
Investment Adviser Sentenced for Defrauding Pension Plan
The Department of Labor found the investment adviser made 63 fraudulent requests to Transamerica for lump sum benefit checks for participants not entitled to plan benefits, in total transferring $2 million from the pension plan to his own accounts.
Reported by Lee Barney
After a U.S. Department of Labor Employee Benefits Security Administration (EBSA) investigation of a multi-million dollar pension risk fraud, the U.S. District Court for the Southern District of Florida has sentenced William H. Minor to 42 months in prison, three years of supervised release and a special assessment of $100, as well as to repay $1,636,604 restitution.
Minor, operator of Multi Financial Insurance Corp., a West Palm Beach, Florida, provider of investment advice and administrative services for pension plans, pled guilty in September 2018 to one count of mail fraud. EBSA investigators found that starting in 1991 until June 2016, Minor transferred approximately $2 million from the Rehabilitation Center for Children & Adults Inc. Pension Trust to accounts he controlled.
In October 1991, Minor moved plan assets to Transamerica Life Insurance and Annuity Co., with which he was registered as an insurance agent. Minor falsely told the center and plan trustees his company would work with Transamerica to administer the plan, even though Transamerica had no partnership with Minor and did not conduct any administrative or recordkeeping services for the plan.
Having achieved control of the plan through his deception, he directed one plan trustee to endorse benefit checks from Transamerica to his company, with the understanding that he would them redirect those funds to certain plan participants. Minor then forged the trustee’s name on additional checks.
EBSA determined that Minor made 63 fraudulent requests to Transamerica for lump sum benefit checks for participants not entitled to plan benefits, in total transferring $2 million from the pension plan to his own accounts.
“Theft of pension plan assets jeopardize the benefits of workers,” says Employee Benefits Security Administration Regional Isabel Colon, in Atlanta. “This case reaffirms the U.S. Department of Labor’s commitment to protect workers’ benefits by identifying criminal activity wherever and whenever it occurs.”