Professional Athlete Sports Agency Is Accused of Retirement Asset Theft

The co-owner of Professional Sports Planning, Inc. and trustee for the Professional Sports Planning, Inc. defined contribution profit sharing plan, Carl Poston, is alleged to have committed theft of workers’ retirement plan assets.

U.S. Secretary of Labor Marty Walsh brought a civil lawsuit before the United States District Court for the Southern District of Texas, under the Employee Retirement Income Security Act, that alleges five counts of fiduciary breach, according to the complaint, Walsh v. Poston et al.

The Houston-based business providing representation and negotiation services for professional athletes, Professional Sports Planning, did not respond to a request for comment.

“During the period from on or about October 17, 2014, through on or about May 21, 2018, defendants Carl Cardwell Poston III and Professional Sports Planning, Inc., obtained, retained, and used plan assets for non-plan uses, including funding the operation of Professional Sports Planning, Inc,” the complaint stated. “Specifically, defendant Carl Cardwell Poston, III directed the withdrawal of plan assets to be used for operating the company.”

The five ERISA violations are:

• failing to operate the retirement plan solely in the best interests of participants;
• Failing to operate the plan with necessary care, skill, prudence and diligence;
• Engaging in transactions plan fiduciaries knew or should have known were violations of ERISA;
• Dealing with assets of the plan in their own interests or for their own accounts; and
• Engaging in transactions involving the plan on behalf of a party whose interests were adverse to the interests of the trust and the interests of its participants and beneficiaries.

“The fiduciaries’ violations resulted in the following plan losses: (1) $111,414.10 in plan assets that were withdrawn between October 17, 2014, and May 21, 2018, for non-plan purposes,” the complaint stated. “The fiduciaries have restored a portion of these withdrawn assets, and the remaining amount owed to the plan is $76,768.45, and (2) [l]ost opportunity costs that cannot be calculated until the plan assets are restored and distributed to the participants.”

The Department of Labor website includes a description for the types of retirement plans, under which it defines a profit-sharing plan as a defined contribution plan wherein the plan “may provide, or the employer may determine, annually, how much will be contributed to the plan (out of profits or otherwise).”

Named defendants to the lawsuit are Poston, a longtime agent representing professional football and basketball players, and his company, Professional Sports Planning, Inc., as well as the Professional Sports Planning, Inc. profit sharing plan.

“As the functional plan administrator and a trustee, Carl Cardwell Poston III had and exercised discretionary authority control and responsibility over plan management and administration and had actual control over plan assets, including, but not limited to, determining the disposition of plan assets,” the complaint stated.

The complaint argued that the fiduciary violations comprise legal exposure for both direct liability and co-fiduciary liability.

The plaintiff is represented by Amy Hairston, trial attorney-in-charge and the Department of Labor Office of the Solicitor. It is unclear at this time who is representing Poston.