Execs hit with criminal convictions in 401(k) suit
The courts sent a clear message in this case: Fiduciaries that fail to forward workers’ 401(k) contributions to the plan in a timely manner can face more than just fines.
Here’s the background on two execs who found out the hard way.
While serving as trustees of the now defunct Lunde Electric Company 401(k) plan, Company Chairman Sigmund Eriksen and CEO and President Raymond Eriksen used employees’ contributions to pay for the company’s operating expenses for more than two years.
A jury convicted the Eriksens of violating federal criminal law for embezzling or converting Employee Retirement Income Security Act (ERISA) plan funds – and making false or misleading statements in an ERISA document.
Result: The former Lunde execs were sentenced to two years of probation, a $20,000 fine and 240 hours of community service.
Fiduciaries that fail to forward employees’ 401(k) contributions to the plan in a timely manner can
find themselves facing criminal convictions – on top of costly fines.
Here are two execs who found out the hard way.
What happened: While serving as trustees of the now defunct Lunde Electric Company 401(k) plan, the company’s chairman and CEO used employees’ contributions to pay for the company’s operating expenses for more than two years.
Result: A jury convicted the two execs of violating federal criminal law for embezzling or converting ERISA plan funds – and making false or misleading statements in an ERISA document.
The Lunde chairman and CEO were sentenced to two years of probation, a $20,000 fine and 240 hours of community service.n Misuse of 401(k) funds results in criminal convictions
Fiduciaries that fail to forward employees’ 401(k) contributions to the plan in a timely manner can
find themselves facing criminal convictions – on top of costly fines.
Here are two execs who found out the hard way.
What happened: While serving as trustees of the now defunct Lunde Electric Company 401(k) plan, the company’s chairman and CEO used employees’ contributions to pay for the company’s operating expenses for more than two years.
Result: A jury convicted the two execs of violating federal criminal law for embezzling or converting ERISA plan funds – and making false or misleading statements in an ERISA document.
The Lunde chairman and CEO were sentenced to two years of probation, a $20,000 fine and 240 hours of community service.
- Share on
Free Training & Resources
Further Reading
Heads up: Accountants will no longer enjoy a 45-day grace period to file financial reports after completing an audit. The Public Company...
For finance leaders, not many responsibilities are as stressful (or as important) as closing the books. The financial close aims to make su...
Some of your year-end health plan responsibilities have lifted, thanks to eleventh-hour legislation from Congress. Plan sponsors that me...
Full disclosure: We never know for certain which topics will grab the attention of CFOs, controllers and other finance professionals. O...
Fewer college students are willing to put in the time and money to become accountants. Finance professionals are concerned about the dwindl...
The Department of Labor (DOL) is once again taking a neutral stance on offering a certain investment option to retirement plan participants...
