Investment Advisor Gets Prison Time for Fraud

The U.S. Department of Labor Employee Benefits Security Administration (“EBSA”) discovered that William H. Minor, a former board member of Rehabilitation Center for Children & Adults Inc. who also volunteered to manage its pension plan, embezzled approximately $2 million from the pension plan.  Minor operated Multi Financial Insurance Corp. an entity that provided investment advice and administrative services to pension plans. 

EBSA discovered that Minor moved the plan’s assets to a life insurance company with which Minor was a registered agent.  Minor then falsely represented to the plan’s trustees that Multi Financial Insurance Corp. partnered with the life insurance company to provide administrative services to the plan.  Yet, the life insurance company did not have a partnership with Minor to provide any administrative or recordkeeping services for the plan allowing Minor to exercise control over the plan assets.  EBSA determined that Minor used his authority to make 63 fraudulent transfers from the pension plan assets to his own accounts. 

Minor was sentenced to 41 months in prison and ordered to pay $1,636,604 in restitution.

This is an egregious example of a breach of fiduciary duty.  However, it serves as a reminder to plan fiduciaries of their responsibilities, including the employer’s duty to monitor those providing services to the plan.

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