Vantage Benefits Administrators, a Dallas-based “TPA, recordkeeper and professional fiduciary” and subject of an FBI raid in October amid fraud and theft allegations, has been hit with a civil suit from MBA Engineering, a Blaine, Minnesota-based plan sponsor.
Specifically, the “MBA Engineering, Inc. Employees 401(k) Plan” names Vantage, as well as chief executive Jeff Richie and Wendy Richie, and alleges nefarious intent and actions related to the approximately $2,269,653.43 in retirement benefits missing from the plan.
“Defendants disguised their fraud for nearly a year by falsifying [p]lan participant account statements and participant accessible website information to make it appear that participant account balances were whole and accurate,” according to the filing. “All the while, [d]efendants systematically transferred millions of dollars in retirement benefits from the [p]lans to their own bank account, and for their own gain.”
Claiming Vantage and the Richies were plan fiduciaries, and therefore “owed the highest duties known in the law to the [p]lans and the [p]lans’ participants,” they instead carried out “a series of self-dealing, fraudulent acts designed to line their own pockets with the hard-earned retirement assets of MBA Engineering employees.”
The suit sheds light on the FBI’s actions, who at the time would not say what it was looking for. The Dallas Morning News reported that search warrants were executed at the offices “amid concerns that money may be missing from retirement accounts the company manages.”
According to the paper, “Richie was sanctioned in 2008 by the Securities and Exchange Commission and barred from the investment business for three years ‘for conducting an unregistered and fraudulent offering’ of securities in the retirement-services company he was running at the time.”
Richie neither admitted nor denied the allegations in that case, the paper adds, and the agency waived a $4.3 million judgment based on his financial condition.
“Defendants must repay the assets they stole from the Plans, with lost earnings or interest,” the latest complaint states. “And in light of the depravity of Defendants’ fraudulent scheme, Plaintiff seeks exemplary damages based on Defendants’ outright fraud. Plaintiff also seeks an injunction to stop Defendants from further illegally transferring the Plans’ assets, and barring Defendants from performing services to any employee benefit plans in the future.”
Ary Rosenbaum is an ERISA/retirement plan attorney for his firm, The Rosenbaum Law Firm P.C. At a flat fee, Ary helps plan sponsors reduce their plan cost, facilitate administration, and limit their fiduciary liability.