Fraudulent retirement plan disbursements were made from Great-West Financial accounts on which the firm was acting as recordkeeper.
According to a complaint filed on Dec 4, 2017 in U.S. District Court in Colorado, the FBI office in Denver was contacted by Great-West’s vice president of internal audit “on or about November 2016.”
At the time of the report, Great-West Financial had 20 participants affected and a loss of at least $1 million dollars with a potential loss in excess of $2 million.
“Although it has yet to be determined why specific accounts were targeted, requests for withdrawals were received and the requestor was able to provide the plan participants’ biographical data, i.e. name, social security numbers, date of birth, and employment data,” the complaint states. “Because the requests were authenticated with the plan participants’ identifiers, the perpetrator was able to make changes to the accounts and facilitate the withdrawals.”
Since Great-West’s initial referral, it advised that the firm continues to identify fraudulent disbursements from participants’ accounts.
Great-West provided a general explanation of how the unauthorized transfers were accomplished.
An individual plan participant establishes an account online. The Great-West call center assists as needed when contacted by a plan participant. The call center uses a four-part authentication process using biographical identifiers for the plan participant. The plan participant is provided a distribution form via either email or mail. Once a plan participant has access to an account, information can be changed or updated, and disbursements can be requested.
“Based on Great-West’s investigation, it appears that unauthorized individuals have been fraudulently using this process to obtain access to funds held in retirement accounts for which Great-West was the plan sponsor,” the complaint added. “These unauthorized individuals have caused funds to be transferred from those retirement accounts to other bank accounts without the consent or knowledge of the plan participant.”
One of the bank accounts identified by Great-West as a recipient of an unauthorized disbursement was JP Morgan Chase account 789061137 in the name of Jeanette Delong.
JP Morgan Chase provided additional details regarding the funds received by the Delong JP Morgan Account from Great-West:
- The Delong JP Morgan Account was opened on December 15, 2015 by Jeanette Ann Delong using a California driver’s license;
- The funds received by Delong JP Morgan Account were disbursed from a retirement account in the name of “C.G.”, a CSX employee.
- According to Supervisory Special Agent Robert Roisson with the CSX Railroad Police, C.G. did not request a withdrawal from his account nor did he authorize Delong to act as a recipient of funds from his account.