More 401k Fraud Fallout Amid Vantage Allegations

Second case to arise from events involving an FBI raid in October

401k, theft, retirement, litigation, lawsutiVantage hit with more accusations.

More repercussions from the alleged criminal activity involving Vantage Benefits Administrators, a Dallas-based “TPA, recordkeeper and professional fiduciary.”

Knight’s Companies, a septic tank, trucking and concrete block business in Summerville, South Carolina, accuses Vantage’s Jeff and Wendy Richie “wrongfully transferred approximately $437,744.43 in retirement benefits from the participants of the Plan,” according to a civil complaint filed in early February.

The date for defendants to file the answer to the charges has passed.

“Defendants disguised their prohibited transfers for many months by falsifying Plan participant account statements and participant accessible website information to make it appear that participant account balances were whole and accurate,” the documents note. “All the while, Defendants systematically transferred hundreds of thousands of dollars in retirement benefits from the Plan to their own bank account, and for their own gain.”

Calling the impact to the plan “catastrophic,” Knight claims that in just two months, the Richies siphoned hundreds of thousands of dollars from the plan’s assets.

As of March 15, 2017, just prior to defendants alleged prohibited transactions, the plan’s total value was approximately $504,648. After April of the same year, more than 85 percent of the plan’s assets were missing, or $437,744.

“At all relevant times, Defendants were fiduciaries with respect to the Plan and, therefore, owed the highest duties known in the law to the Plan and its participants,” Knight adds. “But instead of acting in the exclusive interests of the Plan and its participants, Defendants surreptitiously carried out a series of self-dealing, prohibited acts designed to line their own pockets with the hard-earned retirement assets of Knight’s Companies employees.”

In doing so, Defendants breached their fiduciary duties of loyalty and prudence under ERISA, and “engaged in transactions that ERISA strictly prohibits.”

It’s the second case to arise from events involving an FBI raid of Vantage’s offices in October amid fraud and theft allegations.

The “MBA Engineering, Inc. Employees 401(k) Plan” recently named 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.

Ary Rosenbaum is an author and  ERISA/retirement plan attorney for his firm, The Rosenbaum Law Firm P.C. He is also the host of That 401(k) Conference, a fun and informative retirement plan conference at Citi Field, June 7, 2018. Rosenbaum’s latest book, humbly titled “The Greatest 401(k) Book Sequel Ever,” is available in Kindle and paperback at Amazon.com.

 

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