The ongoing saga involving alleged husband and wife grifters Jeff and Wendy Richie, proprietors of Vantage Benefits Administrators, the Dallas-based TPA subject of an FBI raid last year, took a surprising turn last week.
Two retirees from Texas A&M had sued Matrix Trust Company, claiming the company provided custodial and trust services for their 403(b) retirement plans, for which Vantage was the recordkeeper.
The retirees were seeking compensation from Matrix for failing to meet its obligations to protect their savings.
However, on Nov. 16, the suit against Matrix was voluntarily dropped in a Colorado court “without prejudice, with each party to bear its own costs, attorneys’ fees, and expenses.”
“This lawsuit is completely without merit,” a representative from Matrix stated at the time of the initial filing. “Matrix Trust Company did not manage these investment accounts or serve as a trustee or fiduciary for them. This lawsuit involves accounts that were opened and managed by Vantage Benefits Administrators. Matrix’s actions were consistent with its custodial agreements and intends to vigorously defend itself against these baseless claims.”
Matrix said they provided custodial services only for the plan, and “acting as a custodian doesn’t meet the level and duty of a plan fiduciary,” according to Ary Rosenbaum, an author and ERISA/retirement plan attorney for his firm, The Rosenbaum Law Firm P.C. “It seems that the plaintiffs’ attorney doesn’t really understand how 403b plans work. It wouldn’t be the first time—and almost certainly won’t be the last.”
The Richies were indicted in late October for fraud and embezzlement related to acts involving Vantage.
They allegedly included distribution requests prepared by Wendy Richie, who used the name and identity of an employee, or purported employee, of the plan sponsor.
The request would direct the distribution to be made by ACH transfer to a financial account that the employee supposedly designated.
In fact, the designated account was one controlled by Vantage. The funds were then used for company expenses, including payroll.
Funds were also transferred to the Richies’ personal bank account and used to acquire assets and pay for expenses including remodeling work at their residence and a four-wheel drive tractor.
According to The Dallas Morning News, “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.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
