Arrest Made in Retirement Plan Fraud Case

Arrest Made in Retirement Plan Fraud Case

Fulcrum Partners. Deferred Compensation News

Earlier this month, a federal grand jury indicted an Orange County, California man on charges related to retirement plan fraud. The U.S. Attorney’s Office for the Central District of California reported that the plaintiff has been charged with three counts of bank fraud and one count of aggravated identity theft after allegedly obtaining the personal information of an unspecified number of Boeing employees.

The accused is said to have operated between January and June 2019, during which time he acquired individual information and retirement account data from the individual’s Voluntary Investment Plan accounts, known as a VIP account.

After allegedly placing holds on the Boeing employee’s mail through the U.S. Postal Service, the accused then made fraudulent withdrawal requests of electronic money transfers or the disbursement of checks. In total, he allegedly attempted to obtain approximately $783,328 from the Boeing employee accounts and succeeded in obtaining at least $360,847.

Retirement Plan Fraud Can be a Cybersecurity Risk or a Human Risk

The National Association of Plan Advisors (NAPA) described the accused’s activities as “a fairly elaborate process” and pointed out that,  “As has been the case in other recent instances, the theft was apparently enabled by access to personal information regarding the individuals in question, which led to access to their account (or the process that did so). Most recently it has resulted in litigation against both the plan sponsor and recordkeeper (see Plan Sponsor, RK Sued for Fiduciary Breach in 401(k) Account Hack and Recordkeeper, Plan Sponsor Charged in 401(k) Account Theft).

“While there certainly have been growing concerns about cybersecurity risks, there also have been recent cases where individuals within the sponsoring employer and others in which TPA or recordkeeping staff have taken advantage of their access to misappropriate funds.”

#retirement #retirementplan #planfraud #bankfraud

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

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