by Brian Mahany
Tens of millions of Americans invest for the future through employer sponsored 401(k) and other employee benefit plans. These plans allow workers to lower their taxes and provide retirement income. Depending on how the money is invested, there is always a risk of loss. In the case of Matthew Hutcheson, an Idaho jury convicted him yesterday of stealing money from plans he administered.
Hutcheson served as trustee of the G Fiduciary Retirement Income Security Plan and several other employee benefit plans. All contributions to the plans were for the exclusive benefit of the plan’s participants and their beneficiaries. Between January and December 2010, Hutcheson directed the plan’s custodian to wire $2,031,688 to an account controlled by him. He told record keepers to reflect the monies were being invested. They were not.
The feds say Hutcheson used the money to renovate his home, build a pool and hot tub, pay off personal loans, and purchase 3 cars, 2 motorcycles, 2 ATV’s and a John Deere tractor. Prosecutors also say he took approximately $500,000 for personal expenses. If that isn’t enough, he was also accused of taking an additional $3 million of investor monies to invest in a golf course.
According to the indictment, even after being caught red handed by an auditor, Hutcheson continued to lie. They say he falsified documents showing assets that he didn’t own. Ultimately, he was indicted in April of last year and convicted yesterday of 17 counts of felony wire fraud.
Hutcheson faces 340 years in prison when sentenced later this year. Surprisingly, he was released on bail after his conviction.
What makes this case so interesting is that Hutcheson previously appeared before Congress in 2010 to support strengthening standards for advisers such as himself. He testified while at the same time he was himself stealing millions from his client. His Congressional testimony will certainly come back to haunt him.
If there is any lesson here, it is that things are not always what they appear.
Our concern is always the victims, in this case the workers who invested in these plans and hoped for a comfortable retirement. Whether the fund custodian and asset manager have any liability remains to be seen. You can bet, however, that everyone is being a bit more vigilant after yesterday’s conviction.
If you lost your money in a 401(k) scam or bogus employee benefit plan (sometimes called 419, 412 or welfare benefit plans) or through any other type of stockbroker or investment adviser fraud, give us a call. We are currently handling cases involving Tracy Sunderlage, BC Capital, Nicholas Battoo and Maven. Often we can collect from third parties who facilitated the sale of these investment scams or the accountants who blessed them.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Minneapolis, Minnesota; Portland, Maine and San Francisco, California. Services available in many jurisdictions.
Want more information? Our Due Diligence blog has a search engine located in the upper right hand corner. For more information on specific topics, just click the fraud recovery tab or type in the name of a particular topic such as “employee benefit plan” or “419 plan” in the search bar. We have posted hundreds of informative articles on our site.