Company President Heads to the Slammer for Stealing K Plan Assets

September 15, 2003 ( - A federal judge has sentenced to prison the former president of a Fort Worth aviation services company for stealing $107,122 from the firm's 401(k) plan by diverting employees' payroll deductions for his personal and business expenses.

>US District Judge John McBryde of the US District Court for the Northern District of Texas sentenced defendant Walter Nubel to 21 months in a prison for theft and embezzlement. McBryde also ordered Nubel to pay $52,469 in restitution. During the bankruptcy proceedings of International Aviation Services, the trustee paid about one-half of the amount owed to the 401(k) plan while Nubel is personally responsible for the remainder after his conviction and sentence, prosecutors said.

>Some 82 employees authorized International Aviation Services to withhold contributions for the 401(k)/profit-sharing plan from their paychecks, according to prosecutors.

>Nubel admitted he instructed his company’s comptroller to stop remitting the withheld employee funds to the 401(k) plan in June 1997. Instead, Nubel said he “intentionally and willfully” directed the funds to pay for his personal and business expenses from at least July 15, 1997 through October 3, 1997, according to court documents. The company declared bankruptcy on October 3, 1997.

The case is United States v. Nubel, N.D. Tex., No. 4:02CR180-A,8/29/03.