Executives Jailed for Fleecing Company Benefit Plans

January 3, 2006 (PLANSPONSOR.com) - The US District Court in Lynchburg, Virginia, has handed prison sentences to two executives of a closed wood manufacturing plant for swindling employee benefit plans out of more than $800,000.

John Jackson, former president and CEO of Burruss Company,was sentenced to nine years in prison and Larry Carey, a former vice president of finance at the company, was sentenced to seven years and three months.The two executives were convicted of fraud and embezzlement in US District Court in Lynchburg on March 9, 2006.

Among other allegations of fraud, both Jackson and Carey were convicted of falsely reporting in October 1999 that the company had paid the $322,169 it owed to The Burruss Company Pension Plan. The payment was finally made in April 2000, but deprived employees of six months of interest earnings, according to a news release from the US Attorney’s Office for the Western District of Virginia.

The Burruss Company owned the plan $318,246.27 for the calendar year 1999 pension contribution, which was never paid, and then from August 2000 through October 2000, Jackson and Carey deducted money for health care contributions from employee wages and failed to pay those funds to the third-party heath care plan administrator, which later stopped paying the medical claims of Burruss employees.

“The criminal actions of these two defendants affected the lives of hundreds of others. Mr. Jackson and Mr. Carey paid themselves large bonuses with money that was meant for the medical insurance costs for their employees,” said United States Attorney John Brownlee, in the news release. “We hope that this case sends the message that anyone who commits fraud or embezzlement will be prosecuted and punished.”