Firm Pursued in Hawaii Public Plan Diversion Files for Bankruptcy
The move by Plan Compliance Group (PCG) of Walnut Creek, California to go into US Bankruptcy Court effectively blocks a civil suit against the company and its president, Francis Reimers, filed last month by state Attorney General Mark Bennett, according to the Honolulu Star Bulletin. The suit was filed on behalf of the Hawaii Department of Education, which saw $2.28 million in funds disappear (See CA Education Officials Sue TPA Over Diverted Retirement Plan Contributions ).
The University of Hawaii, which lost $421,000 to the same company, had been poised to join the lawsuit. “In that respect, (the bankruptcy filing) has a negative impact on our ability to get our money back,” UH General Counsel Walter Kirimitsu told the newspaper.
PCG, which handled the transfer of DOE and UH employee contributions into tax-sheltered annuity funds, did not make the necessary deposits into the funds in September after deducting the money from employee paychecks, according to the allegations.
A Chapter 7 filing is essentially a liquidation of company assets to pay off debts. In its filing, PCG estimated its assets at less than $500,000.
Both the DOE and UH have reimbursed their affected employees, estimated at more than 10,000.
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