According to a news release from the U.S. Department of Labor, the money was diverted from the plan to pay the trustees’ personal expenses and operating expenses of Farrell Associates.
The ruling by U.S. District Judge Robert N. Chatigny of the U.S. District Court for the District of Connecticut came in a 2008 government suit against James T. Farrell III and his wife, Nancy Farrell. The suit alleged that James Farrell improperly transferred more than $960,000 in plan assets to a bank account in his and Nancy Farrell’s names. Both individuals were trustees of the pension plan and alleged to have violated their fiduciary duties in violation of the Employee Retirement Income Security Act (ERISA)
“The transfer of retirement assets for corporate and personal activities jeopardizes the retirement income of workers and will not be tolerated,” said Phyllis C. Borzi, assistant secretary of the Labor Department’s Employee Benefits Security Administration, in the news release. “We applaud the court’s action to hold these trustees accountable as plan fiduciaries who are obligated by law to safeguard the plan’s assets.”
Farrell Associates is in the business of financial planning and sponsored the plan for four participants.