Pension Fund "Pillager" Draws Nine-Year Sentence

February 7, 2005 ( - Daniel S. Geiger, 53, was sentenced to a nine-year sentence last week for taking $6.7 million from the pension funds of now-defunct Standard-Coosa-Thatcher Yarns Inc.

>Federal Judge Curtis Collier on Friday afternoon said he was giving a sentence higher than the normal range “to deter other people who would abuse trust like this.”

>The jury also ordered Geiger to forfeit his personal residence, which prosecutors said was bought with $590,000 in pension funds. He also was ordered to forfeit equipment, several vehicles, and a monetary judgment of $781,000.  

>The company’s former owner and president, Kenneth H. Combs Jr., pleaded guilty in the case to 31 counts of mail fraud, embezzlement, graft, conspiracy to launder money, and money laundering before his suicide just prior to his April 2004 sentencing.   A third man in the indictment, British investor Roderick B. Askew, remains a fugitive, according to the AP.  

>Combs had been indicted in November 2002 on criminal counts involving multiple schemes to recklessly invest the assets of the pension plan. Combs received more than $155,400 in kickbacks from the reckless investments, and also converted pension assets for his personal use.   The two pension plans, which covered 771 participants, lost $11,670,491 as a result of the improper investments.

>Prosecutors have said Geiger bribed Combs, who also was fiduciary of the employee retirement plan, with kickbacks of pension money loaned to or invested in Geiger’s company, USA Mining in California.  

>Prosecutor Gary Humble said Geiger and Kenneth S. Combs had “pillaged” the trust fund, and that there had been testimony in Geiger’s lengthy trial about his getting $669,000 in cash, $71,000 for limousines, $275,000 for chartered planes, and $51,000 for hotels from the pension fund proceeds, according to the Chattanoogan.

>Geiger was convicted after a trial that lasted over two weeks and included some 40 witnesses – mainly defense – of three counts of wire fraud, three counts of kickbacks from an employee pension fund, one count of conspiracy to commit money laundering, and six counts of money laundering.   The prosecutor said the federal Pension Benefit Guaranty Corporation had stepped in to help the SCT pensioners, but he said not all were made whole, including one who lost $100,000.  

>Geiger must begin making restitution at 10% of his earnings when he gets out of prison.   He asked that he be allowed out for 60 days to gather up money to begin the restitution, but the judge rejected that idea.