Plan Fiduciary Ordered to Pay Restitution for Stealing From 401(k)

According to the DOL, the fiduciary failed to remit employee contributions to the plan and used the funds instead for business and personal purposes.

The U.S. District Court for the Western District of Virginia has sentenced Felix Rafael Ginorio to time served plus two years supervised release, and has ordered him to pay restitution of $87,276 for stealing from an employee benefit plan, and failing to pay federal taxes.

An investigation by the U.S. Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) found that from April 2013 to January 2014, Ginorio failed to remit $5,317 in employee contributions to the Southside Manufacturing Corp. Retirement 401(k) Savings Plan. He served as vice president of the Loyola Fund Inc. in Palm Beach, Florida. The Loyola Fund owned Southside Manufacturing, at which Ginorio was an onsite manager. Employees of Southside Manufacturing Inc. contributed to the plan via weekly payroll deduction.

Ginorio used the funds for business and personal purposes. He also failed to account for, and pay approximately $81,959 in payroll taxes to the Internal Revenue Service (IRS) that were withheld by the company in the third and fourth quarters of 2013.

As a result of his conviction, Ginorio is barred from serving as a fiduciary or service provider to an employee benefit plan covered by the Employee Retirement Income Security Act (ERISA).