Search Firm Exec Jailed for Siphoning Off Pension Assets

A news release from United States Attorney Kenneth Wainstein of the District of Columbia and Ann Combs, assistant secretary of Labor for theEmployee Benefits Security Administration (EBSA) said US District Judge Emmet Sullivan also sentenced Stanley Krejci, 63, to a year of supervised release after his imprisonment. Sullivan also ordered that the defendant pay for the costs of his incarceration, his supervised release, and attorney’s fees for his two victims.

According to the announcement, Krejci, who pleaded guilty in September 2005, unlawfully used the money to meet operating expenses of the company between January 1996 through May 2000 when he was President and Chief Operating Officer of The Interface Group. As part of his responsibilities, he was the sole administrator, trustee, and fiduciary for Interface’s pension plan, comprised of a Profit Sharing Plan (“PSP”) and a Money Purchase Plan (“MPP”). The plan had several participants.

The firm’s financial instability prompted Krejci to begin using more than $700,000 of the company founder’s pension funds to maintain Interface – with the founder’s knowledge, according to the government. However, starting in the fall of 1999, the executive search consultant and the office administrator’s pension monies also were drawn upon to maintain the company’s operations. Their combined plan holdings totaled more than $100,000, according to the charges.