The Employee Retirement Income Security Act of 1974 (ERISA) is a commonly known employee benefit plan. Companies are expected to administer these plans with their employees’ interests at heart, diligently allocating funds or assets for their benefit.
Under federal law, anyone who misuses the plan’s assets or funds can face embezzlement charges. If it’s for personal gain rather than their intended purpose, they can face serious consequences. This includes significant fines and imprisonment.
A form of embezzlement
Embezzlement is often associated with the unlawful use of another’s property. In the context of employee benefit plans, such as ERISA, it refers to the unauthorized use of plan assets. This can include:
- Unlawful conversion of assets: This involves the unauthorized use of the plan’s assets for personal use or the benefit of another. For example, if someone in control of the plan’s assets uses those assets to invest in a personal business venture, that would be considered unlawful conversion.
- Stealing from the plan: This is a straightforward theft of money or other assets from the plan. This could be as simple as taking cash from the plan’s account or as complex as selling off the plan’s investments and pocketing the proceeds.
- Willful abstraction: This refers to the intentional removal of assets from the plan. An example could be transferring assets from the plan to another account without authorization or for no legitimate purpose.
Each of these actions is a federal crime with potentially severe consequences, including fines and imprisonment. They all involve a breach of the trust placed in those who manage employee benefit plans. The law takes such breaches very seriously.
Consequences of this federal offense
The potential consequences for embezzling assets from an employee benefit plan are severe. For instance, guilty individuals may have to pay a fine and face imprisonment for up to five years.
In addition, a conviction can lead to the loss of professional licenses and severe reputation damage. Unfortunately, this can impact future employment opportunities. Those facing embezzlement charges should consider seeking a legal professional. They can provide assistance to individuals dealing with such charges.