Former Fiduciaries Accused of $40 Million Pension Plan Fraud
By Hal M. Bundrick
NEW YORK ( MainStreet)--A pension trustee and investment advisor raided $40 million in pension funds for their personal gain, according to lawsuits filed by the U.S. Department of Labor against George S. Hofmeister and Bernard Tew, former fiduciaries of four Lexington, Kentucky-based pension plans. The U.S. District Court for the Eastern District of Kentucky has granted in part the DOL's motion for a preliminary injunction against the pair.
Hofmeister was the trustee and Tew was managing director of their investment service provider, Bluegrass Investment Management LLC. The court's order removes Hofmeister as a fiduciary of the plans and prohibits him from taking any actions with respect to the pensions plans or their assets. The DOL says Tew resigned as fiduciary of the plans a few days before a hearing regarding the department's motion.
The lawsuits alleged that the defendants engaged in a series of prohibited transactions resulting in the misuse of approximately $40 million from four pension plans all closely affiliated with Lexington-based Revstone Industries LLC and Spara LLC."Those entrusted with managing these pension funds have shown an utter disregard for the workers, who are relying on the money for their retirement," said Phyllis C. Borzi, the assistant secretary of labor who heads the Employee Benefits Security Administration. "Our aim is to make this right for those workers."
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